The Life Insurance Corporation (LIC) and the state government of Hyderabad are in a dispute over the payment of insurance premiums for the Rythu Bima scheme, a life insurance program for farmers. The scheme provides a life insurance cover of Rs 5 lakh to 45 lakh farmers, and the state government is responsible for paying the premium. However, due to financial constraints, the government has requested LIC to allow payment in installments, which the insurance company has rejected.
The LIC has cited the agreement between the state government and the insurance company, which states that the entire premium amount must be paid at one time to renew the scheme every year. As a result, over 200 applications from farmers’ families seeking insurance benefits are pending, and the scheme’s renewal for this year is uncertain. The government was supposed to pay around Rs 1,300 crore for the renewal of the scheme, which is a significant burden.
The state government has held several meetings with LIC officials to try to convince them to accept the premium payment in installments, but so far, the insurance company has not given a positive response. The Agriculture Department has informed the Chief Minister’s Office about LIC’s reluctance to renew the scheme, and the issue is awaiting a response. If the state government fails to resolve the issue before the end of the first quarter of this financial year in June, the LIC has warned that the insurance scheme can be scrapped.
The Rythu Bima scheme has been successful since its launch in 2018, with over 1.10 lakh families of farmers availing of the scheme benefits, and the implementing agency distributing around Rs 5,700 crore till the end of the financial year 2024-25. The scheme’s continuation is crucial for the welfare of farmers in the state, and the government must address the issue immediately to avoid any disruption. The Finance Department must find a solution to pay the premium amount to ensure the scheme’s renewal and maintain the trust of farmers in the government’s initiatives.