Cabinet approved the hike on the MSP
The pronouncement of higher Minimum Support Price along with the forecast of normal monsoon this year is expected to boost food-grains output.
The MSPs of 14 Kharif crops were approved by the Cabinet Committee on Economic Affairs (CCEA) in its meeting held on Wednesday. As per sources, the minimum support price of paddy crops has been increased by Rs 200 to Rs 1750 per quintal, while that of Grade-A quality hiked by Rs 160/quintal to Rs1750.
The minimum support price of cotton (medium staple) has been increased to Rs5,150 from Rs4,020 and that of cotton (long staple) increased to Rs5,450 from 4,320/ quintal.
In pulses, MSP for Tur has been raised to Rs 5,675/quintal from Rs5,450, and that of Moong increased to Rs6,975 per quintal from Rs5,575. MSP for Urad has been hiked to Rs5,600 from Rs5,400 per quintal.
The new hike in paddy's MSP would increase the India's food subsidy bill by an extent of Rs 11,000 crore taking procurement figures of the 2016-17 marketing year i.e, October-Sept.
MSP is the rate at which the Food Corporation of India (FCI) buys supply from Indian farmers to distribute under the food security Act. Needless to say, Paddy is the major Kharif crop and its sowing season has already started with the arrival of southwest monsoon.
The announcement of higher MSP together with forecast of normal monsoon this year could further enhance food-grains output. However, the higher support price could also stimulate food inflation.
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