It also cleared equity participation by Indian Renewable Energy Development Agency (IRDEA) in joint sector companies for development of wind energy estates.

The new scheme will cover all farmers and crops and a new specialised insurance company by the General Insurance Corporation (GIC) will be floated for the implementation of the scheme, Union minister of state for agriculture mr som pal announced after the cabinet meeting.

He said the modalities, including fixation of premium will be decided. "Farmers have to contribute to the insurance premium as the present scheme was not sustainable and financially viable", he added.

The present scheme, which was introduced by the United Front government on exprimental basis in select districts, was financed mainly by the state and centralgovernment. The limit of insurance cover was fixed at Rs 10,000 irrespective of losses incurred by the farmers, Sompal pointed out.

Som Pal said the proposed insurance company would be named as Agriculture Insurance Corporation. The losses to the proposed company will be underwritten by the government, he clarified.

Under the scheme, the farmers will directly deal with the insurance company and the government will not provide any subsidy directly, he said.

The farmers can insure the crop of any quantity and the insurance amount, in case of loss, would be assessed by the proposed company.

Later an official spokesman said the cabinet has also decided to discontinue the implementations of experimental crop insurance scheme (ecis) and to allow operation of CCIS in those districts, where implementation of ECIs proposed to be discontinue.

The proposed scheme will ensure greater satisfaction to farmers and improve financial viability of the crop insurance scheme. It will also result in greater coverage ofcrops and farmers under the crop insurance regime, the spokesman added.

He explained the CCIS insures a sum equal to the value of the loan obtained by a farmer subject to a maximum of Rs 10,000. No actual premia are charged and insurance charges are collected between one and two per cent respectively for oilseeds/pulses and foodgrains. Half of the insurance charges payable by small and marginal farmers are subsidised equally the by the central and state governments. The liability on account of the claims is shared by the central and state governments in the ratio of two is to one. The GIC functions only as the agent of the central and state government for implementing the scheme.

Meanwhile, the proposal for participation of ONGC Videsh in the Udmurt exploration-cum-development project in Russia was also approved by the cabinet.

Other approvals included setting up of a national trust for the welfare of the handicapped with one-time contribution from the Union Government for creating thecorpus.