Misdirected Insurance

When fanfare far exceeds actual performance, we have the kind of outcome that the Mukhya Mantrir Jiban Bima Asoni has had. There is no denying that this life insurance scheme for the rural sector was well-intended, but in our State we have the tendency to make everything look like a populist gimmick due to the total lack of careful planning before such plans are launched. For any life insurance scheme for the rural sector to be sustained over the years, there was need to work out the modalities of implementing the scheme in great detail and to make the appropriate budget allocations. In the case of this particular scheme, the State Government had allocated only Rs 5 crore in the budget for 2008-09. In the budget for 2009-10 the allocation made was Rs 6 crore. And yet, rather mysteriously, the State Government signed an agreement of Rs 25 crore with ICICI-Lombard and even paid the company about Rs 16 crore as advance. What kind of financial planning do we have when the government that earmarks only Rs 5 crore and Rs 6 crore in two successive budgets, makes an advance payment of Rs 16 crore as advance to a private insurance company at one shot without the budget allocation for the amount? Can anyone be blamed for charging the government of having made an unplanned and motivated payment to a private insurance company so that someone could derive the benefit of a hefty commission under the table? Was the government not asking for trouble? SOURCE: THE SENTINEL