Archive · 11 Jun 2025
India Mandates Escrow Accounts for Crop Insurance Payments
The Indian government is making changes to a crop insurance program to help farmers get paid faster.
States will now have to set up special bank accounts to pay their share of the money on time.
The government is also using technology to better estimate how much crops yield.
This change is happening because sometimes payments to farmers were delayed.
The government also wants to make sure that claims for crop damage are assessed accurately.
The goal is to support farmers when their crops are damaged due to bad weather.
States must open escrow accounts for timely fund disbursement under the Pradhan Mantri Fasal Bima Yojana (PMFBY).
At least 50% weightage should be given to tech-based yield estimation (Yes-Tech).
The changes aim to address delays in claim settlements due to late state fund contributions.
Approximately Rs 4,440 crore in claim settlements have been delayed by states since the PMFBY launch.
In FY24, farmers received nearly Rs 500 in claims for every Rs 100 of premium paid.
- Who
- The government, states, and farmers.
- What
- Mandatory escrow accounts and increased use of technology in crop insurance to reduce payment delays.
- When
- From the next kharif season (2025-26).
- Where
- Across 23 states and union territories in India.
- Why
- To reduce delays in claim settlement under PMFBY, ensuring timely payments to farmers.
- Implementation Date
- 2025-26 kharif season
- Farmers Enrolled (2024-25)
- 41 million
- Hectares Covered (2024-25)
- 61.7 million
- States Implementing
- 23
- Total Claims Paid (2016-FY24)
- Rs 1.78 lakh crore
- Total Premiums Paid (Farmers)
- Rs 35,666 crore
- Farmer Premium Rates
- 1.5% (rabi), 2% (kharif), 5% (cash crops)
- Empanelled Insurance Companies
- 14