Govt plans workaround for crop insurance delay

Crop insurance claims amounting to Rs 339 crore made by over four lakh farmers under the Pradhan Mantri Fasal Bima Yojana (PMFBY) are pending in Karnataka for the past two years for reasons including unsuccessful Aadhaar validation and erroneous bank account details.

Karnataka has now proposed opening escrow accounts where insurance money can be parked for speedy settlement of claims so as to go around pendency piling up due to technical problems.

An escrow account is where funds are accumulated for specific disbursements.

Launched in 2016, PMFBY is one of Prime Minister Narendra Modi’s flagship schemes, which has been criticised for tardy implementation and that it allegedly favoured insurance firms.

Since the 2016 Kharif season, as many as 47 lakh farmers enrolled for crop insurance having paid a premium of Rs 420 crore. Till date, insurance companies have settled claims totalling Rs 2165.99 crore.

However, several thousands of claims made by farmers in drought-hit districts such as Bidar, Belagavi, Dharwad, Raichur, Koppal, Mandya among others remain pending, according to data tabled in the legislature by Agriculture Minister N H Shivashankara Reddy.

The reasons for pendency of claims include non-availability of bank account details, failure to validate Aadhaar, multiple cropping (growing two or more crops in the same land in the same growing season instead of one), issues with gram panchayat-hobli jurisdiction, objections on yield pending before the Centre and so on.

“A large scheme like this will have technical issues, which we resolve over time. To overcome delays in settlement of claims, we’ve proposed creating an escrow account with deputy commissioners,” Agriculture Secretary M Maheshwar Rao said, adding that modalities for opening such escrow accounts were being worked out.

In fact, even Odisha has proposed an escrow account for settlement of claims in the face of delays.

The state government has resorted to bulk transfers to banks in cases where technical issues prevented settlement of claims. “Karnataka was the first state to send money directly to bank accounts,” Rao pointed out. “In cases where the IFSC code was wrong or bank account details were erroneous, we’d look for an Aadhaar number and send money to the bank account linked with it. If even that didn’t work, we’d make a bulk transfer and ask banks to make sure they put the money in the right account,” he said.

This monsoon, as many as 15.43 lakh farmers have enrolled under PMFBY.

Agriculture Minister N H Shivashankara Reddy told the legislature on Wednesday that he will convene a meeting of insurance companies soon after the ongoing Belagavi session. The meeting will take stock of complaints, which several members raised, that a large number of farmers who had deposited their hard-earned money as premium to insure their crops under PMFBY had been cheated.