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Business News/ Opinion / Pulse of the situation
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Pulse of the situation

Govt's inflation-fighting credentials received a boost when it decided to go in for large-scale imports instead of raising the MSP for pulses

In the last one year, prices of pulses have increased by more than 50% after a fall of almost two million tonnes in output between 2013-14 and 2014-15. Photo: Pradeep Gaur/MintPremium
In the last one year, prices of pulses have increased by more than 50% after a fall of almost two million tonnes in output between 2013-14 and 2014-15. Photo: Pradeep Gaur/Mint

The Union government’s inflation-fighting credentials received a boost on Wednesday when it decided to go in for large-scale imports instead of raising the minimum support price (MSP) for pulses.

This decision by the cabinet on Wednesday is likely to be seen as anti-farmer in these distressed times. On paper, the government could have boosted pulses output by increasing the MSP. In reality, pulses are one crop that has proved relatively impervious to price signals.

Decades of efforts to boost output of pulses have not worked. Under these conditions, higher MSP will only translate into higher prices, hurting the poor in both rural and urban areas.

In the last one year, prices of pulses have increased by more than 50% after a fall of almost two million tonnes in output between 2013-14 and 2014-15. There is a strong case for helping farmers  growing pulses—who are mostly in rain-fed areas—but higher MSP is not a solution.

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Published: 11 Jun 2015, 01:15 AM IST
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