Government enhances PMFBY with satellite-based yield estimation, digital claim processing, mandatory crop loss assessment app and penalties for delayed settlements

Key Highlights

• Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme (RWBCIS) continue to protect farmers against climate-related crop losses.
• Area-based crop insurance claims are calculated using Crop Cutting Experiments (CCEs) and YES-TECH satellite-based yield estimation.
• Individual farm-level compensation is available for localized disasters including hailstorms, floods, landslides, cloudbursts, natural fires and post-harvest weather damage.
• National Crop Insurance Portal (NCIP) and Digiclaim Module are streamlining claim processing and direct payments to farmers.
• Insurance companies face a 12% penalty for delayed claim settlements from Kharif 2024.
• State Governments also face a 12% penalty for delayed premium subsidy releases from Kharif 2025.
• Crop Loss Assessment App (CLAP) is now mandatory across all States and Union Territories under PMFBY.
• Information was shared by Minister of State for Agriculture and Farmers Welfare Shri Ramnath Thakur in a written reply in the Rajya Sabha.

Government Expands Digital Crop Insurance Framework to Tackle Climate Risks

The Government of India has outlined a series of technology-driven reforms to strengthen climate risk management under the Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Restructured Weather Based Crop Insurance Scheme (RWBCIS).

The schemes continue to provide financial protection to farmers against crop losses arising from adverse weather events and natural calamities, while new digital systems are improving transparency, speed and efficiency in claim settlements.

Under both schemes, claims are generally calculated using the Area Approach, where compensation is determined by comparing actual crop yields with threshold yields based on Crop Cutting Experiments (CCEs) and satellite-supported Yield Estimation System based on Technology (YES-TECH) wherever applicable.

Individual Farm Protection for Localised Disasters

Unlike area-based losses, PMFBY also provides protection at the individual farm level for specific localized events.

These include:

• Hailstorms
• Landslides
• Inundation and floods
• Cloudbursts
• Natural fires
• Post-harvest losses caused by cyclones
• Unseasonal rains
• Hailstorms after harvesting

Damage assessments are conducted jointly by officials from the State Government and the concerned insurance company within timelines prescribed under the scheme.

The Government clarified that compensation under PMFBY/RWBCIS is separate from relief provided through the State Disaster Response Fund (SDRF) and the National Disaster Response Fund (NDRF), which are activated only during notified natural disasters.

Digital Platforms Accelerate Claim Settlement

To improve service delivery, the Government has strengthened the National Crop Insurance Portal (NCIP), enabling:

• Online farmer enrolment
• Digital subsidy management
• Electronic claim transfers directly to bank accounts
• Centralised monitoring of insurance operations

A dedicated Digiclaim Module, operational since Kharif 2022, integrates NCIP with the Public Financial Management System (PFMS) and insurance companies’ accounting systems, enabling faster and more transparent claim processing.

Penalties Introduced for Delayed Payments

To improve accountability across the insurance ecosystem, the Government has introduced financial penalties for delays.

Key reforms include:

• 12% penalty on insurance companies for delayed claim settlements from Kharif 2024.
• 12% penalty on State Governments for delays in releasing their premium subsidy share from Kharif 2025.
• Mandatory ESCROW Accounts for State Governments from Kharif 2025 to ensure timely availability of premium funds and improve financial discipline.

Additionally, the Central Government’s premium contribution has been delinked from State contributions, allowing farmers to receive claim payments linked to the Centre’s share even if State payments are delayed.

Technology Driving Faster Crop Loss Assessment

The Ministry is expanding the use of digital technologies across crop insurance operations.

Key innovations include:

• CCE-Agri App for digital recording of Crop Cutting Experiments.
• Satellite-based YES-TECH for more accurate yield estimation.
• Integration of State land records with the National Crop Insurance Portal.
• Mandatory use of the Crop Loss Assessment App (CLAP) for assessing localized crop damage and post-harvest losses.

These technologies are expected to reduce delays, improve transparency and make insurance settlements more accurate.

Hospitality, Food & Tourism Impact

Strengthening crop insurance and climate resilience has important downstream benefits for India’s hospitality, foodservice and tourism sectors.

• Hotels, restaurants and catering businesses depend on consistent agricultural production for cereals, fruits, vegetables, spices and other key ingredients. Faster compensation helps farmers recover more quickly after climate-related losses, reducing disruptions in food supply.
• Improved climate resilience supports greater stability in food prices, helping hospitality operators manage procurement costs and menu planning.
• Technology-enabled crop monitoring encourages sustainable agricultural practices that benefit farm-to-table hospitality, wellness resorts and premium dining experiences.
• Rural communities that depend on agriculture are better positioned to sustain agritourism, village tourism and culinary tourism, even after adverse weather events.
• Digital insurance systems and quicker financial support also strengthen confidence across the agri-food value chain, benefiting food processors, exporters and hospitality businesses that rely on locally sourced produce.

Hospitality Outlook

As climate variability increasingly affects agriculture, India’s move toward digital crop insurance, satellite-based monitoring and faster claim settlement is a positive development for the hospitality ecosystem. A more resilient farm sector supports stable food supplies, protects regional agricultural economies and reinforces the foundation for sustainable hospitality, culinary tourism and farm-to-fork experiences across the country.