Suman Das Sarma
LIFE Insurance Corporation of India (LIC) is in talks with ITC Ltd to market its insurance products in villages. LIC, which has a sizeable 10.43% stake in ITC, is looking at utilising ITC’s newly created physical and IT-enabled parallel procurement, marketing and distribution network, christened e-choupal, to market some of its group insurance policies specially designed for the landless, marginal farmers and others associated with agro-based trade.
ITC’s e-choupal, which is seen as a competitive alternative to mandi system of trade, has already networked around 1,020 villages, mainly in Madhya Pradesh. ITC has now set an internal target to achieve a network of 1 lakh villages across 14 states over the next 5-7 years. Currently, ITC is setting up four new choupals every day and expanding to states like Andhra Pradesh, Uttar Pradesh, Karnataka and West Bengal. Besides insurance, ITC Ltd chairman Y. C. Deveshwar sees an opportunity in utilising the e-choupal initiative to channelise other services related to credit, health, education and even entertainment.
LIC’s thrust on expanding its business to villages stems from the government’s new group insurance scheme to provide comprehensive benefits of life insurance, pension and disability benefits as well as lumpsum survival benefits to landless agricultural workers.
The Krishi Shramik Samajik Suraksha Yojana, launched by the government in conjunction with LIC last year, saw a Rs 150 crore assistance from the government. The scheme targets 50 selected blocks in 50 districts across the country, covering some 20,000 agriculture works in each block in the first phase which is scheduled to be completed by another 2-3 years time.
The scheme requires farmers to contribute Rs 365 per annum (Re1 per day) as premium, while the government puts in Rs 730 (Rs 2 per day). The government’s contribution will initially come from LIC’s Social Security Fund, which has a balance of Rs 500 crore. Of the estimated 23.5 crore workers employed in the agriculture and allied sectors, only about 4.5 crore are covered by group insurance schemes of LIC and welfare schemes of the Centre and state governments.