Pointing out severe anomalies in implementation of crop insurance schemes by the government during 2011-16, the Comptroller and Auditor General of India (CAG) on Friday criticised state-owned Agriculture Insurance Company of India (AIC) for releasing Rs 3,622 crore as premium subsidy to 10 private insurers without verification. According to guidelines, the final payment by AIC to the private insurance companies was to be made on submission of final statistics with complete details of coverage during the cropping season along with certificate of the concern government. These guidelines were not followed while paying premium subsidy to private companies, CAG noted in its report tabled in Parliament. Both the central and state government had incurred an expenditure of Rs 32,606 crore towards payment of premium subsidy and claim liabilities during audited period. The CAG examined the crop insurance schemes – National Agricultural Insurance Scheme (NAIS), Modified NAIS and Weather Based Crop Insurance Scheme (WBCIS)— which was being implemented between 2011-12 to 2015-16. These schemes, currently have been replaced with new Pradhan Mantri Fasal Bima Yojan (PMFBY) from 2016 kharif season.
CAG also noted that coverage of farmers under various crops insurance schemes was low compared to the population of the farmers and coverage of non-loanee farmers was negligible. “Percentage coverage of farmers ranged from 14% to 22% for crops covered under kharif season and ranged from 8% to 12% in case of crops covered under rabi crops,” the report said. The regulator also criticised the aspects that absence of requirement of maintaining data of beneficiaries – number of farmers, crops and area covered— the central government and insurance companies were wholly dependent on the information provided by the loan disbursing branches in consolidated formats. No data of share-croppers and tenant farmers was maintained despite the fact that the guidelines provided for their coverage under the schemes, CAG has noted.
The auditor also noted that crop insurance coverage of small and marginal farmers under the schemes was low as compared to the farmers’ population. “Though as per Census 2011, the small and marginal farmers (11.76 crore) constituted 85% of the total number of farmers (13.84 crore), the coverage of small and marginal farmers under NAIS was very low and ranged between 2.09% to 13.31%.” Stating that monitoring of the schemes was “very poor” as implementing agencies did not do it effectively, the CAG noted. “Even though huge funds under the schemes were provided to private companies, there was no provision for audit by the CAG to ensure proper utilisation of funds…,” it said. There was also lack of awareness as 67% farmers surveyed during the audit were not aware of the schemes. There was no proper grievance redressal system and monitoring mechanism for speedy settlement of farmers’ complaints at the central or state government level, according to CAG.