This essay argues that moving beyond insurance and pension schemes is essential for holistically improving the lives of agricultural labourers. It is crucial to invest in strategies that empower this workforce through skill development, education, and the creation of diverse employment opportunities, enabling them to transition smoothly into non-agricultural sectors and improve their overall well-being.

Defining agricultural labourers

Agricultural labourers are individuals who work on farms or in agricultural activities for wages, rather than operating their own farms. They do not own the land they cultivate nor the tools they utilise. Agricultural labourers provide the manual labour required for various agricultural tasks. They play a critical role in ensuring food security and supporting the livelihoods of millions in rural areas. In India, they represent a substantial portion of the workforce. The 2020-21 Periodic Labour Force Survey reported that 46.5% of people in India are engaged in agricultural activities.

Agricultural labourers are essential to the agricultural sector because they perform tasks vital for food production. These tasks can include:

• Preparing land for cultivation
• Sowing, planting, and transplanting crops
• Maintaining crops through weeding and irrigation
• Harvesting and threshing crops
• Tending to livestock and poultry

While the ongoing shift towards farm mechanisation aims to enhance productivity, it also poses a challenge to the traditional employment patterns of agricultural labourers. This displacement necessitates exploring alternative employment avenues to ensure their continued well-being.

Farm mechanization, reduced labour demand, and potential risks

Farm mechanisation is causing a decline in the demand for manual labour in India by replacing human workers with machines for various tasks. This shift is driven by the need for greater efficiency and output in the agricultural sector. The increasing production of crops like grains, cereals, and oilseeds requires faster and more effective harvesting procedures.

Powered machines help meet this need, enabling farmers to reduce costs and increase yields. As per a 2022 report by Parliamentary Standing Committee on Agriculture, Animal Husbandry and Food Processing, 47% of agricultural operations in India are now mechanized, highlighting the ongoing transition. Machines are employed in a wide array of agricultural activities, including seed-bed preparation (ploughing, harrowing), sowing and planting (seed drills), inter-culture operations (weeding, fertilizer application), harvesting and threshing (combine harvesters), and irrigation (tube wells, electric and diesel pumps).

The adoption of farm mechanisation offers several benefits, such as cost reduction due to lower labour expenses and faster task completion. Mechanisation also leads to significant savings in seeds and fertilizers, ranging from 15 to 20 percent, at a conservative estimate.[2] It enhances productivity through improved operational speed and precision in tasks like sowing and harvesting. Furthermore, it optimises resource utilization by ensuring the accurate application of seeds, fertilizers, and pesticides, reducing waste and environmental impact. Lastly, it allows for increased cropping intensity and higher yields by enabling farmers to work on larger areas efficiently.

However, this transition to mechanisation poses risks for agricultural labourers who depend on manual work. A study in the West Godavari district of Andhra Pradesh found that a one-unit increase in input costs and machine time led to a decrease of 0.06 and 4.34 units in labour requirements, respectively, demonstrating the direct impact of mechanization on labour demand.[3] As machines take over tasks once done by humans, labourers face potential job displacement, unemployment, and lower wages due to an oversupply of labour in the market. Marginal and small farmers, who constitute a significant proportion of India’s agricultural workforce, may struggle to afford or operate expensive machinery, potentially widening the gap between them and larger, more mechanized farms. The displacement of labourers also necessitates finding alternative employment opportunities and providing skills training to facilitate a smooth transition to non-agricultural sectors.

This shift can lead to an unstable income for agricultural workers, creating financial uncertainty for rural families who depend on these earnings. Establishing alternative employment options beyond agriculture would provide these families with a much-needed safety net, helping them maintain a stable income even as the agricultural landscape changes.

Importance of skill development

To help agricultural workers transition to new job sectors, skill development is key. As traditional agricultural tasks are met with low demands, these workers need training in skills that fit other growing industries, such as manufacturing, construction, or services. Programmes that focus on building these skills would empower agricultural labourers to secure better-paying, sustainable jobs, giving them an opportunity to improve their financial outlook and move beyond agriculture-based income.

The need for steady income sources

A reliable income stream is crucial for the well-being of rural families. When families have a consistent income, they can invest in essentials like education and healthcare, breaking the cycle of poverty and building a brighter future. By fostering employment opportunities outside of agriculture, rural families can reduce their dependence on the land, bringing stability and resilience to rural communities as they adapt to modern agricultural practices.

Schemes-the abundance and the lack

The government has several schemes for agricultural labourers but a good amount of them revolve only around insurance and pension. Insurance is a risk mitigation instrument i.e. it exists to make sure that the person who is insured does not find themselves in worse situation than they are in currently. Pension too supports the current situation rather than helping the person to achieve a better standard of living.

The Indian government has enacted the Unorganised Workers’ Social Security Act, 2008, to provide social security benefits to workers in the unorganized sector, including agricultural labourers. This act mandates the creation of welfare schemes for unorganized workers, addressing life and disability cover, health and maternity benefits, old age protection, and other benefits determined by the Central Government.

Several specific schemes fall under this act:

Aam Admi Bima Yojana (Department of Financial Services)

Rashtriya Swasthya Bima Yojana (Ministry of Health and Family Welfare)

In addition, there are three other schemes by the Central Government that offer coverage to agricultural labourers:

• Atal Pension Yojana
• Pradhan Mantri Jeevan Jyoti Bima Yojana-Life Insurance
• Pradhan Mantri Suraksha Bima Yojana-Accident Insurance

Pradhan Mantri Shram Yogi Maan-dhan Yojana (PM-SYM), launched in 2019, is a pension scheme that provides a monthly pension of Rs. 3000/- to unorganized workers, including landless agricultural labourers, after they reach the age of 60.

Beyond these, other schemes might benefit agricultural labour, but they do not specifically address the loss of employment due to farm mechanisation.

In a reply to a question posed by an MP, which asked about details regarding the shift of people from agriculture to other activities, the government did not provide the details of such shift. Instead of a direct answer, the reply talked about unrelated things and concluded by saying that the Government of India has implemented various initiatives and policies to boost economic growth and employment in the country.
The reply listed initiatives aimed at boosting non-agricultural sectors, including the “Make in India” program, “Start-Up India” initiative, “Pradhan Mantri Mudra Yojana,” and skill development programs. However, it lacked specific details on how these programs incentivize a shift from agriculture.[4]

This reply also throws light on the fact that the government has been working with scarce data which could affect efficient and effective policy making.

The reason why agricultural labourers need extra protection is because they are deprived of all kinds of resources necessary to get a better life. They are restricted from accessing benefits urbanisation due to lack of capital or skill to move to the city. They are restricted from agriculture due to lack of land etc. Therefore, their lack of resources cannot be solved by placing basic safety nets that barely help them when something bad happens.

A holistic plan-based upliftment must be undertaken to ensure that they do not get left out as the process of farm mechanisation begins to pace up. Specific manufacturing hubs that prioritise employment of women, near villages, incentivising the employment of women along with providing standard health and education facilities can be effective. Only by creating conditions that ensure the improvement in living conditions of agricultural labourers, the goal of restricting unemployment and poverty in rural poor and agricultural labourers can be achieved.

(The author is part of the legal research team of the organisation)

[1] Pib.gov.in. (2024). Agrarian Land. [online] Available at: https://pib.gov.in/PressReleasePage.aspx?PRID=1601902 [Accessed 6 Nov. 2024].

‌[2] Guru, P., Borkar, N., Debnath, M., Chatterjee, D. and Panda, B. (n.d.). Rice mechanization in India: Key to enhance productivity and profitability. [online] Available at: https://krishi.icar.gov.in/jspui/bitstream/123456789/31952/1/2.8.pdf.

[3] Gousiya SK and Suseela K, ‘IMPACT of FARM MECHANIZATION on INCOME and EMPLOYMENT and CONSTRAINTS in MECHANISATION of RICE CULTIVATION in WEST GODAVARI DISTRICT’ (2021) 49 The Journal of Research ANGRAU 107 <https://epubs.icar.org.in/index.php/TJRA/article/view/133453?articlesBySimilarityPage=4> accessed 6 November 2024.

[4] LOK SABHA STARRED QUESTION NO.228, 2023 Available at: https://sansad.in/getFile/loksabhaquestions/annex/1714/AS228.pdf?source=pqals

Related:

Listen to the lament of the landless-farm labourer!

Farmers and labourers resolve to oppose Centre’s laws targeting them

From farm labourer to erudite defence counsel to public prosecutor to High Court Judge BG Kolse Patil, today a mass leader speaks…

The post Beyond insurance: addressing the needs of India’s agricultural labour force appeared first on SabrangIndia.

A post from APPSC IIT Bombay on Twitter said, “There is no medical insurance policy for students at @iitbombay even though students pay Rs. 1750 as medical fee and Rs. 250 as insurance fee. The procedure for availing of medical expenses is completely arbitrary and opaque. Despite the promise of making a proper document, nothing is done.”

The post further said, “As a result of fee hike protests in August 2022, it was agreed by administration that the current system was arbitrary and opaque. It was promised to students that a medical insurance policy document will be prepared and circulated soon.”

The post can be viewed here:

Notably, a previous RTI (Right to Information) petition filed by the APPSC revealed that 19 of the 23 IITs have dedicated cells for the welfare of historically marginalized Scheduled Caste and Scheduled Tribe (SC-ST) students, out of which, sixteen remain inoperable. According to RTI data received by the APPSC, 18 cells have no funds allocated, and 16 have not held any events after August 2022. IT is essential to note that IIT BHU, IIT Kharagpur, IIT Hyderabad, and IIT Bhubaneswar are among the 16 institutes.

Related:

“Highly appalling to see SIT ignoring rank caste discrimination Darshan faced despite overwhelming evidence”: Ramesh Solanki

How many lives will it take before India acknowledges dominant caste hegemony in educational institutes?

Lessons Unlearned: Nine years after the Thorat Committee report

The Death of Merit: Dalit Suicides in institutes of higher learning

Systemic Prejudice, Absence of Grievance Redressal reasons for Dalit Suicides: Teacher Testimonies

A letter that should shake our world: Dalit scholar suicide triggers outrage

Rohith Vemula’s ‘institutional murder’: Five years on, family and friends still wait for justice

Why have India’s elite institutions sounded the death knell for Dalit Adivasi-Muslim scholars?

IITs unable to create safe spaces for students

IIT Mumbai report on Darshan Solanki death, crucial evidence overlooked

The post Even after paying, no provision stands for providing health insurance to IIT Bombay students: APPSC appeared first on SabrangIndia.

Beneficiaries enrolling themselves for the Rashtriya Swasthya Bima Yojana (RSBY) or the National Health Insurance Programme in Andhra Pradesh

Unexpected shocks such as the death of a family member lead to financial loss. The lack of adequate cover in these situations makes people prone to high financial instability. This is more severe in the case of the unorganised sector: Informal workers in the unorganised sector are exposed to additional risks in the form of income volatility, hazardous workplace conditions and lack of old-age benefits. These risks can be reduced through insurance.

With 82% of India’s workforce engaged in informal employment in the unorganised sector, 392.31 million workers and their families–more than the population of United States–live under constant threat of financial setbacks due to insufficient or non-existent coverage.

India had about 328 million life insurance policies in 2017, according to data from the Handbook on Indian Insurance Statistics, 2016-17, of the Insurance Regulatory and Development Authority of India (IRDAI). Assuming each policy corresponds to a unique citizen, this accounts for 25% of the population having life insurance cover, leaving 75%–or 988 million Indians–without cover.

Considering a person may hold more than one such policy, the number of Indians not covered by life insurance may be higher. Currently, there are no data on the number of unique Indians with life insurance cover.

Further, an average working person is assured of, as we said, only 8% of what may be required to protect a family after the death of an earning member, according to our analysis of data by leading global reinsurer Swiss Re. This is much lower than the insurance coverage adequacy of 44% in Japan, 84% in Taiwan and 67% in Australia.

“There are low levels of insurance penetration (life and non-life) despite numerous sources of risk such as rainfall (leading to income shocks in largely agrarian segments of the population), health shocks, and catastrophes such as floods or cyclones,” the July 2017 Household Finance Committee report of the Reserve Bank of India (RBI) pointed out.  

India at par with emerging markets in coverage–but, the devil is in the details
Globally, three standard metrics are used to understand insurance cover: Annual premium growth, insurance density and insurance penetration. However, these do not reveal the actual picture, as we will explain later.

1. Annual premium growth: India’s total real premium growth rate for life insurance–the annual rate of increase in premium collected by the life insurance industry in real terms i.e. adjusted for inflation–is 8%, according to the IRDAI’s 2017 annual report.

While this is better than Brazil’s 1.2%, it is lower than Russia’s 48.2% and China’s 21.1%, data show.

2. Insurance density is the ratio of insurance premium–the price paid by consumers for insurance cover–to population.
India’s life insurance density (adjusted for purchasing power parity) was $811.3 in 2016–ahead of Brazil ($390) and China ($659.7) but below the UK ($2,129.3), USA ($1,724.9) and South Africa ($2,611.7, according to data from the IRDAI Annual Report, 2017.

3. Insurance penetration is the ratio of insurance premium to the country’s gross domestic product (GDP).
India’s life insurance penetration was 2.72% in 2016–comparable to Brazil (2.28%), China (2.34%) and the US (3.02%), but lower than South Africa (11.52%) and the world average (3.47%).

These figures suggest that India is at par with other emerging markets. But, the devil is in the details.

For instance, there are no data, as we said, on the number of unique individuals covered. Further, the data do not provide insights into the variations across income classes, social groups, occupations and geographies.

These metrics also do not give clarity on whether the protection provided is adequate to cover financial shock.

The Indian government’s Ministry of Statistics and Programme Implementation acknowledges that the “statistical information currently available on insurance is scattered and inadequate”.

Let us take the example of personal accident insurance in India to understand this.

Understanding the lack of data: The case of personal accident insurance
Personal accident insurance usually covers death or disability caused due to an accident. As of 2017, 65% Indians are covered by personal accident insurance, according to data from the IRDAI’s 2017 annual report.

This includes policies issued under Indian Railways Catering and Tourism Corporation (IRCTC), Pradhan Mantri Jan Dhan Yojana (PMJDY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).

Coverage Of Major Personal Accident Insurance Schemes In India
Source: Table I.62, IRDAI Annual Report, 2017
IRCTC personal accident insurance is available only for passengers travelling through the Indian Railways with an e-ticket, and is valid for only the duration of that particular journey. It does not cover people travelling in unreserved compartments on passenger trains, and those commuting on suburban trains.

PMJDY accounts offer RuPay insurance as a special benefit. But this covers only those account holders who have made a transaction within 90 days (for non-premium cardholders) or 45 days (for premium card holders) prior to the date of accident, according to the scheme guidelines.
Over 20% of PMJDY beneficiaries haven’t even been issued RuPay cards, PMJDY data from December 2016 show. Further, 48% of people holding an account with a financial institution–banks, credit unions, microfinance institutions, cooperatives and post offices–have neither deposited nor withdrawn in the past year, according to the 2017 Global Findex released by the World Bank.

So, they cannot avail RuPay insurance even if they have a PMJDY account.

If we exclude PMJDY and IRCTC schemes, the personal accident coverage of the country’s population reduces to 25%.

So, how best can insurance coverage and adequacy be measured?
Let us understand what other metrics we can use to measure insurance coverage along with adequacy and how India fares with respect to these metrics.

1. Sum assured to GDP ratio
A metric that comes close to measuring the extent of coverage is the sum assured–the money that is paid to families after a death–to GDP ratio.
The total sum assured accounts for 58% of India’s GDP, according to this 2013 RBI report. This is more than that of China (33%) and Indonesia (28%) but much behind the US, Germany, South Korea and Japan where it is in the range of 105%-321%, illustrating the poor quality of cover in India.

As of March 2017, the sum assured to GDP for life insurance in India is 65%, according to our analysis of data from the IRDAI’s 2017 annual report and the handbook mentioned above.

2. Mortality protection gap and protection margin
The global reinsurer Swiss Re uses mortality protection gap and protection margin as metrics to assess the adequacy of insurance coverage.

Mortality protection gap is the difference between the resources needed and the resources already available for the family to maintain their living standards, in the event of death of a working family member. Protection margin is the ratio of protection gap and protection needs.
To understand this, let us consider a three-person low-income household with a school-going child and working parents. In the event of the mother’s death, the household income would suffer, the child’s education would be at risk and the very survival of the child and her father would become difficult, as they may not have enough resources to live on.

Let us assume that after the death of the mother, the family has some savings in the bank and the amount claimed from life insurance. The protection gap would be the difference between this amount and the resources they need to fund necessities such as food, healthcare and education. The protection margin would be the ratio between this protection gap and the actual protection needed to nullify the effect of the mother’s death on their financial lives.

India has the highest protection margin in the Asia Pacific region at 92.2%. This means having savings and insurance of just Rs 7.8 for every Rs 100 needed for protection, leaving a protection gap of Rs 92.2.

Further, India’s mortality protection gap rose 11% every year, on average, over the past decade, data show.

Why aren’t Indians sufficiently covered?
Most insurance products in India are not pure protection products, but are endowment products that offer protection and investment features, according to this 2017 report by McKinsey, a global consultancy.

For instance, of the 21 life insurance plans offered by India’s Life Insurance Corporation (LIC), the largest player in India’s life insurance market with 70% market share, only three are pure protection products.

Insurance cover offered by endowment insurance products tends to be much lower than that offered by pure protection products.

Most Indian seeking insurance rely on the insurance agent’s advice on what products to purchase. Insurance agents tend to market products that maximise their own well-being instead of products that are suitable for the consumer, this 2011 field study found.

To tackle the issues of awareness and underinsurance, the central and state governments have come out with schemes for risk protection, especially for the socially and economically vulnerable sections of the population. But these schemes are falling short of their objective of providing adequate risk protection for low-income households, as is reflected in our analysis.

We also need to go beyond conventional measures and explore more statistically rigorous indicators such as protection margin. Towards this end, the IRDAI should proactively provide data on coverage and sufficiency of coverage.

(Aparajita Singh is a Policy Analyst at Dvara Research, a financial policy research institution.)

Courtesy: India Spend
 

The post 988 Mn Indians Do Not Have Life Insurance. Those Who Do, Are Insured For 7.8% Of What’s Needed To Cover Financial Shock appeared first on SabrangIndia.

Her son Pradip Thakur told the newspaper that the officials at the Canara Bank’s Dahanu branch said his mother hadn’t filled out a specific form while opening the account under the Central government scheme, which guarantees accident cover of Rs. 1 lakh to the account holder. “My mother had opened an account in the bank under the Pradhan Mantri Jan Dhan Yojana. I want the bank to pay the insurance amount. Modi jine kaha tha (PM Narendra Modi had promised it),” says Mr. Thakur. Ms. Thakur had nominated her husband as the beneficiary.

He adds: “We are not very educated. It was the bank’s duty to inform us about the form when we were applying for the account with them.”

His wife, Rekha, adds, “How were we to know the procedure? They told us about other formalities, but didn’t mention a form for insurance. Rekha says she had accompanied her mother-in-law to the bank and both had applied for Jan Dhan accounts on the same day.

The bank officials are defending themselves, however. Insurances for riots and manmade disasters, anyway run into several complications as people-unfriendly regulations and a sector that has not been made accountable, are not made to pay up.

Officials at the Canara Bank’s Dahanu branch said Ms. Thakur is to blame for the situation. Initially, Manisha Matkar, the branch manager, said the Thakurs were mistaken. “Mr. Thakur is probably talking about another insurance cover, under which you need to contribute Rs. 12 per month. He should have approached me to resolve the issue,” Ms. Matkar said, when this reporter sought to know if bank officials were aware of the in-built insurance cover for Jan Dhan account holders.
Vineet Abraham, who will be succeeding Ms.Matkar as branch manager, said he doesn’t know about the Thakurs’ problem. claims he has no idea about the issue. “The person should have filled the form,” he said.

The post Amarnath Yatra Victim’s Son Refused Bank Insurance Payout: The Hindu appeared first on SabrangIndia.

 
A flagship scheme of the Modi-led NDA II government, the  Prime Minister Fasal Bima Yojana, launched on January 13, 2016, faces serious allegations of corruption, as only a meagre 3.31 % out of the total amount of Rs. 21, 500 crores collected by insurance companies (for 2016-2017) has been actually disbursed. Minister of State for Agriculture and Farmers Welfare admitted in the Rajya Sabha, that only a measly Rs. 714.14 crores   had been actually disbursed as claims of payment until April 7, 2017 out of the Rs 4270.55 crores collected for the Kharif crop of 2016.   The allegation is that corporate houses have siphoned the remaining around 97% of the premium income amount of Rs 21,500 crores collected from farmers.

The arbitrary action of the Finance minister of providing premium income to the tune of 400% more than the previous year when the number of farmers covered had increased by a meagre 38% over the previous year. This willful allocation of public resources to facilitate profiteering for private insurance companies’ amounts to corruption, favoritism and politically motivated distribution of financial and material inducements, benefits, advantages and spoils, said the All India Kisan Sabha at a press conference yesterday.

The number of farmers covered under various Crop Insurance Schemes during the last three years was 332.35 lakh in 2013-14, 370.32 lakh in 2014-15 and 407.45 lakh in 2015-16. In 2016-17 the number is 562.96 lakh. Though the premium amount collected in the year 2016-17 showed an increase of an inflated 400%, the number of farmers covered was increased only by 38%.

This shows there is an extraordinary leap in the allotment which is not reflected in the coverage. Two months before these facts were revealed in the Rajya Sabha, in Para 24 of the 2017-18 budget speech of the Finance Minister Arun Jaitley on February 3, 2017, a contrarian impression was given:-

 “at the time of sowing, farmers should feel secure against natural calamities. The Fasal Bima Yojana launched by our government is a major step in this direction. The coverage of this scheme will be increased from 30% of the cropped area in 2016-17 to 40% in 2017-18 and 50% in 2018-19. The budget provision of Rs 5,500 crores for this Yojana in BE 2016-17 was increased to Rs 13240 crores in RE 2016-17 to settle the arrear claims. For 2017-18, I have provided a sum of Rs.9, 000 crores. The sum insured under this Yojana has more than doubled from Rs 69,000 crores in kharif 2015 to Rs 1, 41,625 crores in kharif 2016”.

However, the un-starred question NO.4026 in Rajya Sabha answered on April 7, 2017 by Purushottam Rupala, the Minister of State in the Ministry of Agriculture and Farmers Welfare reveals that the claim for payment in Kharif 2016 is only a small Rs.4270.55 crores which is even below the budgetary provision of Rs 5,500 crores in BE 2016-17.

The Finance Minister needs to explain to the farmers and the public as to where are the claims of arrears being settled as he had claimed in the budget speech ? 

Former union minister, Kapil Sibal had raised a question that was answered by Purushottam Rupala on April 7, 2017.
Question: Will the Minister of AGRICULTURE AND FARMERS WELFARE be pleased to state:

1. the details of crop insurance schemes started by the Government post May, 2014;
2.  the details of the total number of farmers insured under the schemes, State/ UT-wise; and
3. the details of total claims received and disbursed by Government on crop failures?  

Answer

Minister of State in the Ministry of Agriculture and Farmers Welfare, Purushottam Rupala

(a) to (c):         Post May 2014 the Government in consultation with all stakeholders undertook a comprehensive review of the then extant crop insurance schemes namely,  National Agricultural Insurance Scheme (NAIS) and  components of National Crop Insurance Programme (NCIP) i.e. Modified NAIS (MNAIS), Weather Based Crop Insurance Scheme (WBCIS) and Coconut Palm Insurance Scheme (CPIS) and started Pradhan Mantri Fasal Bima Yojana (PMFBY) and Restructured Weather Based Crop Insurance Scheme from Kharif 2016 season. CPIS continued to be implemented as a separate scheme.   Additionally, a Unified Package Insurance Scheme (UPIS) was also launched on pilot basis in selected 45 districts in the country from Kharif 2016 season.
 
State/Union Territory-wise tentative details of farmers insured/covered under PMFBY, RWBCIS including crop insurance component of UPIS, during 2016-17 can be seen in the Table below As per tentative data available claims of Rs. 4270.55 crore have arisen in Kharif 2016, out of which claims of Rs. 714.14 crores have been disbursed by the insurance companies as on date.    
 
Yesterday, at a press conference conducted by the All India Kisan Sabha, this matter was dealt with. According to the press release issued by the AKS, the claim in Kharif 2016 is below 20 % of the premium income. The premium income to the insurance companies in the year 2016-17 in the PMFBY had been 400 % more as compared to Rs. 5,700 crores during 2015-16 in the earlier crop insurance schemes.

A Memorandum has been submitted to the Union Minister for Agriculture and Farmers Welfare, Radha Mohan Singh by the AIKS. This may be read here.

The statement of the State Minister of Agriculture and Farmers Welfare has exposed the Finance Minister’s claim. Arun Jaitley has wilfully misled the entire country in the name of settlement of the arrear claims under PMFBY it has been alleged, and despite this poor disbursement, continued with a fraudulent budgetary exercise of allocating exorbitant amounts in the name of premium income to insurance companies. This is a naked appropriation of public funds by private monopolies and the money thus allocated is not reaching the farmers who have paid their premiums.

The empanelled insurance companies under PMFBY who have benefitted by this grossly improper allocation of public resources as alleged include ICICI-Lombard, HDFC-ERGO, IFFCO-Tokio , Cholamandalam  MS, Bajaj Alliance, Reliance, Future General India, TATA-AIG, SBI and Universal Sompo.  

The AIKS had expressed strong reservations when the PMFBM was launched stating that public sector insurance companies must be engaged in the task with the substantial support of central Government and State Governments. Even before this scheme was launched, widespread complaints in the insurance sector of the private companies defaulting in making payments to farmers even after they collect high premiums with the government also paying them as well as has been a common means of defrauding Indian farmers.

The Annual Union Budget has been passed by the Parliament. The Government has no authority to allocate public resources on its s whims and fancies.

The arbitrary action of the Finance minister of providing premium income to the tune of 400% more than the previous year when the number of farmers covered was increased by mere 38% only than the previous year is an act of high level corruption.  Willful allocation of public resources to facilitate profiteering for private insurance companies’ amounts to corruption, favoritism and politically motivated distribution of financial and material inducements, benefits, advantages and spoils.

State/UT-wise tentative coverage of farmers under PMFBY & RWBCIS including UPIS during Kharif and Rabi 2016-17
 

The post Is the ‘Insurance’ Scheme under the under PMFBY for Farmers Really a Scam? appeared first on SabrangIndia.