THE Union Cabinet has approved the proposal to hike the Minimum Support Price (MSP) for Kharif crops proposed in the Budget 2018 by then Finance Minister Arun Jaitley.BJP also claims the decision was also part of the 2014 Lok Sabha poll manifesto. In the Budget 2018, the government proposed to hike MSP of crops to one-and-half times of the procurement cost. Sowing season for the crops has commenced in various parts of the country. Admitting that there are some concerns over the hike in the MSP leading to higher inflation, NITI Aayog Vice Chairman said that he did not think there should be any concern on fiscal slippage. Rajiv Kumar said that one must not look at negatives of the decision. It is food and fuel that is contributing to current inflation.Siraj Hussain of ICRIER told ET that the hike in MSP may not have a direct impact on inflation unless the market prices rise as well. However, if the paddy MSP goes up, wheat MSP cannot be left behind, he told CNBC-TV18. He said that the decision is likely to impact food subsidy bill of the government. The MSP of paddy (common grade) has been increased by Rs 200 to Rs 1,750 per quintal, while that of Grade A variety by Rs 160 per quintal to Rs 1,750.
The MSP of paddy (common) was Rs 1,550 per quintal and Rs 1,590 per quintal for paddy (grade A) variety.The MSP of cotton (medium staple) has been increased to Rs 5,150 from Rs 4,020 and that of cotton (long staple) to Rs 5,450 from 4,320 per quintal.
In pulses, tur MSP has been raised to Rs 5,675 per quintal from Rs 5,450, and that of moong to Rs 6,975 per quintal from Rs 5,575. Urad MSP has been hiked to Rs 5,600 from Rs 5,400 per quintal. Hike in paddy MSP will increase the food subsidy bill by over Rs 11,000 crore based on procurement figure of the 2016-17 marketing year (October-September).The biggest increase in MSP, about 40-50%, is for coarse grains that are planted by the poorest farmers, mostly in unirrigated areas. About a quarter of India’s area under such crops is in poll bound Rajasthan, with the rest split between several states including Maharashtra, Karnataka, Uttar Pradesh, Odisha, Andhra Pradesh and Madhya Pradesh. The government said the “historic” Rs 15,000-crore move fulfilled the promise made in this year’s budget that MSPs would be determined on the the principle that the harvest should get the farmers 150% of the cost of planting and tending to the crop. Arun Jaitley, who promised higher MSP in his budget speech, said on Twitter that the provisioning already made for food subsidy was enough to absorb the cost without breaching fiscal deficit target. The cost “includes all paid-out costs such as those incurred on account of hired human labour, bullock labour/machine labour and rent paid for leased in land”, a government statement .Hailing the hike as historic, BJP’s National President Amit Shah says that the move will benefit the farming community across the country. The commitment to increase MSP of Kharif crops was made in the BJP’s 2014 election manifesto. This will resolve many problems in rural areas, particularly those related to the farming community, he told reporters.”Through this historical decision, the government has fulfilled the 70-year-old demand of farmers…There is a possibility of up to 50 per cent hike in some of the crops,” he said. Shah, on a two-day visit to Uttar Pradesh to feel the pulse of the people ahead of the crucial 2019 Lok Sabha elections, said the Modi government has been coming up with various farmer-friendly policy decisions ever since it came to power. Black marketing of urea was checked by introducing neem-coated urea.”There is no dearth of urea anywhere in the country now…Pradhan Mantri Fasal Yojna, Pradhan Mantri Sichai Yojna were brought,” the BJP leader said, citing the various schemes brought out for farmers.The Cabinet Committee on Economic Affairs (CCEA) at its meeting on Wednesday MSP for the 14 Kharif (summer-sown crops for the 2018-19 season. The decision, taken by the Union Cabinet headed by Prime Minister Narendra Modi, comes less than a year before next general election.
Prime Minister Narendra Modi today said the government has fulfilled its promise of hiking the minimum support price to 1.5 times the production cost of farming produce, asserting that the government is committed to the development of the agriculture sector.The government today hiked the minimum support price for paddy by a steep Rs 200 per quintal as it looked to fulfil its poll promise to give farmers 50 per cent more rate than their cost of production. The decision, taken by the Union Cabinet headed by Prime Minister Modi, comes less than a year before the next general elections.”I am very happy that the promise made by the government to our farmer brothers and sisters of giving minimum support price at 1.5 times the production cost has been fulfilled. There has been a historic increase in the MSP. Congratulations to all farmers,” he tweeted in Hindi.The government is committed to taking all initiatives needed for the development of the agriculture sector and farmers’ welfare, he said.”We have been taking steps in this direction and will continue to do so,” he said.