Maharashtra Scraps Re 1 Crop Insurance Scheme

Maharashtra Scraps Re 1 Crop Insurance Scheme

Why in the News ?

Maharashtra has discontinued its Re 1 crop insurance scheme, introduced in 2023, due to rampant fraudulent claims. The state has reverted to the Pradhan Mantri Fasal Bima Yojana (PMFBY), where premiums are calculated as a percentage of the sum assured.

Maharashtra Scraps Re 1 Crop Insurance Scheme

Background of the Re 1 Crop Insurance Scheme:

  • Launched in March 2023 by the Eknath Shinde-led Mahayuti government.
  • It was a state-modified version of PMFBY, making crop insurance virtually free for farmers.
  • Farmers paid a token Re 1, while the government bore the entire premium cost.

Fraudulent Claims and Misuse

  • Applications skyrocketed from 04 crore (2022) to 2.42 crore (2023).
  • Over 8 lakh bogus claims were detected in 2023 alone.
  • Fraud included fake land records, claims on non-agricultural or government land, and insurance taken without landowners’ knowledge.
  • Common Service Centres (CSCs) were misused to file fake applications.

Government’s Response and Reversal

  • Physical inspections and cross-verification started during 2024 kharif season.
  • A 25-member expert committee recommended scrapping the Re 1 scheme.
  • Reverted to PMFBY with premiums: 2% for kharif, 5% for rabi, 5% for cash crops.
  • 140 CSC operator IDs blocked, and five-year subsidy ban imposed on guilty applicants.

Pradhan Mantri Fasal Bima Yojana (PMFBY) – Key Points

●     Type: Central Sector Scheme for comprehensive crop insurance.

●     Objective: Protect farmers from financial losses due to natural calamities (rainfall, frost, temperature, etc.) from pre-sowing to post-harvest.

●     Coverage: Food crops (cereals, millets, pulses), oilseeds, and annual commercial/horticultural crops.

●     Eligibility: All farmers, including sharecroppers and tenant farmers, growing notified crops in notified areas.

●     Premium: 2% (Kharif), 1.5% (Rabi), 5% (commercial/horticultural crops).

●     Assessment: PMFBY uses actual crop loss assessments.

●     Comparison: RWBCIS (Weather-Based Crop Insurance Scheme) relies on weather parameter deviations (rainfall, temp, wind, etc.) instead of field-level crop assessments.