The Centre has been asked by a parliamentary committee to look closely into the reasons for why seven big states, including BJP-ruled Gujarat and Bihar, have withdrawn from the PM Fasal Bima Yojana (PMFBY), and has also questioned if this indicates failure or unpopularity of PMFBY or some major flaws in the Scheme.
In a report tabled in Parliament on Tuesday, the committee noted that since PMFBY was launched in 2016, Punjab never joined the scheme while Bihar and West Bengal withdrew from it in 2018 and 2019 respectively while Andhra Pradesh, Gujarat, Telangana and Jharkhand have not implemented the Scheme in 2020.
The Centre countered, saying despite seven states opting out, farmer applications under the scheme have increased from 4.85 crore in 2015-16 under erstwhile schemes to 6.08 crore under PMFBY in 2019-20, “that shows the popularity and success of the scheme.”
“As informed, the financial constraints of the state governments and low claim ratio during normal seasons are the major reasons for non-implementation of the Scheme by these States. Though most of the withdrawing States are implementing their own Scheme, the Committee is of the view that withdrawal or non-implementation of PMFBY by more States in subsequent years will defeat the very purpose for which the scheme was launched,” the committee said, asking Centre to look closely into the reasons.
The government said that as against 4.4 crore farmer applications received during Kharif 2019, farmer applications during Kharif 2020 were 4.27 crore due to non- implementation of the scheme by Andhra Pradesh, Telangana, Jharkhand and Gujarat.
“However, on comparing 17 common states which implemented the Scheme during both Sharif 2019 and Kharif 2020, farmer applications have increased from 3.58 crore during Kharif 2019 to 4.27 crore during Kharif 2020,” government told the committee.
The scheme was made voluntary for farmers since 2020. Farmers only pay 1.5% to 5% of the premium cost while the rest is bore 50:50 by the Centre and state governments. Multiple state and private insurance companies have been on boarded by the states for the scheme.
No Mandatory Deduction of Premium
The committee has strongly objected to a provision in the PMFBY which says the existing loanee farmers who do not want to get covered under the Scheme have the option of opting-out from the Schemes by submitting requisite declaration to loan sanctioning bank branches any time during the year but at least seven days prior to the cut-off date for enrolment of farmers for the respective season.
All those loanee farmers who do not submit the declaration would be essentially covered and premium is deducted, as per the current PMFBY rules.
“The Committee are of the considered view that though the loanee farmers can opt out of the Scheme by submitting a declaration form but most of the farmers are ignorant about this provision and the amount gets mandatorily deducted from their account. The Committee, therefore, recommend the Department to change this provision and provide that only those loanee farmers who want to avail the Scheme be required to fill the requisite form for deduction. There should be no compulsory deduction from the account of loanee farmers,” the committee has noted in its report.
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