New Delhi: The hike in crop insurance allocation in the Budget has been hailed by the insurance companies as they see this an opportunity to expand their business.
The government has decided to increase the coverage under the Pradhan Mantri Fasal Bima Yojana from 30 per cent to 40 per cent in 2017-18 and 50 per cent in 2018-19.
The government has increased its spending on PMFBY to Rs 13,240 crore, which the industry believes will help bring more farmers under the insurance cover.
“Indian farmers need risk mitigation mechanism in the form of insurance and PMFBY will compensate them whenever they suffer crop loss during natural disasters,” New India Assura-nce CMD G. Srinivasan said.
New India has underwritten premium of Rs 1,100 crore under the scheme in the current fiscal so far and it plans to increase it to Rs 2,000 crore in the next financial year.
“The increase in insurance cover under PMFBY will result in increase in premium by 15-20 per cent by the industry in the next fiscal,” National Insurance chairman and managing director Sanath Kumar said.
ICICI Lombard MD & CEO, Bhargav Dasgupta said, “This government has done more to promote insurance as a risk mitigation tool and the decision to increase the coverage under the Pradhan Mantri Fasal Bima Yojana to cover 40 per cent of crop area is a continuation of that approach.
“The budget aims at continuing with the government’s agenda of pursuing an inclusive and long-term development of the economy by focusing on the core enablers, including infrastructure, digitisation, rural development, among others. New initiatives, such as a proposed model on contract farming are a welcome move,” Dasgupta said.
