New Delhi, July 4 (IANS) With less than a year to go for the general elections, the BJP-led NDA government on Wednesday approved a steep increase in the Minimum Support Price (MSP) for summer-sown crops in response to countrywide farm distress despite good monsoons and subsequent bumper output for the past two years.
The Cabinet Committee on Economic Affairs approved higher MSP for 14 notified kharif crops for 2018-19 -- profit over the input cost for most crops including paddy to be over 50 per cent, about 66 per cent for arhar (red gram) and urad, and 97 per cent for ragi.
Addressing the media here, Union Home Minister Rajnath Singh called it a "historic" decision, saying it would send a positive message to farmers and boost their confidence.
"No government in the history of the independent India has given such a hike in the MSP. It is not an ordinary decision. It will provide relief to farmers, who are in despair," Rajnath Singh said.
Based on the input cost fixed by price advisory body Commission of Agricultural Costs and Production (CACP), which was Rs 1,166 per quintal, the government has increased the MSP for paddy by Rs 200 (50.09 per cent) to Rs 1,750 per quintal, he said.
The MSP for 'Grade A' paddy has been increased by Rs 180 (51.80 per cent) to Rs 1,770 per quintal.
The year-on-year hike in the MSP for most other kharif crops this year is quite steeper than what was announced on annual basis in the last three years.
The government has decided 50.09 per cent of profit on the input cost of Rs 1,619 per quintal of jowar (hybrid) thus fixing MSP at Rs 2,340 per quintal. For jowar (Maladandi), the MSP would be Rs 2,450 per quintal.
The MSP for bajra would be Rs 1,950 per quintal -- a profit of about 97 per cent as the input cost calculated by the CACP was Rs 990 per quintal.
Rajnath Singh said the MSP would be based on 'A2+FL' - one of the input cost concepts recommended by the Swaminathan Commission - and the Central government would spend an additional Rs 15,000 crore on account of the higher MSP.
For maize, the government has fixed MSP at Rs 1,700 per quintal -- 50.31 per cent profit over the input cost of Rs 1,131 per quintal
Arhar (tur) and urad saw among steepest price increase of 65.36 per cent and 62.89 per cent respectively.
The MSP for arhar is fixed at Rs 5,675 per quintal over the input cost of Rs 3,432 per quintal and for urad at Rs 5,600 per quintal over input cost Rs 3,438 per quintal.
The government has hiked the MSP for ragi by 50 per cent to Rs 2,897 per quintal based on the input cost of Rs 1,931 per quintal.
In case of cotton, the MSP has been raised to Rs 5,150 per quintal for medium staple (50 per cent profit) and to Rs 5,450 per quintal for long staple (58.75 per cent profit).
The government has hiked the MSP by 50 per cent for groundnut at Rs 4,890 per quintal, for moong at 6,975 per quintal, for sunflower Rs 5,388 per quintal, for soybean at Rs 3,399 per quintal, for sesame at Rs 6,249 per quintal and for Niger seed at Rs 5,877 per quintal.
The minister also said the higher MSP will increase farmers' income and purchasing capacity thus having a "positive impact on wider economic activity".
Reacting to a query on possible impact of the decision on inflation, he said: "It is not right to say that inflation will rise. We are concerned about it. We have keep inflation in control in last four years and we will ensure it in future as well."
On Tuesday, Union Food and Public Distribution Minister Ram Vilas Paswan said the government as ready to procure each grain of food grain at higher MSP.
