Firms earned Rs 15,795 crore in 2 years of Fasal Bima Yojana

HISAR:Insurance companies across the country earned a whopping Rs 15,795 crore as profit in two years from the Pradhan Mantri Fasal Bima Yojana (PMFBY), according to a reply received under the Right to Information Act.

Firms earned Rs 15,795 crore in  2 years of Fasal Bima Yojana

Deepender Deswal

Tribune News Service

Hisar, November 13

Insurance companies across the country earned a whopping Rs 15,795 crore as profit in two years from the Pradhan Mantri Fasal Bima Yojana (PMFBY), according to a reply received under the Right to Information Act.

While the farmers’ wait for increase in income continues, the profit of insurance firms increased by one-and-a-half times in just one year of the introduction of the PMFBY.

The insurance firms posted a profit of Rs 9,335.62 crore in 2017-18 — a robust growth of 44.52% compared to the previous year’s (2016-17) profit of Rs 6,459.64 crore in the country.

Information received from the Union agriculture ministry by RTI activist PP Kapoor revealed that 11 insurance firms, including government-owned Agriculture Insurance Company of India (AIC), earned a total of Rs 15,795.26 crore in the first two years of PMFBY. The RTI reply disclosed that the insurance firms got a gross premium of Rs 22,362.11 crore and paid an insurance claim of Rs 15,902.47 crore to 3,01,26,403 farmers in 2016-17.

Similarly, these firms disbursed claims of Rs 15,710.25 crore against a premium of Rs 25,045.87 crore to 1,26,01,048 farmers. The RTI reply, however, added that about Rs 512 crore approved insurance claims are yet to be paid, while majority of Rabi crop claims are yet to be estimated/approved.

Kapoor, who analysed the data, said the insurance firms earned to the tune of Rs 530.30 crore per month in 2016-17, which rose to approximately Rs 778 crore per month the following year. Kapoor expressed surprise that while the number of insured farmers has gone down, the profits of the insurance firms have increased significantly. Public sector firm AIC earned Rs 2,610.60 crore in 2016-17, which was down to Rs 528 crore the following year. Curiously, the AIC, which insured 2,46,83,612 farmers in 21 states in 2016-17, lost about one crore farmers as it insured only about 1.5 crore the following year. Kapoor alleged that the public sector’s declining number indicated the growing clout of private insurance firms.

The data indicated that the number of insured farmers too dropped in the second year as 5,72,17,159 farmers were insured in 2016-17 against  4,87,70,515 farmers in 2017-18 — a decline of 84,46,644 farmers. Devender Sharma, an agriculture expert, said this is an excellent scheme to earn profit for the insurance firms. “These are the new arhtiyas who need not to make any financial investment and earn massive profits.”

BKU leader Gurnam Charuni alleged that this “flawed policy” has been framed intentionally to let insurance firms earn profit at the cost of farmers. “The farmers being caled beneficiaries have not got the insurance amount at all. Because most of them are loanee farmers, banks deduct the money a farmer gets for insurance cover against the loan as soon as it arrives.”

About crop insurance scheme

Pradhan Mantri Fasal Bima Yojana is a government-sponsored crop insurance scheme that primarily aims to provide insurance coverage and financial support to farmers in the event of failure of any of the notified crop as a result of natural calamities, pests and diseases

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