After one year of launch, the farm insurance scheme is under revamp with the focus on increasing competition among insurers and lowering the average premium. It also aims to widen the scope of cover to include losses due to natural disasters. So far, such damage was covered by the National Disaster Response Fund.
Currently, the farmers have to pay 1.5 % to 2 % as premium.
The government estimates farmers have paid premium of Rs 2,000 crores, and the claims worth Rs 8,000 crores have been paid, whereas, another Rs 2,000 crores are under the settlement process.
The scheme now covers 30 per cent of the gross cropped area. Prime Minister Narendra Modi had assigned the Niti Aayog for suggesting ways to improve the farm insurance scheme, as it has faced criticism for tardy implementation and being skewed in favor of insurers. The Niti Aayog has prepared a blueprint for the scheme’s improvement under the supervision of member Ramesh Chand.