Remove cap on Central share in crop insurance, urges Tamil Nadu CM M K Stalin

CHENNAI: Chief minister M K Stalin on Thursday urged Prime Minister Narendra Modi to remove the cap on the central share of premium subsidy under the Pradhan Mantri Fasal Bima Yojana scheme (PMFBY), a government-sponsored crop insurance scheme, and revert to 49:49:2 ratio premium share for the welfare of the farming community in the state.
In a letter to Modi, a copy of which was released to the media, the chief minister said the state witnessed a huge growth in terms of area insured and enrolment of farmers due to the best practices adopted by the state under the scheme. “However, the state’s share of the premium subsidy has increased at a compound annual growth rate of 28.7% in the last five years. This has stymied the very purpose of the scheme as the state is finding it difficult to sustain the scheme due to increasing financial liability that too during this pandemic period,” Stalin said.
Initially, the pattern of sharing in 2016-17 was 49:49:2 (central, state and farmer’s share respectively). The central share has now been capped at 25% for irrigated area and 30% for rain-fed area, resulting in an increase of the state share of the premium subsidy by 12%.
In terms of money, the state’s share of premium subsidy, which was ₹566 crore in 2016-17, mounted by 239% to Rs 1,918 crore during 2020-21, after the capping of central share of premium subsidy. This increased further to ₹2,500 crore in 2021-22 due to exorbitant actuarial premium rates (APR) quoted by the insurance companies empanelled by the Union government. “Thus, the financial implications on the state are causing a lot of concern,” the chief minister said.
Stalin also recalled the state’s proposal to present a separate budget for agriculture during this fiscal for the first time in the state. The objectives are increasing the area under cultivation, doubling the area cultivated and achieving high productivity in food grains. The government is also bringing in a robust climate-resilient cropping system to insulate farmers from weather aberrations.