Try alternatives before imposing the penalty: Crop insurance firms to govt

Almost three years after it was launched, the Central government earlier this week released the updated operational guidelines for the ambitious Pradhan Mantri Fasal Bima Yojana (PMFBY) that proposed a 12 per cent interest as penalty on insurance companies for delay in processing claims and a similar amount on state governments for delayed release of premium subsidy.

Both the measures are meant to hasten claim settlement and ensure that farmers get the claims of the damages suffered on time, which has been found to be one of the biggest drawbacks of the much-talked-about scheme.

Low claims in comparison to the premium charged along with the fewer number of non-loanee farmers opting for the scheme are the other two complaints against the scheme.

The new operational guidelines try to address several complaints, but the biggest among them is imposing a sort of penalty on insurance companies and state governments.