PERFORMANCE OF NATIONAL AGRICULTURAL INSURANCE SCHEME (NAIS) IN GUJARAT

India is an agrarian country and agriculture continues to be the main stay of economy providing livelihood to 2/3rd of its population. The fortune of the majority of the population depends on the performance of the agriculture sector that faces numerous risks such as drought, flood, cyclone, pests and diseases. It is reported that just 20% of farmers in India are covered under the Centre’s crop insurance schemes that basically provide a safety net for farm loan dues in case of crop damage. The aim of this paper is to analyze the status and prospects of National Agricultural Insurance Scheme (NAIS) in India with a special focus on its performance in Gujarat. NAIS is considered as world’s largest crop insurance scheme. The study is based on secondary data and literature. The study finds that, the ratio of farmers benefited to farmers covered and claims to premium is 0.26 and 2.98 respectively from 2000-01 to 2013-14 in India. Positive trend was observed in major states in terms of number of farmers covered under the scheme since its inception. However, scheme apparently seems not to be successful in minimizing the risks of farming. About 95 million farmer households are not yet covered. So far as Gujarat is concerned, 143.3 lakh farmers covered and 49.5 lakh farmers benefited under the NAIS scheme. Overall, Rs 700 crores of claims of farmers were paid under the crop insurance scheme in the State during 2014-15. It is observed that the delay in settlements, huge administrative costs and lack of transparency are the major constraints inherent in the NAIS. It is suggested to consider Village level /Grama Panchayat to fasten the claims settlement by simplification of procedure for revival of the scheme.