The CAG audit report of the Centre’s crop insurance schemes



  • GS Mains paper II and III
  • Agriculture, Agricultural insurance, MNAIS, NCIP, PMFBY.


  • The Comptroller and Auditor General of India (CAG) audit report of the Centre’s crop insurance schemes has highlighted gaps in their implementation that compromise its purpose of providing financial assistance to farmers.
  • The CAG looked into the performance of two schemes—Modified National Agricultural Insurance Scheme (MNAIS) and the National Crop Insurance Programme (NCIP) —between Kharif season of 2011 to Rabiseason of 2015-16.
  • NDA government’s ambitious Pradhan Mantri Fasal Bima Yojana, which came into force in Kharif 2016, was not been scrutinised by the CAG.

What are the problems found in MNAIS and NCIP?

  1. Delayed payments
  • The report found that Department of Agriculture, Cooperation and Farmers’ Welfare (DAC&FW) under the Ministry of Agriculture and Farmers’ Welfare released funds, but the delay took place at the state government level, it stated.
  1. Protocol not followed
  • The Agricultural Insurance Company of India Limited (AIC), the government-owned implementing agency for the schemes, “failed to exercise due diligence in verification of claims by private insurance companies before releasing funds to them.”
  1. Records missing
  • Whether the money reached the beneficiaries cannot be ensured as the database of beneficiaries was not maintained.
  1. Small farmers not covered
  • Small and marginal farmers constitute 85 per cent (12 crores) of the total farmers (14 crores) in the country. Yet, their share in the coverage did not exceed 13.32 per cent under the NAIS scheme.
  • Coverage of non-loanee farmers under the crop insurance schemes has been particularly low.
  • Non-loanee farmers are those who sign up for these schemes willingly, unlike their loanee counterparts, who are mandatorily enrolled.
  • “Percentage of non-loanee farmers opting for MNAIS ranged from 0 per cent to 5 per cent and for WBCIS ranged from 1 per cent to 10 per cent of the total insured farmers,” the report states.

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