NITI Aayog fears increase in MSP may add to inflation

NITI Aayog members have expressed mixed opinions over the increasing minimum support price (MSP).

Published: 12th April 2018 01:13 AM  |   Last Updated: 12th April 2018 06:48 AM   |  A+A-

File Photo of Niti Aayog headquarters in New Delhi. (File Photo)

Express News Service

NEW DELHI: NITI Aayog members have expressed mixed opinions over the increasing minimum support price (MSP). Many of them have voiced their concerns on MSP, terming it as a good idea but one that would add to the inflation. 

“This is certainly a good idea and there is no doubt it will increase farmers’ income. However, some of the members feel it will have an inflationary effect and that it will be detrimental especially during the election years. Many members share this view, they have already warned against the MSP,” a NITI Aayog member told TNIE.

In fact, to tackle the inflation due to MSP announcements, NITI Aayog had recommended that states must invest in agriculture infrastructure, create efficient supply chains and competitive markets and improve logistics. However, members feel that the task is too ambitious to be completed in one year.

“Some of the agri states have very bad infrastructure and it will take some time for the states to address these bottlenecks. The question is not whether it is achievable; the question is if it can be achieved in one year and the answer is no. In that case, it will backfire. Now, this is up to the government,” the NITI Aayog member explained. 

This is not the first instance that NITI Aayog has expressed reservations against the MSP issue. In fact, one of the members, Ramesh Chand, had already communicated similar views in an internal NITI Aayog report.

“Transmission of this increase to wholesale and retail levels will have very strong implications for inflation and consumers,” the NITI Aayog document titled Ensuring MSP benefits for farmers said.


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