MUMBAI: The state cabinet decided to scrap its Rs 1
crop insurance
scheme, where farmers in the state paid just a nominal fee to enrol. This decision followed the discovery of major irregularities in the scheme, with 5.9 lakh bogus applicants detected in 2024-25. The state and central govt paid a premium of Rs 478.5 crore to insurance companies for these fraudulent applications.
If the bogus applicants had not been discovered, they could have received a payout of up to Rs 6,000 crore in the event of a calamity. The state initially decided to offer the Prime Minister’s Crop Insurance Scheme at the nominal fee of Rs 1 from March 2023. It will now revert to the Centre’s premium charges for farmers. Under the central scheme, farmers are charged 1.5% of the sum insured for kharif crops, 2% for rabi crops, and 5% for horticulture crops.
The cabinet has approved a revamped scheme for Kharif 2025. Sources indicate that the savings from bogus applicants and their liabilities will be redirected into capital investment in agriculture.
“In recent times, many irregularities were detected in the Rs 1 crop insurance scheme. There were lakhs of bogus applications. We did not want poor farmers to be deprived of the scheme and for insurance companies to benefit. We have cleared an improved version of the scheme,” said Chief Minister Devendra Fadnavis.
He mentioned that an SIT was investigating the irregularities in the scheme, and action would be taken after its report was released. Meanwhile, a state inquiry found 5.9 lakh bogus applications for crop insurance. The problem was exacerbated by those managing Common Service Centres (CSC) set up natio
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