Business Standard

Raising minimum support price may pose inflation challenge for govt

The ruling party, though, is all set to cash in on the MSP announcement clubbed with the other pro-farmer measures of the government

The use of procurement as an instrument to enforce MSP is usually costly and costlier for crops where a ready avenue for disposal does not exist
Premium

The use of procurement as an instrument to enforce MSP is usually costly and costlier for crops where a ready avenue for disposal does not exist

Sanjeeb MukherjeeArchis Mohan New Delhi
With the minimum support price (MSP) for kharif crops for the 2018-19 season set to be announced next week, the big question among policymakers and experts is its potential impact on inflation.

The Centre has decided to fix MSP at 1.5 times of the cost of production from this year.

The cost in this case will be A2+FL, which broadly includes all paid-out input costs plus own and family labour. Though this is much less than the comprehensive cost, given that crude oil prices have been rising, not all are convinced about its non-inflationary character.

“So far the NDA government

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Jun 30 2018 | 7:04 AM IST

Explore News

To read the full story, subscribe to BS Premium now, at just Rs 249/ month.

Key stories on business-standard.com are available only to BS Premium subscribers.

Register to read more on Business-Standard.com