the Union government has withheld payment of claims worth about Rs 285 crore, filed by Karnataka's farmers under the National Agricultural Insurance Scheme (nais). The authorities have cleared only a fraction of the state's crop insurance claims that amount to Rs 310 crore. Nodal implementing agency General Insurance Corporation of India (gic) has instituted a probe to ascertain the authenticity of the unprecedented flood of applications. It has indicated that claims up to Rs 70 crore might be fraudulent and would, therefore, be rejected.

The number of farmers opting for crop insurance has been rising rapidly in Karnataka ever since nais was launched in the state in 2000. It was 3.8 lakh in 2000-2001, and swelled to 6.7 lakh in the subsequent year. However, it is the disproportionate spurt in claims that has come under the scanner. "In kharif 2001, we carried out an investigation and reduced the claims amount by Rs 14 crore,' reveals a gic official.

Despite this the gap between premium paid and claims submitted increased dramatically in the 2002 kharif season. During this period 8.8 lakh farmers chose to get insurance cover, paying a premium of Rs 38.92 crore