The Union Finance minister recently made claims about the number of insured farmers under the PMFBY. The Congress party also made claims about the recent revamping of the scheme. Here is a fact-check of both these claims.
The government on 19 February 2020, announced the revamping of Pradhan Mantri Fasal Bima Yojana (PMFBY). On one hand, the Budget Speech, delivered by Finance Minister Nirmala Sitharaman, hailed PMFBY for providing resilience to 6.11 crores farmers insured under scheme. On the other hand, the recent revamping has garnered criticism. In a recent post, the official twitter handle of the Congress claimed that the centre’s contribution in the scheme has fallen to 25% from 50%. We take a deep dive into both these claims.
What is the number of farmers insured under PMFBY?
Claim 1 (Point 22): PMFBY has provided resilience to 6.11 crores farmers insured under scheme.
Fact: In the lack of fully reported data for Kharif 2018 and 2019, and Rabi 2018-19, the claim remains UNVERIFIED. The last reported data from 2018-19 (without fully reported Rabi 2018-19 figures) shows that the number of farmers insured under the scheme stands at 568.12 lakh i.e. 5.68 crore.
The statement made during the budget speech delivered on 01 February 2020 claims that about 6.11 crore farmers have been insured under the PMFBY. Here is a look at different sources that report on the number of farmers insured under the scheme.
First, Department of Agriculture, Cooperation & Farmers Welfare’s Annual Report 2018-19 gives the coverage details under PMFBY for 2017-18. The total number of farmers insured during 2017-18 was reported to be 520.83 lakh i.e. 5.21 crore. However, any further updates on the number of farmers insured is not available as the next Annual Report 2019-20 is yet to be released.
Second, is the response of the government to the Lok Sabha and Rajya Sabha’s relevant questions on PMFBY. In a question answered on 07 February 2020 in Rajya Sabha, the Minister of Agriculture and Farmers Welfare furnished the following data:
Since the claims from Rabi 2018-19 were not finalised, the total number of farmers insured during 2018-19 stands as 568.12 lakh i.e. 5.68 crore. There have been no further updates on the number of farmer applications insured under the scheme.
Third, Department of Agriculture, Cooperation & Farmers Welfare’s Dashboard presents real-time macro data on various schemes. The total number of farmers insured during 2018 was reported to be 526 lakhs i.e. 5.26 crore and during 2019 was reported to be 535 lakh i.e. 5.35 crore. The dashboard shows that the data was uploaded on 26 February 2020. However, the data cited on the dashboard, which shows that it was last updated on 26 February 2020, is less than the data furnished by the Minister of Agriculture and Farmers Welfare on 07 February 2020, in Rajya Sabha. This shows a discrepancy in the data updated on the department’s portal.
Overall, the most reliable and recent reported data on the total number of farmers insured under the PMFBY comes from the Rajya Sabha answer on 07 February 2020. It reports that 5.68 crore farmers were insured under PMFBY in 2018-19 (with Rabi 2018-19 not finalised). In the absence of fully reported data for Kharif 2018 and 2019, and Rabi 2018-19, the claim in the budget speech cannot be verified.
Has Central Government’s contribution reduced?
Claim 2: The Central Government’s contribution in PMFBY has fallen from 50% to 25%.
Fact: The Central Government’s contribution in PMFY has fallen to 30% for unirrigated areas/crops and 25% for irrigated areas/crops. Therefore, the claim is PARTLY TRUE.
On 20 February 2020, the official handle of Congress party claimed that the centre’s contribution in the scheme has fallen to 25% from 50%. Pradhan Mantri Fasal Bima Yojana (PMFBY) has been introduced for implementation from Kharif 2016 season to provide full insured amount to the farmers against crop loss on account of natural calamities. The revamping of the scheme was announced on 19 February 2020.
The Operational Guidelines for PMFBY describe the rate of insurance charges payable by farmers as:
The guidelines mention that the difference between actuarial premium rate and the rate of insurance charges payable by farmers shall be treated as Rate of Normal Premium Subsidy, which shall be shared equally by the Centre and State. In other words, the contribution of the centre in subsidising the insurance premium was 50% of the normal premium subsidy beyond what the farmer pays and the remaining 50% was shared by states.
The recent revamping of the scheme changes the subsidy sharing equation between the Centre and States in the following ways:
- Centre’s contribution in subsidising the insurance premium would be up to 30% for unirrigated areas/crops and 25% for irrigated areas/crops, from the existing sharing pattern of 50:50 between Centre and States. Additionally, Districts having 50% or more irrigated area will be considered as irrigated area/district.
- Centre’s contribution in subsidising the insurance premium to be increased to 90% for North Eastern States, from the existing sharing pattern of 50:50 between Centre and States.
This reduction in central subsidy might substantially increase the burden on the state governments especially where the premium rates are higher. Hence the Congress party’s claim that the centre reduced its subsidy to 25% is partly true.