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Farmer deaths choking exchequer, UP eyes insurance firms to ease ‘burden’

There are over 2.5 crore farmers in the state who have their names in the revenue records.

Written by Mohd Faisal Fareed | Lucknow |
February 23, 2015 5:25:34 am
farmer deaths, Farmer suicides While the claims were a few in the first year, in the last two years, it has crossed Rs 1,100 crore.

Having spent over Rs 1,100 crore from the state exchequer in the last two years to pay compensation to the kin of farmers who have committed suicide, the state government has now decided to rope in private insurance companies to streamline the scheme and share the burden.

Till now, the state revenue department was paying Rs 5 lakh to the kin of each farmer who died of unnatural reasons like lightening, accidents, electrocution and snake bite among others.

While the government had paid Rs 770 crore as compensation to the kin of deceased farmers for the current fiscal (2014-15), the figure last year was Rs 350 crore. The scheme was part of promises made by SP in the manifesto for the Assembly elections.

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“The demand continues. It is proving to be a burden on the state exchequer. So, we are now roping in private insurance companies who will pay the compensation while the state government will pay the premium for the policy,” said Board of Revenue Secretary Alok Kumar.

There are over 2.5 crore farmers in the state who have their names in the revenue records. Earlier, the compensation was only Rs 1 lakh and very few claims used to come for settlement. Chief Minister Akhilesh Yadav, soon after assuming charge, increased the compensation to Rs 5 lakh. The compensation was directly paid to the kin of the deceased on the basis of a report from the revenue department.

While the claims were a few in the first year, in the last two years, it has crossed Rs 1,100 crore. Revenue department sources said the high number of claims can also be attributed to pressure from local politicians who force officials to grant relief even if the beneficiary does not meet the requirement of the scheme.

District level officials too have conveyed to seniors that distributing such a large amount as compensation without proper verification may pose audit issues.

Keeping this in mind, the government has decided to make payments through private insurance companies. Now, once a claim is received, it will be forwarded to the company, which after proper verification, will release the payment to the beneficiary. The government will pay the annual premium to the company.

In the bid, which is in the final stage, seven companies have showed interest to run the scheme. “All queries related to the bid have been sent to the state government. We hope that from April 1, the onus of distributing compensation will be on private insurance companies,” Alok Kumar said.

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