Threshold Yield to be based on long term average: A random exercise in Andhra Pradesh
& Orissa on Kharif seasons for paddy under NAIS, have shown an increase in claims by approximately 20%, if the best five years, are adopted from out of preceding seven years. Considering that the threshold yield would now be based on long term average of 10 years (with de-trending), increase in the liabilities is estimated at 15%.
Minimum indemnity limit of 70%: As a result of this, all areas presently eligible for limit, will now be eligible for 70%. Presently there are 58% areas, during Kharif,
eligible for 60% limit. Raising the level to 70%, has two implications – (i) increase infrequency of claims, and (ii) increase in quantum of claims. It is estimated that the financial liability will be increased by 8%.
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