Maximum support prices

The government’s new kharif pricing policy, suggesting a steep 16 to 53 per cent increase in the minimum support prices (MSPs) of various crops, is unlikely to fully satisfy farmers even as it will stoke food inflation and swell the food subsidy bill. Approval of the new prices by the Cabinet Committee on Economic Affairs (CCEA) came on the day that inflation numbers for May were released; wholesale price-based inflation went up to 7.55 per cent from 7.23 per cent in April, pushed by unrelenting food inflation at 10.74 per cent. Food inflation has been in the double digits for three months now.

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