CAG picks holes in crop insurance schemes, raps govt for poor project rollout in 2011-16

CAG said two-thirds of the farmers it surveyed were not aware of government schemes and the coverage of farmers under the schemes was also very low

IANS July 21, 2017 19:51:11 IST
CAG picks holes in crop insurance schemes, raps govt for poor project rollout in 2011-16

New Delhi: The CAG has picked several holes in the crop insurance schemes including Narendra Modi government's flagship Pradhan Manti Fasal Bima Yojana (PMBFY), saying delays in release of compensation by states to affected farmers defeated "the objective of providing timely financial assistance".

In its audit report on agriculture crop insurance schemes, tabled in Parliament on Friday, the Comptroller and Auditor General (CAG) highlighted irregularities in disbursing claims by banks and financial institutions to farmers' accounts under the crop insurance schemes and recommended introduction of a mechanism to ensure that state governments' shares are received in time.

CAG picks holes in crop insurance schemes raps govt for poor project rollout in 201116

Representational image. Reuters

The official auditor also said that the Agriculture Insurance Company (AIC) "failed to exercise due diligence in verification of claims by private insurance companies before releasing funds to them".

Mentioning discrepancies in the data relating to area sown and area insured, the CAG said: "The integrity of the data provided by the state governments in this respect by the AIC was not ensured."

The Central government introduced the PMBFY in Kharif season 2016, and restructured Weather Based Crop Insurance Scheme by replacing previous schemes.

Under PMFBY, farmers have to pay just 2 percent of the sum insured for Kharif crops, 1.5 percent for Rabi crops and 5 percent for horticulture and commercial crops, while the central and state government pay the remaining amount equally.

The CAG said two-thirds of the farmers it surveyed were not aware of the schemes, coverage of farmers under the schemes was very low while coverage on non-loanee farmers was negligible.

It also criticised the Central and state governments for poor monitoring of the scheme and failing to set up an independent agency to monitor implementation of schemes, preparing periodical appraisal reports and carrying out work allocated to state level and district level committees effectively.

The CAG said it noticed delays in receipt of yield data from state governments and in the processing of claims by insurance agencies.

It also said there was not scope for audit by the CAG though there was involved dispersal of a lot of funds to private insurance agencies under the schemes.

Grievances redressal systems and monitoring mechanisms for speedy settlement of farmers' complaints at the central and state level were adequate, it said.

It said the governments had to to be dependent on information provided by loan disbursing banks, financial institutions and insurance agencies as the scheme guideline did not seek to maintain a database of insured farmers "despite substantial financial contribution by way of premium subsidy (Rs 10,617 crore) and claim liability (Rs 21,989 crore)".

The CAG has asked the Central government to maintain a comprehensive database of beneficiary farmers and to take efforts to bring farmers, especially non-loanees, under the insurance schemes.

Its recommendations also include the introduction of technology for more accurate assessment of crop yields and efforts to reduce liabilities of the government without reducing the coverage.

Updated Date:

also read

British prime minister Boris Johnson cancels India visit due to COVID-19 situation
World

British prime minister Boris Johnson cancels India visit due to COVID-19 situation

Johnson will instead speak to Prime Minister Narendra Modi later this month to launch their plans for the future UK-India partnership, with their physical meeting expected later in the year

Narendra Modi hands over fast patrol vessel to Seychelles, inaugurates development projects
India

Narendra Modi hands over fast patrol vessel to Seychelles, inaugurates development projects

The prime minister also jointly inaugurated with Seychelles president Wavel Ramkalawan a solar power plant, a court building and 10 community development projects

Ram Navami 2021: Narendra Modi greets people, asks them to follow COVID-appropriate behaviour
India

Ram Navami 2021: Narendra Modi greets people, asks them to follow COVID-appropriate behaviour

'The message of Lord Ram to all of us is that we should follow the boundaries of appropriate behaviour', said the prime minister