New Delhi, July 24: The Centre has clarified the mechanisms for assessing climate-related crop losses and settling insurance claims under the Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Restructured Weather Based Crop Insurance Scheme (RWBCIS), while detailing several measures introduced to ensure timely compensation to farmers.
Union Minister of State for Agriculture and Farmers Welfare Ramnath Thakur provided the information in a written reply in the Rajya Sabha.
According to the Ministry of Agriculture, PMFBY and RWBCIS are primarily implemented on an “area approach” basis, under which insurance claims are calculated by comparing actual crop yields—determined through Crop Cutting Experiments (CCEs) and technology-based estimates under the Yield Estimation System using Technology (YES-TECH)—with threshold yields specified in the schemes’ operational guidelines.
However, losses arising from localized events such as hailstorms, landslides, inundation, cloudbursts and natural fires, as well as post-harvest losses caused by cyclones, unseasonal rains and hailstorms, are assessed on an individual farm basis. In such cases, claims are determined by a joint committee comprising representatives of the State Government and the concerned insurance company.
The ministry also distinguished crop insurance settlements from disaster relief assistance provided under the State Disaster Response Fund (SDRF) and National Disaster Response Fund (NDRF).
It said State Governments provide relief from SDRF resources following natural calamities, while additional assistance from the NDRF is considered for disasters of a “severe nature” after assessment by an Inter-Ministerial Central Team (IMCT).
At the field level, crop loss assessments under SDRF are carried out jointly by Revenue and Agriculture Department officials, with input subsidies becoming payable only when crop losses exceed 33 per cent. For NDRF assistance, States are required to submit a memorandum to the Centre, following which an IMCT conducts physical verification of the damage.
The ministry emphasized that SDRF and NDRF assessments are undertaken only during notified natural calamities and cannot be directly compared with claims settled under PMFBY and RWBCIS, which operate under a separate insurance framework.
The government further outlined several reforms aimed at expediting claim settlements under PMFBY. These include the development of the National Crop Insurance Portal (NCIP) for online enrolment, subsidy payments and direct transfer of claims to farmers’ bank accounts.
A dedicated DigiClaim module, operational since the Kharif 2022 season, has integrated the NCIP with the Public Finance Management System (PFMS) and insurance companies’ accounting systems to improve transparency and speed in claim processing.
Beginning Kharif 2024, insurance companies face an automatic penalty of 12 per cent for delays in claim payments. From Kharif 2025 onwards, State Governments are also liable to pay a 12 per cent penalty for delays in releasing their share of premium subsidies.
The Centre has additionally made it mandatory for States to maintain escrow accounts for advance deposit of their premium contributions from the Kharif 2025 season to improve financial discipline under the scheme.
To strengthen technology-driven implementation, the government has introduced measures including the CCE-Agri App for recording crop cutting experiment data, integration of State land records with the NCIP, remote sensing-based yield estimation through YES-TECH and the mandatory use of the Crop Loss Assessment App (CLAP) for assessing localized and post-harvest losses at the individual farm level.
The ministry said these initiatives are intended to enhance transparency, improve loss assessment and ensure faster and more efficient delivery of insurance benefits to farmers affected by climate-related risks.
