1. Minimum support price should have an expiry date, but the job is tough: Chief Economic Advisor Arvind Subramanian

Minimum support price should have an expiry date, but the job is tough: Chief Economic Advisor Arvind Subramanian

Chief Economic Advisor (CEA) Arvind Subramanian today took the line that the minimum support price on foodgrains for farmers should not continue forever and there should be an "expiry date".

By: | New Delhi | Published: February 15, 2017 10:36 PM

 

According to the CEA, one way to get rid of MSP is to neutralise incentives across crops and provide these through other means, technological research and the like. (Reuters) According to the CEA, one way to get rid of MSP is to neutralise incentives across crops and provide these through other means, technological research and the like. (Reuters)

Chief Economic Advisor (CEA) Arvind Subramanian today took the line that the minimum support price on foodgrains for farmers should not continue forever and there should be an “expiry date”. “Minimum support price (MSP) originally came into being because we had a big problem of lack of self-sufficiency in foodgrain production. It (MSP) was used as means of providing incentives to farmers. It has been successful. We no longer have the scarcity of foodgrains, cereals, etc,” Subramanian said at an event here. “But the problem with all these things are (although) many of these things work, they should not remain forever. There must be expiry date.”

Subramanian, an on-leave senior fellow at the Peterson Institute for International Economics, further said, “MSP policy not only favours cereals, but de-facto favours cereal producing regions. It widens regions disparity.”

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According to the CEA, one way to get rid of MSP is to neutralise incentives across crops and provide these through other means, technological research and the like.

He, however, admitted that it is a difficult job, given the politics in India.

“…expiry dates are very difficult,” Subramanian said.

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