Modi hails decision on MSP as 'historic'

Modi hails decision on MSP as 'historic'

If the C2 formula was used, the procurement price for paddy would have worked out to Rs 2,226 per quintal, which is Rs 476 a quintal more than the price announced on Wednesday.

The Indian Express had reported that the previous best hike for MSP for paddy was Rs 155 per quintal in 2008-2009, in the election year of the first tenure of the UPA.

"Should the government rely on large-scale procurement of crops to implement these prices, then the fiscal cost could be around 0.3 percent of GDP (gross domestic product), which will likely be shared by the central and state governments", said A. Prasanna, chief economist at ICICI Securities Primary Dealership in Mumbai.

MSP is a price at which the government buys crops from the farmers, irrespective of its price, to protect agriculture producers from sharp fall in farm prices.

Surjewala alleged that the minimum support price announced on Wednesday would be provided to farmers only in 2019, by which time this government "would be out of power and another one would have to pay".


The latest hike will only widen the difference and hit India's farm exports, which fell to $33 billion in 2016/17 from $42.6 billion in 2013/14, said the India head of a global trading firm who declined to be named citing company policy. "We have controlled inflation in last four years and will succeed in controlling it in future as well as". For pulses, apart from moong, MSP of arhar (tur) has been raised by Rs 225 per quintal. Among oilseeds, MSP of soyabean has been increased to Rs 3,399 per quintal from Rs 3,050, while that of groundnut (shell) to Rs 4,890 per quintal from Rs 4,450, sunflower seed to Rs 5,388 per quintal from Rs 4,100, Sesamum to Rs 6,249 per quintal from 5,300 and niger seed to Rs 5,877 per quintal from Rs 4,050. Urad MSP has been hiked to Rs 5,600 from Rs 5,400 per quintal. The MSP of jowar (hybrid) has been raised by Rs 730 per quintal to Rs 2,340 for this year, while that of Maldani variety by Rs 725 per quintal to Rs 2,450, the government said. "Modi ji understood this and now farmers will get 1.5 times more MSP on their produce".

Congress President Rahul Gandhi had accused the prime minister of "finishing the farmer". "The decision of the Cabinet Committee on Economic Affairs is a historic one as it redeems the promise of the pre-determined principle of fixing the MSPs at a level of at least 150 per cent of the cost of production announced by the Union Budget for 2018-19", the release said. India is estimated to have harvested a record foodgrains production at 279.51 million tonnes in the 2017-18 crop year (July-June) on all-time high output of rice, wheat, coarse cereals and pulses.The announcement of higher MSP coupled with forecast of normal monsoon this year could further boost foodgrains output. Some of them also fear that the hike in support prices will have a recoil effect on inflation, although the government says it is too simplistic an argument.

The opposition has been painting a picture of "their choice" on the job front because there is not sufficient data available on employment, says Prime Minister Narendra Modi.

He also asserted that his government will continue to take steps for the welfare of the farming community. It asked the Modi government to "stop hoodwinking farmers with an eye on elections".

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