With the Narendra Modi government planning to increase the Minimum Support Price (MSP) one and half times of the farmers' produce may push farmers' income up by 24%, according to an estimate by NITI Aayog.
With the Narendra Modi government planning to increase the Minimum Support Price (MSP) one and half times of the farmers’ produce, it may push farmers’ income up by 24%, according to an estimate by NITI Aayog. The price of farmers harvest on the announcement hike in the MSP could increase about 15%, which will lead to a hike in farmers’ income by 24%, TOI reported.
The government think-tank has proposed three option to ensure that farmers get the MSP benefit, for which the government will have to earmark between Rs 47,000 crore and Rs 1.11 lakh crore, the English daily reported. NITI Aayog, however, has also cautioned that it will have an impact on inflation.
Earlier this month, NITI Aayog the three concepts with the government. The first option is Market Assurance Scheme; second is Market Assurance Scheme; third is private procurement and stockist scheme. NITI Aayog said that private procurement and stockist scheme provides great promise as it reduces the fiscal implications for the government, involves private entities as partners in agriculture marketing, and improves the competition in the market.
The government after the announcement of hike in the MSP told the Rajya Sabha that it will be based on the A2+FL costs, which not only takes into account actual cost but also the imputed value of family labour in the production of a crop. While presenting the Union Budget 2018, Arun Jaitley had said that the support price for the upcoming kharif crops like paddy could see up to 47% rise after the hike in the MSP. Niti Aayog member Ramesh Chand had then estimated an increase in support price between 8% and 47% depending on crops and their cost of production this year.