10 Years of PM Fasal Bima Yojana: What’s Working, What Needs Change?

As the Pradhan Mantri Fasal Bima Yojana (PMFBY) completes nearly 10 years, Dr. Lavanya R. Mundayur, head of the Agriculture Insurance Company of India, shared her views in New Delhi. She spoke about the scheme’s progress, key lessons, and what can be improved to help more farmers. Her suggestions could help shape the future of India’s crop insurance system.

A Decade of PMFBY: What Has Changed?

Dr. Mundayur said that PMFBY still forms the core of AIC’s business. The number of farmers joining the scheme is slowly growing, especially among those who do not take farm loans. She added that most states now follow pricing limits that have helped reduce premium rates. The old “open premium” model is nearly gone.

Challenges in Coverage Expansion

Despite the scheme’s success, the total coverage — in terms of both farmers and land area — has become flat. Although about 8 crore farmers regularly grow crops, only a part of them are covered under PMFBY. Dr. Mundayur said this is not due to opposition but because of a complex system involving banks and middlemen.

She supported the voluntary nature of the scheme, saying it’s the norm worldwide and more suited for countries like India where most farmers are small or marginal.

National vs. State-Level Plans

Dr. Mundayur believes that a single national crop insurance plan is better for handling basic risks. States can then add extra features based on local needs. She noted that while the Centre currently funds about 50% of the subsidy, the model might work better if the Central Government funds a bigger share, though not necessarily 100%. This would make the scheme more affordable, efficient, and help increase its reach.

Independent Review Needed

She suggested that an independent agency — like in the United States — should review the performance of the scheme and decide premium rates. This would make the system more transparent and science-based.