Bhubaneswar, July 24: Believe it or not. A cow was insured for Rs 27 lakh and the government paid Rs 3.80 lakh as premium to an insurance company under the central government-sponsored livestock insurance scheme.

A scam related to the insurance of cattle has hit the state. The vigilance has arrested a senior manager of an insurance company and a government official in this connection. Fearing imminent arrest, another employee has been absconding for the past 15 days. The insurance company has clammed up on the issue.

“We have lodged a complaint with the Insurance Regulatory Authority on how the insurance company has cheated the poor and the government. Some mechanism should be developed to ensure transparency in such matters,” a senior vigilance officer told The Telegraph. The incident took place in 2009-10 but came to light only this year.

The vigilance swung into action early this month. In order to promote the livestock sector, the Centre had introduced a scheme for livestock insurance on a pilot basis during 2005-06 in 100 districts of the country. In the first phase, the scheme was introduced in three districts of Orissa —Puri, Sambalpur and Mayurbhanj. It is currently operational in nine districts of the state.

Under the scheme, a farmer pays a certain amount to insure his cow and the same amount is paid by the state. The money that the state spends on insurance is reimbursed by the Centre.

“It is like the NREGS scheme which is entirely funded by the Centre,” said a vigilance official. On behalf of the state, Orissa Livestock Resources Development Society (OLRDS) has been entrusted to carry out the insurance programme. Each year, the OLRDS selects some insurance companies to carry out the programme throughout the state.

To avail the benefits of the programme, a farmer has to approach the veterinary surgeon in his area. Both the veterinary surgeon and insurance officials are involved in the process.

The vigilance and the OLRDS officials say the maximum amount for which a cow could be ensured was Rs 15,000. The cow is generally insured either for one year or three years. After the insurance, an ear tag is given to the cow as a proof of it being insured.

However, in this particular case in Sambalpur, there was no real cow that was insured. Those involved succeeded in fudging the papers and created a fictitious animal. This cow was insured for Rs 27 lakh against the normal sum of Rs 15,000 and the government also paid a premium of Rs 3.80 lakh. All this was done with the collusion of insurance, ORLDS and veterinary officials.

“This was a racket. A fake account was created against a cow. The details of the cow including its colour and age was mentioned in the documents. The insurance agent’s name also figured. The OLRDS also paid the insurance amount,” said an official.

When the vigilance got to know about it, the concerned insurance company returned the money to the OLRDS account. But vigilance officials said that creating a forged account was a crime in itself. “Now we have to see how many such fraud cases have actually taken place. We are almost certain that the scale is high,” said vigilance officials.

Officials maintained that by creating the forged account, the concerned insurance official managed to show good business for the insurance company and ultimately earned a good commission in the name of the insurance agent. “The officials gained both ways,” a vigilance sleuth said.

OLRDS CEO Dr Sanat Mishra admitted the corruption and said one of its staff members was absconding. “We are taking all possible steps to ensure that no corruption takes place in the future. Each year, we get between Rs 30 and Rs 40 lakh for insuring at least 30,000 cows. Last year, we managed to insure nearly 15,000 cows.”

Given the manpower constraint in the vigilance department, it was impossible to make physical verifications in each case of cow insurance. With officials and insurance agents working together, it was very difficult to detect such cases, said vigilance officials.