Gujarat exits PM crop insurance scheme

Gujarat has exited the PM Crop Scheme due to heavy premiums charged by companies for the crop insurance plan.
Announcing the exit, Gujarat Chief Minister Vijay Rupani said the State government was forced to scrap the tenders after insurance companies asked for exorbitantly high premiums.
“The cost of premium worked out to about Rs. 4,500 crore, which is exorbitant. Though PMFBY is a good scheme for farmers and Gujarat had been part of it, and would want to be so in future too, for the current year at least, we are not going with PMFBY, considering the excess burden on the State exchequer,” Rupani said.
Last year, Reliance General Insurance Company, Universal Sompo, Bharti Axa and Agriculture Insurance Company of India ran the scheme in the State.
With one State after another quitting the PMFBY, questions are being raised about the effectiveness and the success of the scheme. Besides Gujarat and Bihar, West Bengal has exited the scheme; while Punjab did not implement it at all.
Chief Minister Rupani, instead, launched an alternative State-funded scheme – Mukhya Mantri Kisan Sahay Yojana – covering all farmers under crop insurance with zero premium. “This is a much simplified scheme requiring no registration by farmers. Climatic extremities such as drought, floods or even unseasonal rains will be considered for claims.
Under the PMFBY, 15-17 lakh farmers were covered, whereas now all 56 lakh farmers – big and small – will automatically be covered,” Rupani said. The scheme will be rolled out with an outlay of Rs. 1,700-1,800 crore for the kharif 2020 season.
Under the new scheme, any farmer with up to four hectares of land will be eligible to claims according to the guidelines, which will soon be notified. A relief of Rs. 20,000 per hectare will be provided in the event of crop damage in the 33-60 per cent range, while Rs. 25,000 per hectare for damage in excess of 60 per cent. The relief amount will be directly credited to farmers’ accounts through direct benefit transfer (DBT).