The Indian Express first reported on Tuesday that the MSP for common grade of paddy would be increased from RS 1,550 per quintal to Rs 1,750 from this Kharif season. (file photo)
Announcing the highest ever single-year raise in the minimum support price of paddy, the government raised the amount by Rs 200 per quintal. The decision, taken at a Union Cabinet meeting headed by Prime Minister Narendra Modi on Wednesday, will put an additional burden of Rs 12,000 crore on the exchequer.
The Indian Express first reported on Tuesday that the MSP for common grade of paddy would be increased from RS 1,550 per quintal to Rs 1,750 from this Kharif season. The government first announced in the Union Budget that it would take steps to ensure that the MSP is kept at least at one and half times of the production cost. The massive hike in MSP is one of the two (the other being Rs 5-lakh health protection cover for over 10 crore families) major schemes announced by the Modi government as it enters the last lap of its term.
The government also hiked the MSP for pulses and cotton. The MSP of cotton (medium staple) has been increased to Rs 5,150 from Rs 4,020 and that of cotton (long staple) to Rs 5,450 from 4,320 per quintal. In pulses, tur MSP has been raised to Rs 5,675 per quintal from Rs 5,450, and that of moong to Rs 6,975 per quintal from Rs 5,575. Urad MSP has been hiked to Rs 5,600 from Rs 5,400 per quintal.
The announcement of higher MSP coupled with the forecast of a normal monsoon this year could further boost foodgrains output. However, the higher support price could also fuel food inflation.