India. Government delays wheat MSP decision as PMEAC, Niti oppose increase

02.07.2018

The government is delaying the decision on deciding minimum selling price on wheat as Prime Minister’s Economic Advisory Council (PMEAC) and Niti Aayog are both against increasing MSP by 50 per cent, as they feel it will fuel inflation.

Despite farmers group and union asking to raise procurement price, sources from Niti Aayog, has advised the centre against increasing MSP by 50 per cent.

“Increasing MSP at this point of time will not be a good idea. It will increase inflation and then the government has to do it for all the crops. It will certainly result in high inflation forcing RBI to go for another hike. This will not be a good move,” a senior member from Niti Aayog told TNIE.

The advise has been endorsed by many members in the Prime Minister’s Economic Advisory Council as well.

“It will be a fiscally bad move. We understand the commitment made by the prime minister but at the same time its also important to take into account the impact of general economy. Discussion is already on,” a senior member of PMEAC said.

And because of this, no consensus is being reached on final price. There is huge gap between the Commission for Agriculture Costs and Prices’s (CACP’s) MSP recommendations and those suggested by the Niti Aayog, which is causing the delay.

Meanwhile, farmers group claim that their production is around Rs.2200 per quintal so the MSP must be fixed above that.

“Farmers are asking for Rs3,300 per quintal which is much more than what government is planning to give. We are already engaging with the various farmers’ union and trying to understand their grievances and expectations. We will soon come up with a solution suitable for all,” the member from Niti Aayog added.

Given that it is election year, the Centre is not willing to offend a large voter bank.


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