Scam record · 2017 · Policy harm
PM Fasal Bima: premiums up, farmer trust uneven
PMFBY replaced older crop insurance from Kharif 2016. Early seasons showed insurers collecting far more premium than they paid in claims. CAG and CSE flagged gaps that hurt the farmer-protection story.
Crop insurance is supposed to catch a farmer when the monsoon fails. Under PMFBY, farmer premium shares were capped low while actuarial rates charged by insurers could run much higher, with states and Centre filling the gap.
CSE analysis of early PMFBY seasons, and ministry-period data reported in the press, showed large premium pools against much smaller claim payouts in some seasons. That looks like insurer margin, not farmer relief.
CAG work on predecessor schemes already found weak beneficiary trails and money released to insurers without clean verification. Later farmer protests kept repeating delay, disputed yield cuts, and hard claim fights.
Government says coverage rose and later years tightened rules. Farmers still ask why the product feels built for balance sheets. Status stays contested: documented premium–claim gaps and audit warnings, not a single fraud FIR against the scheme design.
What is proven here
Proof level: contested. CSE/CAG/press-reported ministry figures document early premium vs claim imbalance. Later redesign claims should be checked season by season. Not treated as a finished criminal scam.
Sources
- Business Standard: CAG and CSE on crop insurance gaps (News + docs)
- The Wire: crop insurance helped companies more than farmers (News + docs)
- Business Standard / IANS: PMFBY kharif premium vs claims (News + docs)
- INC framing (secondary): 8 years, 8 frauds (Document)