Even as the government on Friday agreed to pay interest on delayed disbursement of funds toward agricultural debt waiver scheme, farm insurance claims are stuck as states are not putting up their contributions.
The government has received representations on delayed or no payment of insurance claims under the National Agriculture Insurance Scheme, which is implemented by Agricultural Insurance Corporation.
As of September 15, 2008, total outstanding claims under the scheme amounted to Rs 926.79 crore, of which AIC was to contribute Rs.180.91 crore, while the share of Centre and states was Rs 372.93 crore each.
?The Agricultural Insurance Corporation?s share and the Government of India?s share are ready. However, in the absence of the contribution(s) of the state government(s), it has not been possible to disburse the amounts against the outstanding claims,? an official press release stated.
In this fiscal budget, the Centre allocated Rs 644 crore for the scheme, which provides subsidy to farmers on the payment of premium.
NAIS was introduced by the government from Rabi 1999-2000 to provide means of financial support to farmers in the event of crop failure as a result of drought, cyclone and due to pest and diseases, to enable them avail credit after a crop failure, and encourage improved technology in agriculture.
The scheme is compulsory for all farmers who have taken loans from financial institutions.