The scheme, covering around 3.5 lakh employees, was rolled out on September 20.
Jammu and Kashmir Governor Satya Pal Malik has scrapped a medical insurance scheme for government employees and their families a month after it was rolled out, citing fraud. Reliance General Insurance Company of Anil Ambani was chosen to run the scheme and the opposition parties have demanded a thorough probe into the selection.
The Governor said the state government employees wanted the contract to be cancelled as they found it to be "fraudulent" and he too drew the same conclusion after going through the details. "I myself went through files, and when I came to the conclusion that the contract was awarded wrongly, I cancelled it," Mr Malik said, adding whoever was "involved in it" would be punished.
The state administration maintained that due process was followed in awarding the contract. There was no response from the Reliance General Insurance Company regarding the cancellation of the contract.
The scheme, covering around 3.5 lakh employees, was rolled out on September 20. It involved insurance cover of Rs 6 lakh to each employee and up to 5 lakh for their family members. Each employee had to pay a premium of Rs 8,777 per year.
The opposition and the some state employees' organisations had been alleging that the tendering process for the contract was changed midway to favour a particular company.
Fraud by whom? The guilty must be exposed and punished. Just cancelling the contract is not enough,'' tweeted former chief minister and National Conference leader Omar Abdullah.
His party spokesperson Tanveer Sadiq said the turnover of the bidders was revised from Rs 5,000 crore to Rs 3,000 crore to benefit a particular company. "Everybody responsible for this should be exposed and punished," he said.
Rafi Ahmad Mir, the spokesman of Mehbooba Mufti's PDP – which till June ruled the state in alliance with the BJP — said "it needs to be probed" who was playing "with the lives of people".
"What criterion was followed to select the particular company is not known to anybody, which has raised serious doubts over the scheme," said senior CPM leader Mohammed Yousuf Tarigami.