The CSE report, released last week, had said that till April 2017, insurance companies collected a gross premium of Rs 15,891 crore, while claims totalled Rs 5,962 crore, ensuring a profit of almost Rs 10,000 crore for the insurers.
“It would statistically be more robust to undertake a comprehensive evaluation of both the framework and quality of implementation of the scheme over data sets garnered from at least two-three kharif and rabi seasons each and the central government will be doing this,” stated the latter.
At the micro level, insurance claims payout reflects actual crop loss, it added. This could be seen in the Karnataka districts districts of Mandya, (claims 630 per cent of premium), Chitradurga (408 per cent) and Mysuru (406 per cent). In Tamil Nadu, the claims are higher than premium collected in almost all districts.
These specific cases validate the rationale of the scheme’s overall framework, was the defence. However, it did acknowledge that timely settlement of claims remains an issue with the PM’s Yojana. This is dependent on providing yield data based on crop cutting experiments and premium subsidy to the insurance companies. The yield data is computed by the state governments, which have to also share a portion of the premium subsidy.
CSE says till April 2017, claims for Kharif 2016 were not paid or were partly paid in 14 of 21 states it studied. Only 32 per cent of the reported claims were paid by insurance companies, even when in many states the governments had paid their part of the premium.
On the high actuarial premium rates of over 12 per cent on an average under the PM’s Yojana, though the share of farmers remained low, the government said this was because it had requested the services of General Insurance Corporation of India to help ensure proper premium pricing, commensurate with the risk in different parts. Sctuarial premium went up due to reinsuring the risks.
On the low coverage of non-loanee farmers, the Centre said that as against the earlier five per cent of the total insured, their number had substantially risen to 23 per cent under the Yojana. The CSE report claimed the percentage of non-loanee farmers hasn’t risen by much, as compared to previous schemes.
The Centre also said the crop cutting experiments which are vital for assessment of loss were being improved and “with time, will become more robust…government will make necessary changes to the scheme framework and guidelines, based on the advice and also feedback from state governments”.