Kathmandu. The Maharashtra Cabinet has decided to scrap the Rs 1 crop insurance scheme. The state government had been operating crop insurance under the grant program for agricultural crop insurance.
There, the farmers of the state had to pay a fee of Rs 1 to participate in the insurance scheme.
The decision comes after the disclosure of major irregularities in the insurance programme, in which 590,000 fake applicants were found in 2024-25. The state and central governments had to pay rs 4.78 billion as insurance premium to insurance companies for these bogus applications.
Had the fake applicants not been traced, they would have claimed compensation of up to Rs 60 billion in case of a disaster. The state of Maharashtra had initially decided to propose the Pradhan Mantri Bali Bima Yojana at a nominal fee of Re 1 from March 2023. This crop insurance program for farmers will now be available on the basis of the insurance rate implemented by the central government, the state government’s subsidy has been canceled.
According to the Times of India, under the central scheme, farmers are charged 1.5% of the sum insured for kharif crops, 2% for rabi crops and 5% for horticultural crops.
Irregularities in the scheme are being investigated, and action will be taken after its report is released. Officials said those managing common service centres set up at the national level to support the delivery of government schemes have added to the problem. More than 96 centres processed fake applications. There were instances where applicants for crop insurance belonged to other states, or the insured land was not arable land, was non-agricultural land, or even government land. The districts with the highest number of fake applicants included Beed, Satara, Parbhani and Jalgaon.
The research had recommended scrapping the Rs 1 crop insurance scheme and introducing a restructured plan for the kharif season in 2025. It had also recommended the use of additional insurance charges generated in capital investment in agriculture.
