New Delhi: The government will have to spend Rs 4,000 crore more on the revamped crop insurance scheme after making it voluntary from the upcoming kharif season.
The annual premium is likely to increase by 2% from existing 12.5% as number of participating farmers is likely to fall 30%.
Over the last three crop seasons since launch, the average number of participating farmers had been 37.5 million with 58% of them having crop loan.
“Insurance cover is set to become costly with government’s share in total premium likely to go up by Rs 4,000 crore – Centre and states contributing equally. Since launch of this scheme in 2016, government pays annual premium in the range of Rs 24,000-25,000 crore. In the ensuing crop season, government may have to pay `28,000-30,000 crore with lower base of farmers,” said an official.
The forecast of normal monsoon would also discourage farmers from enrolling in crop insurance scheme.
“Now farmers in low risk zones like western Uttar Pradesh, Assam, Gujarat and parts of Madhya Pradesh will withdraw from this scheme,” the official said.