Jaitley's cost price-based MSP formula to cost Rs 115 bn for 4 crops: SBI

The wheat MSP of 2016-17 season which is around Rs 1,625 per quintal was used for the calculation by the SBI Chief Economist

Amid the debate on whether procurement of grains under price deficiency scheme with the newly announced formula of 1.5 times over the A2+FL cost will balloon public expenditure, a report by State Bank of India (SBI) presents a contrarian view.

The report prepared by its Chief Group Economic Advisor Soumya Kanti Ghosh shows that combined cost if a price deficiency based market intervention scheme is implemented for wheat, paddy, bajra and maize on a conservative basis would be less than Rs 115 billion.

This calculation is based on the 2016-17 MSPs which in case of wheat alone was 104 per