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.