Insurance companies will be penalized if crop insurance payouts delayed beyond two months

Insurance payouts for all crops insured under the Prime Minister Crop Insurance scheme have to be made within two months, the government announced today. Failing to complete the payments within the stipulated time will lead to penalties at the rate of 12 percent interest to be paid by the insurance companies.

Insurance companies will be penalized if crop insurance payouts delayed beyond two months

New Delhi. The government today announced that if insurance companies fail to act on the claims filed by farmers under the Prime Minister Crop Insurance scheme within two months, they will have to pay penalties at 12 percent interest. Agriculture minister Radha Mohan Singh made this announcement in Lok Sabha. He said that this scheme was announced by the prime minister in 2016 to make up for the losses suffered by farmers in the kharif crop of that year.

He said, "Those insurance companies that do not fulfill the claims of farmers within two months, they will have to pay a penalty of 12 percent interest."

"The government is working for the empowerment of farmers. The largest budgetary allocation has been made for the agri field. In addition, more money is being given from other funds. Crop insurance is like a safety cover for farmers. The claims are being finalized speedily. But often we see that state governments and insurance companies delay the claims. Hence it is necessary to make improvements in the crop insurance scheme. Now if the insurance companies delay the payouts, they will have to pay it with a 12 percent interest penalty. This penalty will be applicable for state governments too," he said.

Ten crore farmers have benefitted from crop insurance since 2016: Gajendra Singh Shekhawat, the Minister of State for Agriculture

These amendments were made in the crop insurance scheme to make amends for the shortcomings of previous schemes. The Agriculture Minister was making these statements in parliament in replay to a question. The written statement further says that agriculture is a state subject. Farmer related issues can be resolved by increasing their income. The aim of the government is that by 2022, the income of farmers should double. To achieve this the agriculture, cooperative and farmer welfare departments have made certain suggestions. The government is planning to transform this sector by focusing on income-generating farming.

Gajendra Singh Shekhawat, the Minister of State for Agriculture informed that since 2016, 10 crore farmers have benefitted from crop insurance. The Prime Minister Crop Insurance scheme launched in 2016 and included cover for the crops as well as any losses incurred before sowing and after harvesting. For this insurance scheme, farmers had to pay premium at the rate of two percent for kharif crops, 1.5 percent for rabi crops, and five percent for commercial and floriculture. The rest of the premiums were paid by the central and state governments.

Share it
Top