GET Stock QuotesNews18 APP
News18 English
Powered by cricketnext logo
»
2-min read

What is MSP and How the Hike Will Impact Exchequer

The government aims to spend over Rs. 15,000 crore this year on providing a higher MSP to farmers, much in line with Arun Jaitely’s budget speech this year, which promised an increase in MSP.

News18.com

Updated:July 4, 2018, 8:18 AM IST
facebookTwittergoogleskypewhatsapp
What is MSP and How the Hike Will Impact Exchequer
Image for Representation. (Photo: Reuters/Amit Dave)
Loading...
New Delhi: According to reports, the Union Government is likely to announce a hike in the Minimum Support Price (MSP) this week. The move will reportedly be applicable to several major crops, including rice.

Setting the MSP at 150% of the total input costs has been one of the biggest promises of the Narendra Modi government. The delay in its implementation has given the opposition ammunition against the Centre. But with move, the BJP-led government seems to be preparing for the election year .

Last week, the PM had promised that the MSP would be hiked soon. “The Prime Minister announced that the Union Cabinet would approve the implementation of Minimum Support Price of 150% of the input cost, in its forthcoming meeting, for the notified crops of Kharif season 2018-19. This would ensure a significant boost to the income of farmers,” a statement from the Prime Minister’s Office read last week.

What is MSP?

MSP is essentially a form of market intervention undertaken by the government, to provide a safety net to farmers in case of a price drop. It is a price for crops that the government guarantees to the farmers at all costs and under all circumstances. This week, the government is likely to announce the MSP for only the Kharif crop since the Indian agricultural cycle is currently in the Kharif season.

According to government policy, a total of 26 commodities/crops are covered under MSP, or Fair Remunerative Price (FRP) in the case of sugarcane. This includes 7 cereals (paddy, wheat, barley, jowar, bajra, maize and ragi), 5 pulses (gram, arhar/tur, moong, urad and lentil) 8 oilseeds (groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and nigerseed), copra, De-husked coconut, raw cotton, raw jute, sugarcane and VFC tobacco.

The rise in MSP has been necessitated because of falling margins of profit for farmers, according to a report. On jowar, margins have reportedly fallen by as low as 18%. This has caused widespread farm distress, which led farmer organizations across the country to protest for the implementation of the MS Swaminathan Committee Report of 2006, which recommended a hike in MSP.

Reportedly, the government aims to spend over Rs. 15,000 crore this year on providing a higher MSP to farmers. This will be in line with Arun Jaitely’s budget speech this year, which promised a hike in MSP and also with Prime Minister Narendra Modi’s promise of doubling farmers’ incomes by 2022.
| Edited by: Sana Fazili
Read full article
Loading...
Next Story
Next Story

Also Watch

facebookTwittergoogleskypewhatsapp
Most Active
Company Price Change %Gain
Jet Airways 346.50 7.98
Yes Bank 191.00 -7.21
Reliance 1,127.40 2.79
ICICI Bank 367.55 -0.66
Indiabulls Hsg 766.20 -4.80
Company Price Change %Gain
Jet Airways 346.85 8.07
Mindtree 838.20 -0.05
Yes Bank 191.30 -7.14
HDFC 1,887.55 1.91
Info Edge 1,370.00 -0.48
Top Gainers
Company Price Change %Gain
Bharti Airtel 332.75 9.31
HCL Tech 1,022.20 3.38
Eicher Motors 24,735.00 3.30
Grasim 831.90 2.87
Reliance 1,127.40 2.79
Company Price Change %Gain
Bharti Airtel 333.60 9.81
Reliance 1,127.50 2.79
HDFC 1,887.55 1.91
SBI 290.30 1.75
Hero Motocorp 2,954.55 1.28
Top Losers
Company Price Change %Gain
Yes Bank 191.00 -7.21
Indiabulls Hsg 766.20 -4.80
JSW Steel 335.10 -2.76
Tata Steel 574.10 -2.59
IOC 143.35 -2.25
Company Price Change %Gain
Yes Bank 191.30 -7.14
Tata Steel 574.10 -2.47
Maruti Suzuki 7,332.05 -2.02
ONGC 156.55 -1.48
Axis Bank 618.30 -1.17

Live TV

Loading...
Loading...