NEW DELHI: Prime Minister Narendra Modi on Wednesday said the government has fulfilled its promise of hiking the minimum support price to 1.5 times the production cost of farming produce. He said the government is committed to the development of the agriculture sector.
The government on Wednesday hiked the minimum support price for 14 kharif (summer-sown) crops for the 2018-19 season. The MSP for paddy was hiked by a steep Rs 200 per quintal as it looked to fulfil its poll promise to give farmers 50% more rate than their cost of production.
The previous highest hike in paddy MSP was Rs 170 a quintal in the 2012-13 crop year. In the last four years, the NDA government has raised the paddy MSP between Rs 50-80 per quintal.
The decision, taken by the Union Cabinet headed by Prime Minister Modi, comes less than a year before the next general elections.
“I am very happy that the promise made by the government to our farmer brothers and sisters of giving minimum support price at 1.5 times the production cost has been fulfilled. There has been a historic increase in the MSP. Congratulations to all farmers,” he tweeted in Hindi.
The government is committed to taking all initiatives needed for the development of the agriculture sector and farmers’ welfare, he said.
“We have been taking steps in this direction and will continue to do so,” he said.
The hike in minimum support prices helped the stock market post gains after trading in the red earlier the day.
The BSE Sensex rose 266.80 points to close at 35,645.40 while the Nifty gained 70 points to settle at 10,769.90.
“Guaranteed returns over the cost of production may help boost the consumer demand and benefit automobile companies,” Devansh Lakhani, a director at Lakhani Financial Services Ltd, said by phone.
Higher guaranteed returns over the cost of production may help boost incomes of farmers, a key voter base for Modi who faces a general election in early 2019. The government has announced several programsme to win the sympathy of the farming community, as about 800 million of India’s 1.3 billion population depends directly or indirectly on agriculture.
Higher support prices will boost production of oilseeds, encourage investments and help reduce India’s imports bill, the agriculture ministry said in a statement. India, the world’s largest buyer of palm oil, purchases about 70% of its edible oil needs from.