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Analysis

24% scheme performance indicators of Delhi government ‘off track’

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Manish Sisodia

An average 23.7 per cent of output and outcome indicators for various programmes and schemes of the Delhi government departments were “off track” till December last year, analysis of a report tabled in the Delhi Assembly on Wednesday suggested.

The 23.7 per cent of indicators were off track for schemes and programmes of 14 major departments, including Health, Social Welfare and Education, for which funds were allocated in the Delhi Budget 2017-18, according to an IANS analysis of Status Report of the Outcome Budget 2017-18.

The Status Report was presented by Deputy Chief Minister Manish Sisodia.

In the report, the indicators — output and outcome of schemes and programmes — of a department were used to denote whether their schemes were on or off track. Here off track implies the performance or progress of indicators of major schemes of a particular department (till December 2017) was less than 70 per cent of the expected progress.

With 45 per cent indicators off track, the Public Works Department’s schemes performed worst, followed by the Transport Department and the Environment Department, each having 40 per cent of indicators for schemes off track.

The departments whose schemes performed well include the Directorate of Education with 89 per cent indicators of schemes on-track, followed by the Delhi Urban Shelter Improvement Board (DUSIB) with 87 per cent schemes on track and the Delhi Jal Board with 82 per cent programmes on track.

Sisodia said that idea behind the Outcome Budget was to bring a high degree of accountability and transparency in public spending.

The Outcome Budget, which coveres 34 departments of the government, was termed as the “first of its kind” in the country.

Citing an example of Mohalla Clinics, Sisodia said a regular budget tells only about the money allocated for the construction of clinics, while Outcome Budget is about the number of clinics built and the number of people expected to benefit from it.

The Outcome Budget measures each scheme using two indices: output and outcome.

The infrastructure created or services offered due to spending on a particular scheme is termed as output, whereas the number of people benefited and how is termed as outcome.

(Nikhil M. Babu can be contacted at [email protected])

Analysis

Actual sugarcane FRP hike is Rs 6, not 20: Agri activists

The government has approved a premium of Rs 2.75 per quintal for each 0.1 per cent increase in the recovery over and above 10 per cent.

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sugarcane

New Delhi, July 18 (IANS) The government’s decision on Wednesday to increase the Fair and Remunerative Price (FRP) for sugarcane for 2018-19 (October-September) season by Rs 20 to Rs 275 for a quintal comes with a rider that the new rate will be applicable only when the recovery rate is 10 per cent.

The recovery rate — of sugar from sugarcane — was 9.5 per cent when the government had fixed the FRP of Rs 255 for a quintal in 2017-18.

If the recovery rate of 9.5 per cent is considered for 2018-19, the farmers will get only Rs 261.25, which is a hike of roughly Rs 6.25, on year-on-year basis.

According to Union Food Minister Ram Vilas Paswan, 295 mills of the total 550-odd mills in the country have reported recovery rate of over 10 per cent.

“Earlier, the recovery rate was 9.5 per cent. But it is increasing now. There are 295 mills which have reported over 10 per cent recovery rate, 82 have between 9.5 and 10 per cent, while there are only 127 mills that have below 10 per cent recovery rate. As the majority is of 10 per cent, we have gone with it (while fixing the FRP),” Paswan told reporters here.

The average national recovery rate is 10.51 per cent, while it is 10.20 per cent and 11.47 per cent in major sugar producing states of Uttar Pradesh and Maharashtra, respectively, he said.

However, agriculture activists called the hike in the FRP “shameful”, saying the actual hike would be below 3 per cent.

“It’s like peanuts. It is not even 3 per cent since expenses on electricity, labour and fertlizer have gone up significantly. The hike should have been done rationally,” said V.M. Singh, president of Rashtriya Kisan Majdoor Party.

He said the remuneration at 10 per cent recovery rate in 2017-18 was Rs 268, which means the actual hike is only of Rs 7 this year.

There are about five crore sugarcane farmers in the country and about five lakh workers are directly employed in sugar mills.

The total remittance to sugarcane farmers by the millers would be over Rs 83,000 crore.

The government has approved a premium of Rs 2.75 per quintal for each 0.1 per cent increase in the recovery over and above 10 per cent.

According to the government, the production cost of sugarcane for 2018-19 is pegged at Rs 155 per quintal, so the FRP of Rs 275 per quintal would provide a return of 77.42 per cent.

The FRP is determined on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP).

Paswan said there will not be any reduction in case recovery rate goes below 9.5 per cent and farmers will get Rs 261.25 per quintal.

As per the Food Ministry’s figures, the cane arrears, which stood at Rs 14,538 crore at FRP (Rs 23,232 crore at state advisory price – SAP) on May 21, has come down to Rs 9,319 crore (Rs 17,824 at SAP) following the various steps taken by the government in May including the Rs 7,000-crore package.

“Our top priority is farmers. To ensure that millers can pay farmers their dues, we give them such facilities,” Paswan said.

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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])

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Analysis

Agusta case: Indian authorities fail to produce evidence against Michel in UAE court

The Indian government was supposed to produce evidence in the United Arab Emirates (UAE) court by May 19, 2018 against Michel. “But the government did not present any evidence,”

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Agusta Westland Chopper SCAM

New Delhi, July 17 : In a setback to efforts to extradite British national Christian Michel James — one of the alleged middlemen in the Rs 3,600 crore AgustaWestland VVIP chopper deal case — Indian authorities failed to produce any evidence before the UAE courts within the stipulated time, according to the lawyer of the accused.

The Indian government was supposed to produce evidence in the United Arab Emirates (UAE) court by May 19, 2018 against Michel. “But the government did not present any evidence,” Michel’s lawyer, Rosemary Patrizi Dos Anjos, told IANS over phone from Milan in Italy.

She said the government “does not have any evidence against” him and therefore its officials were unable to produce any, adding that there was “no evidence against Michel in Italy, Switzerland or India.”

Dos Anjos said the Indian government was given a further time of 45 days by the UAE court at its next hearing to produce evidence out of which 30 days had already expired without any movement.

Dos Anjos also said that Michel was questioned by CBI officials in Dubai a month ago. Michel is still in the UAE, according to her.

Neither the Enforcement Directorate (ED) nor the Central Bureau of Investigation (CBI) were willing to comment on the case.

In January this year, the ED had lodged a request with the UAE authorities for extraditing Michel. Both the ED and the CBI had filed chargesheets in bribery cases in Indian courts and non-bailable warrants had been issued against the accused.

Last year, a red corner notice was issued against Michel by the Interpol on a request by the CBI. RCNs were also issued against two Italians involved in the scam — Carlo Gerosa and Guido Haschke.

According to Indian investigative agencies, Michel had received at least Rs 235 crore for ensuring that the chopper contract went to AgustaWestland. He was a frequent visitor to India, having undertaken 300 trips to this country between 1997 and 2013.

ED sources said that bribes to Michel were paid through a web of companies located abroad and in India on the pretext of payment for consultancy work. He also used his Dubai-based firm Global Services FZE as a conduit for money.

In its chargesheet, the CBI had named former Indian Air Force chief S.P. Tyagi, his cousin Sanjeev Tyagi, alias Julie, the then IAF Vice Chief J.S. Gujral and advocate Gautam Khaitan as the four Indians involved in the scam. The chargesheet mentioned Khaitan as the “brain” behind the deal.

Others named in the chargesheet included Giuseppe Orsi, the former chief of Italian defence and aerospace major Finmeccanica and Bruno Spagnolini, former CEO of AgustaWestland, apart from middlemen Michel, Haschke and Gerosa.

On January 1, 2014, India cancelled the contract with Finmeccanica’s British subsidiary AgustaWestland for supplying 12 AW-101 VVIP choppers to the IAF, over alleged breach of contractual obligations and on charges of paying kickbacks amounting to Rs 423 crore.

The CBI, which registered an FIR in the case on March 12, 2013, had alleged that Tyagi and the other accused received kickbacks from AgustaWestland to help it win the contract. The FIR mentioned charges of criminal conspiracy, cheating and those under the Prevention of Corruption Act.

According to the CBI, Tyagi allegedly took bribes of several crores from AgustaWestland through the middlemen — and a complex set of companies in several countries — to change the specifications of the contract. The operational flight ceiling of the choppers was reduced from 6,000 metres, as originally proposed, to 4,500 metres and the cabin height was brought down to 1.8 metres.

The twin modifications were allegedly meant to rig the deal in favour of AgustaWestland, which eventually walked away with the order to supply the 12 choppers for the Communication Squadron of the IAF for ferrying the President, the Prime Minister and other VVIPs.

The CBI probe revealed that several payments were made to the Tyagis by Haschke, Gerosa and Michel.

Tyagi, who was IAF chief from 2004 to 2007, his cousin and Khaitan were arrested in December last year by the agency. They are now out on bail.

by By Anand Singh

(Anand Singh can be contacted at [email protected])

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