New Delhi, January 13

The cabinet has cleared the launch of the country’s first major crop damage insurance scheme from the next fiscal year, a move that would further strain government finances but help Prime Minister Narendra Modi to woo rural voters ahead of key elections.

Stung by criticism of ignoring concerns of rural India where over two-thirds of country’s 1.25 billion people live, the government today fielded as many as three cabinet ministers to underline importance of the scheme whose budget will more than double in three years.

Modi is trying to placate rural voters after the impact of unseasonal rains and two straight years of drought on agriculture dented his popularity and contributed to a humiliating loss for ruling Bharatiya Janata Party in elections late last year in largely rural state of Bihar.

Further elections are due in the states of West Bengal, Kerala, Tamil Nadu and Assam this year.

“It is a historic day,” Modi tweeted after the scheme was announced by the ministers of agriculture, home and parliamentary affairs. “I believe PM’s crop insurance scheme will bring about a huge change in lives of farmers.”

Several debt-laden farmers committed suicide last year, and Agriculture Minister Radha Mohan Singh has said that delays in clearing payouts for crop losses were the ‘biggest reason for destroying farm families’.

The government would now ensure faster settlements by increasing the use of technology, including smartphones to capture crop data.

It would also reduce premiums to be paid by farmers to two per cent for summer-sown crops and 1.5 per cent for winter crops.

The current premium share for farmers can go as high as 40 per cent.

New Delhi will more than double the budget for crop insurance scheme to INR 77.50 billion in the fiscal year beginning April 2018.