The the JD(S)-Congress government in Karnataka on Thursday had announced a farm loan waiver of Rs 34,000 crore for farmers of the state
Congress President Rahul Gandhi on Saturday said that Prime Minister Narendra Modi's "grand MSP increase" for farmers is like applying Band-aid to a "massive haemorrhage". The Congress president took to Twitter where he said: " PM's grand MSP increase is budgeted at just 15,000 Cr. for India's 120 million farmers; which is like applying a Band-Aid to a massive haemorrhage. To put this MSP increase in perspective: in Karnataka, we've waived small farmer loans of over 34,000 Cr! Marketing Vs Action."
The the JD(S)-Congress government in Karnataka on Thursday had announced a farm loan waiver of Rs 34,000 crore for farmers of the state. While the Centre on Wednesday had announced a significant increase in the Minimum Support Price (MSP) for kharif crops including paddy and pulses, in line with Prime Minister Narendra Modi's promise of doubling farmers' income by 2022.
The hikes are aimed at offering farmers a 150 per cent return on their input costs on each crop that includes heads such as household labour. The MSP hikes would mean more than Rs 15,000 crore additional expenditure for the state exchequer. But the government dismissed fears of this stoking inflation and said it was keeping a close eye on this aspect.
In an election year, both Congress and BJP are trying to prove their credentials among the rural voters. With Madhya Pradesh, Chhattisgarh and Rajasthan elections slated for the end of the year, states which have large rural population, the battle for one-upmanship between the two parties is only likely to get more intense.
MSP serves as a floor price in wholesale agricultural markets. The latest round of increase comes after a brief lull. MSP witnessed a double-digit growth during agriculture years between 2009-2013 but then was moderated for various agricultural products in recent years, according to analysts at ratings agency Crisil. "While the average annual growth between agriculture years 2009 and 2013 was 19.3 per cent, it was only 3.6 per cent between 2014 and 2017. AY 2018 has seen a slight uptick, with an average MSP hike for kharif crops at 6.3 per cent, compared with 4.9 per cent in 2017. But overall, limited support from the floor price has further depressed market prices," Crisil said.
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