The food economy: A Catch-22 for policymakers3 min read 08 Jul 2018, 07:03 PM IST
The best way to double the real incomes of Indian farmers would be to halve their numbers through job creation in other parts of the economy
The Narendra Modi government last week announced sharp increases in minimum support prices (MSPs) for a variety of farm products. The move itself is not unexpected. The first sign that the Modi government would shift away from its earlier strategy of minimal hikes to douse the inflation fire it inherited was evident in the February budget announced by finance minister Arun Jaitley, when there was a steep increase in the money kept aside for food subsidies as well as an explicit commitment to accept the advice given by M.S. Swaminathan that farmers should be paid 50% more than the cost of production. Rural distress is also a growing political concern as the country moves closer to the next general election.