In his second Independence Day speech from the ramparts of the Red Fort on Saturday, Prime Minister Narendra Modi is likely to announce a new crop income insurance scheme for all farmers nationwide. It is expected to cushion them against deficient monsoon, inadequate storage facilities, lack of assured power supply and restrictions on free trade between States.
The announcement — if Mr. Modi goes ahead with it as approved by the Union Cabinet — will be in sharp contrast to the “Make in India” appeal he had made in his maiden Independence Day speech last year.
The government expects the proposed scheme to address inadequate farm insurance cover. Only four per cent of the farmers were reported to have crop insurance cover and only 19 per cent ever used any, said a report released by the Reserve Bank of India in June. The report recommended that the insurance cover be expanded.
A top government official told The Hindu that earlier this week, the Union Cabinet approved the proposal after deliberations among the Agriculture, Finance and Rural Development Ministries.
“The decision is one step towards addressing India’s farm sector distress problems … It will also serve as a response to the Opposition’s relentless charge that Mr. Modi is anti-farmer, anti-poor and pro-business,” an official source said.
The poor crop insurance cover is among the reasons for suicide by farmers in distress. The Agriculture Ministry has said that 3,313 farmers had committed suicide for agrarian reasons in the past three years, with Maharashtra, Telangana, Karnataka, Andhra Pradesh and Kerala accounting for 3,301 of them.
The top official said the scheme would be rolled out on the direct benefit transfer (DBT) platform, along the lines of the Pradhan Mantri Jeevan Jyoti Yojana, the Pradhan Mantri Suraksha Bima Yojana and the Atal Pension Yojana. The DBT will address the issue of delayed settlement of claims. Most companies are unable to settle claims within 45 days of risk assessment, as is required under the rules. This is because of a variety of reasons, including belated availability of output loss assessment data. By government estimates, the Centre and the States incurred losses of over Rs. 2,600 crore during 2012-13 while providing insurance cover for a mere five per cent of the total value of crop output.
