Mumbai: The state govt is considering scrapping its Re 1 crop insurance scheme which began two years ago after being confronted with a state inquiry detecting around six lakh bogus applications worth a payout of Rs 400 crore. The govt feels it will save on premiums worth Rs 6,000 crore after winding up the scheme.
The state inquiry found that the number of applicants for the scheme increased substantially after the fee to be paid by farmers was reduced to a nominal Re 1 by the state in March 2023. “In 2023-24, the number of applicants increased from 1.4 crore to 2 crore for both the kharif and rabi seasons,” said a senior official. “The insurance premium paid by the govt tripled from Rs 2,000 crore to Rs 8,000 crore during the period.”
The inquiry found major irregularities during this period, with 6 lakh bogus applications for crop insurance. The problem was compounded by those manning common service centres (CSC) set up nationally to aid in the delivery of govt schemes, officials said. Bogus applications were passed by over 96 CSCs. There were cases where the applicants for crop insurance were from other states. Or the land insured was not farmland but belonged to places of worship, was non-agricultural land or even govt land.
“The CSCs receive an honorarium of Rs 40 per application and it looks like they were trying to increase the number of applicants in order to earn higher honorarium,” said a senior official. The districts with the largest number of bogus applicants included Beed, Satara, Parbhani and Jalgaon.
The inquiry had recommended scrapping the scheme and to present a revamped scheme for the kharif season in 2025. It also recommended using the additional premiums that had been generated towards capital investment in agriculture. “The additional premiums and the liabilities could release an investment of Rs 10,000 crore,” said a senior official. The state is also under intense pressure to cut down on costs since it now faces a debt of Rs 9.3 lakh crore.