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

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