The Maharashtra government is set to blacklist farmers found to be submitting fraudulent crop insurance claims. This action, previously reserved for intermediaries and service providers, marks a significant step in curbing the misuse of crop insurance schemes. A senior official from the state agriculture department confirmed this development.
This decision follows the state government's earlier move to scrap the Re 1 crop insurance scheme due to widespread irregularities and bogus claims. The Re 1 scheme, introduced in 2023, was a revised version of the Pradhan Mantri Fasal Bima Yojana (PMFBY) and aimed to make crop insurance virtually free for farmers. It led to a massive increase in applications, more than doubling from 1.04 crore in 2022 to 2.42 crore in 2023. However, this surge was accompanied by a rise in fraudulent claims, with over four lakh applications identified as bogus by early 2024.
The fraudulent claims included falsified land records and claims for land where no crops were sown, or for plots belonging to temples, mosques, petrol pumps, and even industrial estates under MIDC. Some claimants attempted to insure "crops" on government-owned land, including plots belonging to government departments such as the Maharashtra Industrial Development Corporation (MIDC). These bogus applications were often submitted through Common Service Centres (CSCs), with operators allegedly using fake names and land details, sometimes without the landowners' knowledge. In response, the government blocked 140 CSC IDs linked to such fraud.
The state government has now reverted to the original PMFBY scheme, under which farmers pay a premium of 2% of the sum assured for Kharif crops, 1.5% for Rabi crops, and 5% for commercial or horticultural crops. In addition to blacklisting, the government will initiate criminal action against those found guilty of filing fake claims, including farmers, CSC operators, and others. Those blacklisted will be barred from accessing all government subsidies, welfare programs, and other schemes for five years. The government resolution (GR) states that any crop insurance claim where the farmer's name does not appear on the 7/12 extract, or where bogus land records or crop data are used, will be treated as fraudulent. It also stipulates that legal action will be taken if insurance is taken on another person's land without being a sharecropper or without mutual agreement. The Revenue Department has been directed to flag such cases in official records, and strict action will be taken through the tehsildar.
Agriculture Minister Advocate Manikrao Kokate announced that the state will blacklist any insurance company found guilty of wrongdoing under its crop insurance program. The revamped crop insurance scheme will prioritize fairness and ensure that compensation is based on actual harvest results. Local elected representatives will be actively involved during crop damage surveys to build trust and accountability. The new scheme will rely on crop-cutting experiments to calculate yields accurately, guaranteeing timely payouts when farmers face losses. Maharashtra's annual spending on crop insurance had dropped from around INR 5,000– INR 6,000 crore to just INR 760 crore thanks to the new structure, freeing up about INR 5,000 crore for investment in irrigation, mulching, storage, and other agricultural infrastructure. Over the next five years, the government plans to channel nearly INR 25,000 crore toward such capital expenditure to strengthen farming.
