New Delhi, July 4: In a bid fulfill its poll promise to give farmers 50 per cent more rate than their cost of production, the government on Wednesday hiked the minimum support price (MSP) for paddy by a steep Rs 200 per quintal.
MSP is a price at which the government buys crops from the farmers, irrespective of its price, to protect agriculture producers from sharp fall in farm prices.
The decision, taken by the Union Cabinet headed by Prime Narendra Modi, comes less than a year before next general election.
"This is a historic decision. Modi govt has always taken decisions in favour of farmers," BJP president Amit Shah said.
"This will bring happiness to the farmers. This is a major decision taken by PM Modi's Government. This will improve the quality of life of farmers," Uttar Pradesh Chief Minister Yogi Adityanath told ANI.
The move is in line with the announcement made by Finance Minister Arun Jaitley in Budget 2018 of MSP 1.5 times the cost of production for the crops. The increased MSP is also seen as a step towards meeting the Prime Minister Narendra Modi's promise to double farmer's income by 2022, a PTI report said.
Home Minister Rajnath Singh told the reporters that the impact of higher MSP will not be inflationary. While the government is concerned about inflation, MSP is not the only trigger for a rise in the general price level in the economy, he said.
The MSP for paddy for 2017-18 was Rs 1550 per quintal. The government had hiked the MSP for common grade paddy by Rs 80 per quintal for 2017-18.
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.
Among cereals and nutria-cereals, in terms of absolute increase, MSP of paddy (common) has been raised by Rs 200 per quintal, Jowar (hybrid) by Rs 730 per quintal and Ragi by Rs 997 per quintal.
"The highest percentage increase in MSP over the previous year is for Ragi (52.47 percent) followed by Jowar hybrid (42.94 percent). For pulses, apart from Moong, MSP of Arhar has been raised by Rs 225 per quintal yielding a return over cost by 65.36 percent and Urad by Rs 200 per quintal with a return over cost by 62.89 per cent in order to maintain inter-crop-price parity. Similarly, the MSP of Bajra has been raised by Rs 525 per quintal yielding a return of 96.97 percent over cost," the government said in a release.
OneIndia News with PTI inputs