Ahead of the 2024 general election, the government plans free insurance for cows as currently, farmers pay 20-50 per cent of the premium charged by insurance companies even after capping it at 4.5 per cent of the sum insured under the National Livestock Mission (NLM), launched in 2014-15.

As only about 1 per cent of the total livestock population has been covered under the subsidised insurance plan, the move may raise the coverage to 10 per cent in the next three years.

“The plan is at a very early stage, difficult to say how it will take shape as States will also have to be consulted. Their subsidy share will increase if the scheme is modelled on the Pradhan Mantri Fasal Bima Yojana (PMFBY),” said an official source.

Last week, the Department of Animal Husbandry and Dairy (DAHD) held a stakeholders’ meeting with insurance companies and State governments, sources said. Out of 54 crore livestock population, over 19 crore are only cattle.

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Under PMFBY, farmers pay a fixed 1-2 per cent premium of the sum insured whereas the remaining premium amount subsidised by the Centre and State equally on a 50:50 ratio. However, some States quit the scheme citing the high cost of premium subsidy.

Recently, Andhra Pradesh and Punjab have joined and Telangana may rejoin the PMFBY scheme, too. Currently, under the NLM, the subsidy is restricted to five animals per beneficiary per household for all animals except for sheep, goats, pigs, and rabbits. The maximum number is 50 for sheep, goats, pigs, and rabbits for which insurance premium subsidy can be availed.

The Centre has also fixed 4.5 per cent of the sum insured as the maximum annual premium to be charged in all States except the north-east and Himalayan regions. In those hilly States, the insurers can charge 5.5 per cent.

The maximum premium is lower in case animals are insured for two years or three years. It is under deliberation if the “no premium” for beneficiaries will be limited only to BPL/SC/ST farmers or for all, sources said.

Also, the farmers belonging to below the poverty line, scheduled caste, and scheduled tribe in all States (except north-east and Himalayan regions) pay 30 per cent of the premium, while all other farmers pay half of the premium, and the remaining amount is shared by Centre and State. The farmers’ share is 20 per cent and 40 per cent in the north-east and Himalayan regions, respectively.

States and Gaushalas (cow shelters) have sought the removal of the cap on the number of animals to be insured, sources said.

“Either the government has to transfer the subsidy amount directly to the beneficiaries or make enrollment free. Currently, the premium comes to around 4 per cent per year, but with the expectation of more participation of insurance companies and higher coverage the premium rate may further come down,” said a State government official, according to whom the annual expense is about ₹30 crore of the State on cattle insurance subsidy.

“Though the discussion is now on the insurance of cattle and its subsidised premium, there could also be a possibility of a PM-Kisan type scheme for cattle farmers as those who do not have cultivable lands are not receiving the ₹6,000/year direct cash transfer from the Centre,” another source said.

Since the definition of the farmer has been extended to dairy and fishery sectors under the Kisan Credit Card scheme, it is logical to expect a PM-Kisan type fund transfer for small dairy farmers, the source said.

The government announced the PM-Kisan scheme a few months before the 2019 general election.

This March, the government lanched a digitised claim settlement module — DigiClaim — under the PMFBY which will help farmers receive the disbursed amount electronically like in the case of PM-Kisan.

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