The Union Cabinet on 19th June approved an increase in the minimum support price for all 14 kharif crops, in keeping with its policy of maintaining the MSP at at least 1.5 times the cost of production.
The support price for paddy was hiked to ₹2,300 per quintal though the government already holds a record stockpile of more than four times the required buffer. The hike is significant in the light of upcoming elections in key paddy-growing States.
Only four crops have MSP more than 50% above production costs. They are bajra (77%), arhar dal (59%), maize (54%), and black gram (52%). The highest absolute increase over the previous year has been recommended for oilseeds and pulses, with the MSP for niger seed rising ₹983 per quintal, followed by sesamum, which saw an increase of ₹632 per quintal.
To reduce the country’s dependence on import of pulses, the government has increased the MSP of arhar dal to ₹7,550 per quintal and by ₹124 for green gram beans to ₹8,682. There is an increase of ₹501 each in the MSP of medium-staple cotton to ₹7,121 and for long-staple cotton to ₹7,521 per quintal.
This year’s MSP hike is likely to result in a total financial outgo of ₹2 lakh crore, about ₹35,000 crore higher than the previous season.