Govt plans 12% interest on firms for claim delay

New Delhi: In a major move that may help farmers in getting their crop insurance claims on time, the government has decided to make two major changes in the existing Pradhan Mantri Fasal Bima Yojana (PMFBY).

According to Union Agriculture Minister Radha Mohan Singh, the government has decided to impose a penalty on both insurance agencies as well as state governments for delaying the payment of claims to farmers.

As per the proposed changes in the norms of new crop insurance scheme, the insurance agencies would have to pay the claim with 12 per cent interest on the whole amount if the delay in paying the crop insurance claim crosses over two months.

Similarly, states would also be levied 12 per cent interest if they delay in paying their share of the premium on time. The accumulated amount would be paid to farmers.

The information in this regard was given by the Union Agriculture Minister Radha Mohan Singh in response to the suggestions of senior Samajwadi Party parliamentarian Mulayam Singh Yadav during Question Hour on Monday.

Singh, while talking to Millennium Post, said that the Agriculture Ministry would soon seek approval from Finance Ministry for the suggestive changes in the crop insurance. "The objective behind bringing changes in the crop insurance is to ensure timely payment of the claim to farmers. The government would also give incentives to states for paying premiums before time," the minister said.

Suggesting Singh to take measures to make farmers prosperous and economically independent, Yadav said, "Prosperity of the country can be imagined only if farmers become prosperous. Prior to becoming a developed nation, America had provided all the facilities to farmers. First of all the government must waive off all farm loans – institutional and non-institutional, then only farmers would become prosperous."

"Provide the facilities of free healthcare, free education, and free irrigation to farmers to make them prosperous," Yadav suggested. In response to it, Singh said, "The new crops insurance is suraksha kavach for farmers. We removed all the hurdles in the previous crop insurance scheme and launched the new one to empower farmers."

"The usage of new technologies has fast-tracked the payment of claims as the payment period has been reduced to six months from earlier above one-year," the minister said.