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Analysis

‘Crop insurance scheme benefits companies more than farmers’

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farmers crisis

New Delhi, July 18 : It is yet to be seen how much the Modi government’s ambitious crop insurance scheme has benefitted farmers, but one section that has definitely hit the jackpot is the insurance industry, which collectively earned around 85 per cent profit, excluding expenditure on administrative purposes and reinsurance, during the 2017-18 kharif season, government data shows.

According to the Agriculture Ministry’s data, all 17 insurance companies — five public and 12 private — empanelled under the Pradhan Mantri Fasal Bima Yojana (PMFBY) registered a margin of Rs 15,029 crore as they paid out claims of a mere Rs 2,767 crore against the Rs 17,796 crore collected as premium.

PMFBY is exempted from Service Tax (now a part of GST), as per its operational guidelines.

Similarly, these companies have earned over 96 per cent profit under another crop insurance scheme — Restructured Weather-Based Insurance Scheme (RWBCIS) — during kharif 2017-18 as they received Rs 1,694 crore as premium and paid out just Rs 69.93 crore as claim compensation, figures accessed by the IANS show.

During the last kharif (2016-17) season, the insurance companies had earned 44 per cent profit as they received Rs 15,735 crore while they incurred expenditure of Rs 8,862 crore in claims made by the farmers.

According to the Agriculture Insurance Company of India (AICI), the nodal agency for these schemes, the business has been “profitable” since they were launched in February 2016.

“A good monsoon has certainly helped increase food production, which we think has led to such profits,” said a senior AICI official, who wished not to be named.

Earlier, under previous insurance schemes, the AICI had paid as much as Rs 2.80 as compensation claim against the premium of Rs 1, causing it to incur significant losses, said the official.

The government and insurance companies cite a “good monsoon” and “higher production” for the low claims. But there were cases of extreme climatic conditions, drought like situations, and floods at many places, said Chandra Bhushan, deputy director of the non-profit Centre for Science and Environment (CSE).

“You cannot call it a good year to back low pay-outs since issues such as extreme climate and floods have been reported at many places. There are issues with assessment, payment dispersal along with technology issues. If claims are so low like 15 per cent (of premium collected), the country’s agriculture has no problem. There is no need to have any such crop insurance scheme then,” he added.

Interestingly, these insurance companies are bound to safeguard their interests by taking reinsurance cover and the government is to provide protection to them in case premium to claims ratio exceeds 1:3.5 or the percentage of claims to “Sum Insured” exceeds 35 per cent, whichever is higher.

Farm activists find a “big lacuna” in the design of the PMFBY, saying it has been more beneficial to the insurer than farmers.

Kavitha Kuruganti of non-profit Alliance for Sustainable & Holistic Agriculture (ASHA) said Crop Cutting Experiment (CCE), which is done to obtain accurate estimates of crop output, is conducted in a unscientific manner.

“The samples collected for CCE are not scientific. The consequences are that the farmers are not benefitted but the companies,” she said.

In addition, claims made by farmers for crop loss have found not to be settled by the insurance companies on time.

“Claims are not provided in time. Also, banks do not send data (to companies) in time. There are several lacunae with the implementation. But the big laucuna is with the design of the product,” Kuruganti said.

As many as 3,31,96,239 farmers bought crop insurance under PMFBY to insure 3,34,73,346 hectares of land during kharif 2017-18.

However, claims of only Rs 2,767 crore were paid against the reported claims of Rs 5,052 crore.

Interestingly, the government could not yet complete claims settlement for winter crops cultivated during rabi 2017-18 when the process “ideally” should get over in “a month” after the harvesting.

According to the ministry data, claims worth Rs 14 crore were made under PMFBY for rabi 2017-18 and the payout was Rs 12.1 crore till early June against the premium of Rs 5,128 crore collected by the insurers.

A top official told IANS that the ministry was “aware” of the “big profits” and delays in settling claims.

“Although companies are earning more profit now, there are chances that they may incur losses in future if significant crop losses are reported. Also, we have asked the companies and states to speed up the settlement process by adopting new technology,” said the official, who requested anonymity.

Under the scheme, farmers have to pay just 2 per cent of total premium in case of kharif, 1.5 per cent for rabi and 5 per cent for horticulture and remaining premium is shared equally by the Centre and the states.

However, there is no cap on the actuarial premium rates charged by the insurance companies, which Kuruganti said was “very high” for some crops.

(Saurabh Katkurwar can ne contacted at [email protected])

Analysis

The US presidential elections and future of India-US relations

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Donald Trump Joe Biden

As the coronavirus pandemic dominates global news in the United States, progress toward the next presidential election scheduled to be held on November 3 moves slowly forward. President Donald Trump had no real opposition in the Republican party and is running for re-election. And it has now become apparent that former Vice President Joe Biden will be his opponent as the Democratic candidate for president.

What would a Trump victory bode for the future of US-India relations? What would a Biden victory bode? Let me answer each of those questions in turn.

Given the love fests of Prime Minister Narendra Modi’s ‘Howdy Modi’ event in Houston, Texas, in which Trump participated in September of 2019, and Trump’s ‘Namaste Trump’ event hosted by Modi in India in February of this year, it might be assumed that the future for US-India relations is a splendid one. This would be an incorrect assumption.

Both of these events were more symbolic than substantive. Trump’s participation in them undoubtedly helped to persuade some — perhaps many — Indian American Modi supporters who voted for Hillary Clinton in 2016 to cast their ballots for Trump in 2020. Trump’s campaign team took steps to ensure this by holding an event at his Mar-a-Lago resort in which a group of prominent Indian Americans announced their plans to work for his re-election and to mobilize Indian Americans on his behalf.

To understand the future potential of India’s relations with the US. with Trump as president, however, it is necessary to look beyond these political moves and to examine the present state of those relations and Trump’s personal style.

In a word, the best way to characterize the current relations between the US and India is “functional”. The relationship was relatively good for the first two years of Trump’s presidency. In fact, near the end of 2018, Alice Wells, the Acting Assistant Secretary of State for South and Central Asia, was quoted in the media s saying: “This has been a landmark year for US-India ties as we build out stronger relationships across the board.”

Then, in 2019, the relations went off the track in the first half of the year after the US and India got into a tit-for-tat tariff war after the US terminated India’s Generalized System of Preferences which allowed India to send certain goods to the US duty-free. There have been continuing efforts to structure a “modest” trade deal since then. It was thought there might be some type of deal done in September of 2019 while Modi was in the US by year’s end, and then during Trump’s India visit. But, as of today, there is still no deal.

This inability to get any meaningful trade agreement in place speaks volumes about India’s potential future relations with India with Trump as president. So, too does Trump’s style.

Trump’s campaign slogans this time around are “Keep America Great” and “Promises Made, Promises Kept.” Trump is not a policy wonk and most of his effort will go toward “America First”. This involves making the US more isolated by withdrawing from international agreements, restructuring trade agreements, emphasizing building walls to stop immigrants at the border, using tariffs to block trade with countries who are taking away American jobs, and confronting businesses who are allegedlly stealing American trade secrets.

This perspective suggests what India can expect for its relations with the US if it has to deal with Trump for a second term as president. The relations will stay functional at best. As I have said before, that’s because the words partnership, cooperation and collaboration are not in Trump’s vocabulary. Nationalism, isolationism and protectionism are.

Joe Biden stands in stark contrast to President Trump both professionally and personally. Biden is a strategic thinker and doer with a solid eight-year track record of leadership experience as Vice-President in forging alliances that have made a difference around the world and he has also been a long-standing friend of India.

He was chairman of the Senate Foreign Relations Committee and a leading advocate for the Congressional passage of the Indo-US civic nuclear deal in 2005. At a dinner convened 10 years later in 2015 by the Confederation of Indian Industry and the Carnegie Endowment for International Peace, Vice President Biden discussed the tremendous joint progress that had been made by the two countries in the past and declared “We are on the cusp of a sea change decade.”

Early in his campaign for the Democratic nomination for president in July of 2019, in laying out his foreign policy vision, Biden stated that the US had to reach out to India and other Asian partners to strengthen ties with them. The items on Biden’s foreign policy agenda for strengthening which are of importance for India include climate change, nuclear proliferation and cyberwarfare.

During his vice presidency, Biden worked side by side with President Barack Obama to do things that would contribute to achieving Obama’s vision stated in 2010 of India and America being “indispensable partners in meeting the challenges of our time.” In 2020, those challenges are even greater than they were a decade ago.

That is why it is so essential that India and the US develop a strategic relationship that enables them to become those indispensable partners. That can happen if Biden assumes the presidency on January 20, 2021. It cannot happen if Donald Trump remains as president for a second term.

The results of this upcoming election in the US matter greatly for the future of the United States. They matter greatly for the future of India-US relations as well. Time and the American electorate will tell what that future will be.

(Frank F. Islam is an entrepreneur, civic and thought leader based in Washington DC. The views expressed here are personal)

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Analysis

Covid-19 toll across world crosses 35,000

The COVID-19 is affecting 132 countries and territories around the world.

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Patients infected with the novel coronavirus

New Delhi, March 30 : The death toll around the world due to coronavirus crossed 35,000 on Monday evening, with Italy heading the list of 35,097 deaths with 10,779, while the number of cumulative cases rose to 737,929, with US leading with 143,055 of them, as per data from the Johns Hopkins University’s Coronavirus Resource Centre.

Spain was second with 7,340 deaths, followed by China with 3,308 (3,186 of them in Hubei where the outbreak was first recorded), Iran with 2,757 deaths, France with 2,606 deaths, the US with 2,513 (776 of them in New York) and the UK with1,228 deaths.

In number of cases, Italy was second with 97,689, followed by Spain with 85,195, China with 82,198, Germany with 62,435, Iran with 41,495 and France with 40,747.

Meanwhile, 156,652 people around the world had recovered, with nearly half of them (75,923) in China, followed by 16,780 in Spain, 13,911 in Iran and 13,030 in Italy.

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Analysis

45% of Indians do not back up their data, files: Survey

The survey was conducted among 728 Avast and AVG users between February 20-March 25.

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Data Privacy

New Delhi, March 30 : Nearly half of Indians do not back up because they think their data or files are not important enough and most of those who back up their data, do it once a month, a survey said on Monday.

Other reasons cited by the respondents for not backing up their data included not knowing how to do it, not having time and forgetting about it, according to the survey by cybersecurity company Avast.

“It could be that many aren’t aware they are backing up, as it could be happening automatically, in the background, however, others really might not be backing up at all, thinking it is not worth it,” Luis Corrons, Security Evangelist at Avast, said in a statement.

“Losing personal documents, photos and videos can be a painful experience and it’s not until this happens that they realize how valuable it actually is,” Corrons added.

Of those who do back up their data, nearly 42 per cent Indians back up to a cloud storage, 36 42 per cent back up their data to an external hard drive, 23 42 per cent back up to a USB or flash disk, 18 42 per cent back up their phone to their PC, and 10 42 per cent back up to a network storage drive, the results showed.

Corrons recommended to back up data to two different locations, like the cloud, and a physical storage, like an external hard drive.

When it comes to iPhone and Android phone owners, the percentage that backs up is nearly the same, 69 per cent and 70 per cent respectively.

The percentage of smartphone owners that don’t know how to back up their data does not vary much between iPhone and Android owners, with 13 per cent and 17 per cent claiming not knowing how to, respectively, the study revealed.

Data loss can be caused by users accidentally deleting their data themselves, hardware damage and failure, as well as malware, causing valuable data such as photos, videos, documents, and messages to be lost forever.

Ransomware and other malware, such as wipers, can either encrypt or completely destroy files, and there is no guarantee that files can be decrypted if a ransom is paid.

The survey was conducted among 728 Avast and AVG users between February 20-March 25.

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