Maharashtra govt scraps Re 1 crop insurance; switches back to old system

The Re 1 crop insurance scheme was launched in 2023 by the Mahayuti government, under which farmers were to pay only Re 1 as premium on their part while the rest was borne by the government. This led to a massive increase in the number of applicants compared to previous years and over 5.82 lakh bogus claims in 2024-25.

Last year, the government (both state and Centre share) paid Rs 7,539 crore (Rs 3,060 crore by the Centre and Rs 4,479 crore by the state) as premium for Kharif, and Rs 1,684 crore (Rs 643 crore by the Centre and Rs 1,040 crore by the state) for Rabi season.

According to data, in 2021-22, around 96 lakh applications had come for crop insurance while in 2022-23 the number was 1.04 crore. However, after the launch of the Re 1 crop insurance scheme, the number of applicants rose to 2.42 crore in 2023-24 and 2.11 crore in year 2024-25.

“The double jump of applicants itself was an indication that something was wrong. Investigations found 3.80 lakh bogus claims in 2023-24 and 5.82 lakh bogus claims in 2024-25. The number could be bigger as a number of vacant lands too were registered for crop insurance. Therefore, it was decided to cancel the Re 1 scheme altogether,” said an official from the agriculture department. According to an estimate, the state may save up to Rs 5,000 to Rs 6,000 crore annually after scrapping the existing scheme.

The Cabinet also cleared a proposal to allot Rs 5,000 crore annually for agriculture infrastructure development fund for the next five years, totalling Rs 25,000 crore. Under this, the state government will subsidise farmers’ investments for agriculture mechanisation, modern technology, micro irrigation, farm pond, cold storage, agro processing, value chain, infrastructure development for animal husbandry and horticulture etc.