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

As per the new decision, farmers will now pay premiums worth 2 per cent for Kharif, 1.5 per cent for Rabi and 5 per cent for cash crops of the sum assured

crop insuranceThe 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 (File)

Facing allegations of irregularities, bogus claims and financial burden, the Maharashtra government on Tuesday scrapped the Re 1 crop insurance scheme launched two years ago. It will now be replaced by the old scheme: PM Crop Insurance Scheme.

As per the new decision, farmers will now pay premiums worth 2 per cent for Kharif, 1.5 per cent for Rabi and 5 per cent for cash crops of the sum assured.

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.

Alok Deshpande is a Special Correspondent with The Indian Express' Mumbai bureau, recognized for his focused and authoritative reporting on governance, politics, and the socio-economic dynamics of Maharashtra's hinterlands. His unique academic background in Geology and early work in the water sector provides a specialized layer of Expertise to his reporting on resource and environmental issues. Expertise Current Role: Special Correspondent, The Indian Express, Mumbai. Core Authority: Alok provides detailed coverage of Maharashtra politics and governance, with a particular emphasis on how policies and power struggles affect the rural and semi-urban areas (the 'hinterlands'). Key Coverage Areas: His reports frequently focus on high-stakes administrative and political topics, including: State Assembly Proceedings: In-depth reporting on the Legislative Assembly, covering ministerial statements, legislative debates, and inter-party conflict within the ruling Mahayuti alliance. Policy & Finance: Coverage of state finances, including supplementary budget demands, fiscal deficits, and major government schemes (e.g., Jal Jeevan Mission, Ladki Bahin Yojana). Rural and Social Issues: Reports on critical health issues (e.g., child deaths in districts), human-animal conflict (leopard attacks, stray dogs), and agrarian concerns (e.g., farmer suicides). Local and Urban Governance: Covers major announcements regarding urban development (e.g., BMC's OC amnesty scheme, pagdi system push) and local body elections, including political defections and alliance splits. Unique Credentials & Trustworthiness Academic Specialization: Holds a Post-graduate degree in Geology. This background gives him a foundational understanding of natural resources, which directly informs his reporting on environment, water, and infrastructure projects. Early Professional Experience: His shift to journalism came after working with an NGO focused on the water sector. This practical experience strengthens his Expertise in critical areas like water management and rural development, as evidenced by his reporting on the Jal Jeevan Mission. Journalism Training: An alumnus of the prestigious Asian College of Journalism (ACJ), Chennai, confirming his formal training and commitment to rigorous journalistic standards. Alok Deshpande's rare combination of scientific education, non-profit sector experience, and deep political reporting makes him a highly trusted and authoritative voice on the governance and ground realities of Maharashtra. He tweets @alokdesh ... Read More

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