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Irregularities in PM’s Crop Insurance Scheme prevent benefits to Farmers

Agri Nation Network

New Delhi | 21 July 2017

Comptroller and Auditor General of India (CAG) has pulled up Union Government over the gaps and irregularities in Narendra Modi’s flagship Pradhan Mantri Fasal Bima Yojana (PMFBY).

In its report that was tabled in parliament, Comptroller and Auditor General of India (CAG) underlined that government did not know whether the money Rs 32,606 crore spent on crop insurance schemes reached the intended beneficiaries or not as it did not maintain any record of beneficiary farmers. This amount was channelized via state-owned Agriculture Insurance Company (AIC) to private companies. The report also highlighted gross irregularities in disbursing claims by banks and financial institutions to farmers’ accounts.

The Comptroller and Auditor General of India (CAG) looked into the working of various crop insurance schemes between Kharif season of 2011 to Rabi season of 2015-16. These schemes have been replaced with new Pradhan Mantri Fasal Bima Yojan (PMFBY) from 2016 kharif season.

Pointing to the delays in release of compensation by states to affected farmers, it recommended introduction of a mechanism to ensure that state governments’ get timely financial assistance and a technology for more accurate assessment of crop yields.

According to an independent audit report by Centre for Science and Environment (CSE), the ministry of agriculture and farmers welfare data also showed that the insurance companies had only settled 32.45% of the claims made till April 2017.

It also cited the data from the Insurance Regulatory and Development Authority of India that insurance companies collected more than Rs 15,891 crore in premiums but settled claims of around Rs 5,962 crore.

The CAG in its report also said that the two-thirds of farmers it surveyed were not aware of the schemes.