Re 1 Crop Insurance Scheme
The Maharashtra government scrapped the Re 1 crop insurance scheme. Launched in 2023, this scheme intended to ease the financial burden on farmers by charging only Re 1 as a premium. However, it became mired in allegations of irregularities and a staggering rise in bogus claims. As a result, the government decided to revert to the Pradhan Mantri Fasal Bima Yojana (PMFBY), a more traditional crop insurance programme.
Background
The Re 1 crop insurance scheme was introduced to provide affordable insurance to farmers. The government subsidised the majority of the premium costs. This initiative aimed to increase insurance coverage among farmers and protect them from crop failures. However, the scheme quickly attracted a flood of applications, raising suspicions about its integrity.
Surge in Applications and Bogus Claims
In the year following its launch, applications soared from 96 lakh in 2021-22 to 2.42 crore in 2023-24. Investigations revealed that portion of these claims were fraudulent. In 2024 alone, over 5.82 lakh bogus claims were identified. Many applications involved falsified land records or were submitted for non-agricultural land.
Method of Fraudulent Claims
Fraudulent claims were often filed through Common Service Centres (CSCs). Operators of these centres allegedly used fake identities and manipulated land details without the knowledge of actual landowners. Some claims were made on government-owned land or properties belonging to religious trusts.
Government Response to Fraud
Upon discovering the extent of the fraud, the Maharashtra government initiated physical inspections and implemented stricter verification processes. An expert committee was formed to evaluate the situation and recommend actions. The committee concluded that the Re 1 scheme should be abolished and proposed returning to the original PMFBY structure.
Financial Implications of the Scheme’s Cancellation
The cancellation of the Re 1 scheme is expected to save the state between Rs 5,000 to Rs 6,000 crore annually. The government plans to allocate Rs 5,000 crore each year for agricultural infrastructure development over the next five years. This funding will support modernisation efforts in farming, including mechanisation, irrigation, and storage solutions.
Future of Crop Insurance in Maharashtra
The reintroduction of the PMFBY aims to restore trust in the crop insurance system. Enhanced verification measures have been implemented to prevent future fraud. The government’s actions focus on ensuring that genuine farmers receive the benefits intended for them, while also safeguarding public funds.
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