Hyderabad: The Life Insurance Corporation (LIC) and the state government are currently at odds over the Rythu Bima insurance premium payments. This scheme, aimed at farmers, has been facing payment issues for the past two months.
LIC, responsible for disbursing the insurance funds, declined the government’s request to pay the premium in parts. The scheme’s rules do not allow installment payments. Consequently, over 200 applications from farmers’ families are on hold.
Officials noted the government owes approximately Rs 1,300 crore for this year’s scheme renewal. Financial difficulties are likely causing the delay in a lump-sum payment. The Rythu Bima scheme offers a Rs 5 lakh insurance cover to 45 lakh farmers. Since 2018, it has benefitted over 1.10 lakh families. By the end of the 2024-25 financial year, around Rs 5,700 crore had been distributed. Previously, the government paid the full premium at once, but this year, due to financial constraints, it asked to pay in installments.
State agriculture and finance officials held several discussions with LIC to allow installment payments, but LIC has yet to agree. LIC emphasized the agreement’s terms require full payment for annual renewal. The Agriculture Department has informed the Chief Minister’s Office of LIC’s stance and is waiting for direction. The Finance Department needs to resolve this to keep the scheme running smoothly. LIC warned the scheme might end if the issue remains unresolved by the end of June, the first quarter of the fiscal year.
