Lok Sabha Question No. 2677 (UNSTARRED), answered on 2025-12-16
Subject: Discrepancies in the Payment of Crop Insurance Claims
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Dr. Kalanidhi Veeraswamy

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE

## LOK SABHA UNSTARRED QUESTION NO. 2677

TO BE ANSWERED ON THE 16 TH  DECEMBER, 2025

## DISCREPANCIES IN THE PAYMENT OF CROP INSURANCE CLAIMS

2677. DR. KALANIDHI VEERASWAMY:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ͪष एवं ͩकसान कãयाण मंğी be pleased to state:

- (a) whether the Government has received reports of discrepancies and delays in the payment of crop insurance claim amounts under the Pradhan Mantri Fasal Bima Yojana (PMFBY) and other crop insurance schemes;
- (b) if so, the details thereof including the number of affected farmers and total pending claims,within Tamil Nadu during the last three years;
- (c) whether the Government has identified the causes for such discrepancies, if so, the details thereof;
- (d) whether the farmers continue to face delayed or reduced claim settlements, while insurance companies report rising profits; and
- (e) whether the Government has taken any action against insurance companies or implementing agencies, if so, the details thereof?

## ANSWER

## THE MINISTER OF STATE FOR AGRICULTURE AND FARMERS WELFARE कृ ͪष एवं ͩकसान कãयाण राÏय मंğी (SHRI RAMNATH THAKUR)

(a) to (e) :  As prescribed in the Operational Guidelines of  the Pradhan Mantri Fasal Bima Yojana (PMFBY),  majority of the claims are settled within the stipulated timelines i.e within 21 days of the receipt of requisite yield data from the concerned State Government,  by the insurance companies       However, during the implementation of PMFBY, some complaints were received in the past about payment of claims which are primarily on account of (a) delay in providing State Government share of subsidy  (b) non-payment/delayed payment or  under  payment  of  claims  on  account  of  incorrect/delayed  submission  of  insurance proposals  by  banks (c)  discrepancy in  yield  data  &  consequent  disputes  between  State Government and insurance companies etc.  The pending claims on account of these issue are settled after their resolution as per provisions of the scheme.

Details of claims calculated, Claims paid and pending during last three years i.e. from 2022-23 to 2024-25 in Tamil Nadu under PMFBY are given below :

| Year    | Application Enrolled   | Claims Calculated   | Paid Claims    | Pending Claims   |
|---------|------------------------|---------------------|----------------|------------------|
|         | (In No.)               | (Rs. In Crore)      | (Rs. In Crore) | (Rs. In Crore)   |
| 2022-23 | 61,37,961              | 920.65              | 917.61         | 3.04             |
| 2023-24 | 54,56,594              | 763.83              | 761.57         | 2.26             |
| 2024-25 | 53,66,966              | 732.96              | 680.11         | 52.85            |
| Total   | 1,69,61,521            | 2,417.43            | 2,359.28       | 58.14            |

Crop insurance is a major risk mitigation tool for the benefit of farmers in the event of non-preventable natural calamities. It may be noted that insurance is not an investment. Insurance is all about spreading the risk spatially & temporally. Insurers save premium in good seasons/years and pay high claims, if any, in bad years from the savings made in the good  years.        There  are  many  incidences  during  implementation  of  the  scheme  when insurance companies have paid claims in excess of 100% of premium received in case of natural calamities during different seasons.

Government has taken various steps to strengthen implementation of this scheme all over India to bring transparency and ensure timely settlement of claims:

-  Government has undertaken development of National Crop Insurance Portal (NCIP) as  a  single  source  of  data  ensuring  subsidy  payment,  co-ordination, transparency, dissemination of information and delivery of services including direct online enrollment of farmers, uploading/obtaining individual insured famer's details for better monitoring and to ensure transfer of claim amount electronically to the individual farmer's Bank Account.
-  In order to rigorously monitor claim disbursal process, a dedicated module namely 'Digiclaim Module' has been operationalized for payment of claims from Kharif 2022 onwards.  It involves integration of NCIP with Public Finance Management System (PFMS) and accounting system of Insurance Companies to provide timely & transparent processing of all claims.
-  Delinking  of  Central  Government  share  of  premium  subsidy  from  that  of  State Governments has been implemented so that farmers can get proportionate claims relating to the Central Government share.
-  As per the Operational Guidelines of PMFBY, in case payment is not made timely by Insurance Company, a penalty of 12% is auto-calculated and levied through National Crop Insurance Portal (NCIP) w.e.f. Kharif 2024.
-  Similarly, if State Government delayed its premium subsidy from stipulated time period, a penalty of 12% is to be paid by them also.
-  Tranche based claims settlement has been initiated from 2025-26.
-  Also,  towards  leveraging  technology  in  implementation  of  the  scheme,  various steps like capturing of yield data/Crop Cutting Experiments (CCEs) data through CCE-Agri  App  &  uploading  it  on  the  NCIP,  allowing  insurance  companies  to witness the conduct of CCEs, integration of State land records with NCIP etc. have already been taken to improve timely settlement of the claims to farmers.

Following  technologies  for  Objective  Crop  Damage  &  Loss  Assessment  and transparency have also been implemented w.e.f. 2023-24 under the scheme:

- i. YES-TECH  (Yield  Estimation  System  Based  on  Technology) for gradual migration to Remote-Sensing based yield estimation to help assess yields as well as fair and accurate Crop Yield Estimation . This initiative has been launched for paddy &  wheat  crops  from  Kharif  2023  wherein  30%  weightage  to  yield  estimation  will mandatorily be assigned to YES-TECH derived yield. Soybean crop has been added from Kharif 2024 season.
- ii. WINDS (Weather Information Network and Data System) for setting up of Network of Automatic Weather Stations (AWS) & Automatic Rain-Gauges (ARG) to the tune of 5 times of existing  network for collecting hyper-local weather data at GP & Block level.  This will be fed into a National database with interoperability & sharing of data in coordination with India Meteorological Department (IMD).  WINDS provides data not  only  for  YES-TECH  but  also  for  effective  drought  &  disaster  management, accurate weather prediction and offering better parametric insurance products.

Since  the  scheme  is  implemented  by  the  State  Government,  therefore,  in  order  to resolve  the  grievances/complaints  including  those  related  to  claims  of  insured  farmers, provision  of  Stratified  Grievance  Redressal  Mechanism  viz.  District  Level  Grievance Redressal Committee (DGRC), State Level Grievance Redressal Committee (SGRC) has been made in the Revised Operational Guidelines of the Scheme.    These committees have been given the detailed mandate as outlined in the Operational Guidelines for hearing the complaints/ grievances   and to dispose them as per the stipulated procedure.

To further  improve  the  grievance  redressal  mechanism, Krishi  Rakshak Portal  and Helpline (KRPH) has been developed.  A single Pan-India toll free number 14447 has been deployed and linked to the insurance companies database, where farmers can raise their grievances/issues.  Timelines to resolve these grievances/issues has also been fixed. Department is regularly monitoring the functioning of insurance companies, including timely settlement of claims through weekly video conferences of all stakeholders, one to one meeting as well as National Review Conferences.

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