New Delhi: A panel headed by chief economic adviser Arvind Subramanian to review India’s policy on pulses has recommended increasing the minimum support price (MSP) of tur (pigeon pea) and urad (black gram) by 20%, downplaying the potential inflationary impact of the move.
The committee said the MSP of the two pulse varieties should be increased to Rs60 per kg from around Rs50. It also called for the immediate lifting of stock limits and export bans on pulses and suggested development of indigenous, genetically-modified varieties. The committee, which submitted its report to finance minister Arun Jaitley and food and consumer affairs minister Ram Vilas Paswan on Friday, said the government should instruct the Commission for Agricultural Costs and Prices to immediately announce the suggested MSP for both urad and tur for the kharif season (summer crop) of 2017.
“Efforts to be made to give production subsidies to farmers for growing pulses in irrigated areas of about Rs10-15 per kg to be given via direct benefit transfer”, said the report by the panel, formed in July after prices of pulses rocketed over the past year as demand outpaced supply.
The committee asked the government to eliminate export bans on pulses and stock limits imposed on wholesalers. “The greater the limits on procurement by the government, the greater the urgency to take these actions to ensure that market prices stabilize above the MSP. The worst case scenario for farmers is weak procurement and stock limits which force farmers to sell most of their output at market prices that are well below MSP,” it added.
Subramanian also urged the government to launch an effort on a war footing to procure moong, tur and urad at their respective MSPs because of expected bumper production in India as well as other major pulse-producing countries. The committee said the government must allocate an additional Rs10,000 crore to the various procurement agencies.
The report conceded the possibility of an uptick in inflation because of the recommended MSP increases, but said this was unlikely to happen given that higher production and procurement would ensure adequate supplies.