Cabinet approves MSP hike for 14 crops to give relief to farmers; MSME Sector's definition revised

Image courtesy: Twitter/PIB

New Delhi: The Union Cabinet, chaired by Prime Minister Narendra Modi, approved an increase in minimum support prices (MSP) of 14 Kharif crops. The increased MSP will ensure a price which will be 50 per cent to 83 per cent more than the cost of production, said Information and Broadcasting (I&B) Minister Prakash Javadekar on Monday (June 1).

Addressing reporters on Cabinet decisions, Javadekar said the government has taken key steps to boost MSMEs and Rs 20,000 crore has been infused into the sector, adding "The Cabinet today has approved Rs 20,000 crore subordinated debt for stressed MSMEs, this will benefit 2 lakh stressed MSMEs." 

The cabinet today also decided to change the definition of the MSME (Micro, Small, and Medium Enterprises) sector has been changed once again -- turnover limit for medium enterprises has been revised upward to Rs 250 crore from Rs 100 crore as announced earlier.

Union Minister Narendra Tomar, who also addressed the press briefing on the cabinet decision, said, "Minimum support prices (MSP) for 14 Kharif crops have been increased by 50%-83% to provide relief to the farmers."

The government has increased the MSP of Kharif crops to ensure remunerative prices to growers for their produce. 

Notably, the highest increase in MSP is proposed for niger seed (Rs 755 per quintal) followed by sesamum (Rs 370 per quintal), urad (Rs 300 per quintal) and cotton (long staple) (Rs 275 per quintal). The differential remuneration is aimed at encouraging crop diversification.

Today's meeting assumes significance as the Ministry of Home Affairs (MHA) has issued new guidelines for phased re-opening of "all activities outside containment zones" from June 1. 

Igniting spirit of Jai Kisan

For the Kharif season 2020-21, the government has kept its promise of fixing the MSP at a level of at least 1.5 times of the cost of production. Today, the MSP of 14 crops for the Kharif season 2020-21 has been announced, based on the recommendation of CACP. The return over cost for theses 14 crops ranges from 50% to 83%.

The government has also decided to extend repayment date up to 31.08.2020 for all Short-Term loans up to Rs.3 lakh advanced for agriculture and allied activities by banks. Farmers will also get the benefit of interest subvention and prompt repayment incentive.

The agricultural short-term loan due between 1st March 2020 and 31st August 2020 will continue to get the benefit of 2% Interest Subvention (IS) to Banks and 3% Prompt Repayment Incentive (PRI) to farmers.

The government's decision of providing such loans to farmers through banks @ 7% per annum, with 2% per annum interest subvention to banks and 3% additional benefit on timely repayment by farmers thus provides loans up to Rs.3 lakh at 4% per annum interest.

Interest Subvention Scheme (ISS) was started to provide concessional short-term crop loans including loans availed through Kisan Credit Cards to the farmers. In the last few weeks, many farmers are not able to travel to bank branches for payment of their short-term crop loan dues. Hence the cabinet decision would help the crores of farmers. 

Caring for the poor 

The poor and vulnerable are at the top of the priorities of the Government led by the Prime Minister. During the Coronavirus pandemic, right from the day of announcement of the lockdown, the government has been sensitive to the needs of the poorest of the poor. This was seen in the announcement of the Pradhan Mantri Garib Kalyan Yojana package on the 26th of March 2020, within just two days of the start of lockdown.

From ensuring coverage of around 80 crore people with food security to direct cash transfers into the bank accounts of 20 crore women, from putting money into the hands of senior citizens, poor widows, and poor Divyangs to front-loading of the PM-KISAN installment to crores of farmers, steps were announced. These covered a wide range of vulnerable sections who would have borne the brunt of the lockdown if not for the immediate intervention of the government. Moreover, these were not mere announcements. Within days, assistance reached crores of people directly, either in cash or kind.

As part of the Atmanirbhar Bharat initiative, One Nation One Ration card, free food grains even for those without ration cards, a new affordable rental scheme for their housing, and many more measures have been announced for the welfare of the migrant labourers.

Massive reforms were announced for farmer welfare, freeing farmers from the chains that bound them and giving their income prospects a significant boost. Along with this, more investments into farm infrastructure were proposed. Allied activities such as fisheries too received a financial package.