NEW DELHI JUNE 20: The Union Cabinet today announced a new insurance policy for those living below the poverty line (BPL) in both rural as well as urban areas which is expected to benefit over a crore families.Parliamentary Affairs Minister Pramod Mahajan said that the new scheme to be called Janashree Bima Yojana will cost the exchequer Rs 150 crore in its first year.Another important decision taken by the Cabinet Committee on Economic Affairs (CCEA) was to approve a detailed scheme for securitisation of dues of state electricity boards to the central public sector units of Ministry of Power and Department of Coal.The Cabinet also decided to convey to the BIFR/High Courts that it concurs with the recommendation of the expert group that the following six units are unviable and action needs to be taken to close down these units. These are: Mining and Allied Machinery Corporation Ltd; National Bicycle Corporation of India Ltd; Tannery and Footwear Corporation Ltd; Weighbird India Ltd; Bharat Process Mechanical Engineers Ltd; and Rehabilitation Industries Corporation Ltd. It was decided to re-open VRS for a period of two months for the remaining employees in these units and allow them an opportunity to avail of its benefits. The extra budgetary provision required for this will be Rs 200 crore.Mahajan said that the new insurance scheme will cover all persons in the age group of 18-60 years. However, only one person from a family will be eligible for insurance cover. The families will have to get organised in groups of 25 or more for the scheme. The premium payable would be Rs 200 per person. Of this amount, Rs 100 will come from the LIC's Social Security Fund and Rs 100 from the beneficiary. Mahajan said that the Central Government would like to appeal to State Governments to contribute to the scheme so that the burden of premium on BPL families is further reduced.The scheme will provide an insurance cover of Rs 20,000 for natural death and Rs 50,000 in case of death or permanent disability due to accident and Rs 25,000 in case of partial permanent disability due to accident.Mahajan said the scheme's details will be formulated by the LIC. He said that the premium of Rs 100 per family to be paid by LIC will be paid out of the Social Security Fund (SSF) of LIC which has been created due to tax concessions given to it by the Government over the years.An additional sum of Rs 150 crore will be given to this fund by the Government in the current fiscal year.Regarding the securitisation of dues of the State Electricity Boards, Mahajan said the scheme entails that the SEBs concerned issue bonds to the PSUs of Power Ministry and the Coal Department to cover the principal amount due upto December 31, 1999. These bonds will be backed by a State Government guarantee with specific allocations to be made by the State Governments in their Budgets for servicing the bonds in the event that SEBs are unable to do so.Further comfort would be provided to the bond holder by the Central Government which would use the existing authorisation to deduct up to 15 per cent of Central Plan allocations for the State in case it is unable to meet the guarantee obligation for redemption of bonds.The bonds would have tax-free status. Mahajan said that the total dues of SEBs to these organisations is to the tune of Rs 10,000 crore.
