Centre Releases ₹3,200 Crore Crop Insurance for Farmers Hit by Natural Disasters, Unveils Faster Payouts

The Central government released ₹3,200 crore installment of Pradhan Mantri Fasal Bima Yojana on August 11, according to Fortune India.

This is the first installment given to farmers, with ₹8,000 crore to be released later, Union Agriculture and Farmers Welfare Minister Shivraj Singh Chouhan said on August 11.

Announcing the package in a post on X, the union minister said that insurance companies that do not deposit the amount to disaster-affected farmers on time will face a 12 per cent interest penalty, which will be directly given to farmers.

"Today, approximately 30 lakh farmers affected by natural disasters will have ₹3200 crore deposited into their accounts under the Pradhan Mantri Fasal Bima Yojana. This is the first installment, so farmers whose accounts do not receive funds today should not worry. Approximately ₹8000 crore will be released later," the union minister wrote on X in Hindi.

"In natural disasters, crops get destroyed, and when that happens then it is not just the crops which get destroyed but the lives of farmers too, so for that the Prime Minister made Pradhan Mantri Fasal Bima Joyana, which became a boon for all the affected farmers," the union minister said in the video posted on X.

Expressing his commitment to farmers' welfare, Minister Chouhan called on the farmers to address any complaints about the scheme to him.

"Farmer brothers and sisters, serving you is my worship of God. If you have any complaints regarding the crop insurance scheme, please inform me. We always stand with you," he added.

Elaborating on the interest payments the insurance companies will have to pay on delayed payment, he stated, "This scheme has become a boon for disaster-affected farmers. To ensure farmers receive funds on time, we have decided that if an insurance company fails to deposit the money within the stipulated time frame after a claim, it will have to pay 12% interest, which will go directly to the farmer's account."

Reforms to Speed Payouts

Meanwhile, the government has unveiled deeper reforms redefining accountability in crop insurance.

From the Kharif 2025 season, claims will now be processed and disbursed even if a state delays its premium contribution—ensuring farmers receive at least the Centre’s share promptly.

State governments defaulting on their premium obligations will face a 12% penalty. All these measures are automated through the National Crop Insurance Portal (NCIP). It helps with online farmer enrolment, data sharing, monitoring and direct transfer of claim amounts to farmers' bank accounts.