The central government on Monday (June 1) announced a hike in minimum support prices (MSP) for 14 kharif (summer) crops, besides other Cabinet decisions pertaining to the micro, small and medium enterprises (MSMEs) sector and also street vendors.
The MSPs for 14 kharif crops have been increased by 50-83 per cent to provide relief to the farmers, announced Union Agriculture Minister Narendra Singh Tomar at a press conference which was also addressed by his Cabinet colleagues, Nitin Gadkari and Prakash Javadekar.
The Cabinet also approved the ₹20,000 crore subordinate debt for stressed MSMEs and the ₹50,000 crore equity infusion for MSMEs to strengthen their growth potential, on Monday.
The briefing was preceded by meetings of the Cabinet Committee on Security and the Cabinet Committee on Economic Affairs earlier in the day. The announcements came at a time when the country is staring at a phase-wise resumption of economic activities after over two months of coronavirus-enforced lockdown.
“Based on the recommendation of the Commission for Agricultural Costs and Prices (CACP), the Cabinet has approved MSP of 14 crops. Paddy (common) MSP has been increased to ₹1,868 per quintal for this year,” Tomar said. “The farmers will get more time to repay their loans, till August now,” he added.
He said the increase in support price of paddy will ensure 50 per cent return over the cost to the farmers, he said. The MSP of Grade A variety of Paddy has been increased to ₹1,888 per quintal for 2020-21 crop year from 1,835 per quintal last year.
In an official statement, the government said the support price of cotton (medium staple) has been increased by ₹260 per quintal to ₹5,515 per quintal for 2020-21 from ₹5,255 per quintal last year. The support price of cotton (long staple) has been increased to ₹5,825 per quintal from ₹5,550 per quintal in the said period, it added.
The minister said that the MSP for paddy has been hiked by ₹53 per quintal to ₹1,868 per quintal for the 2020-21 crop year. Besides, the MSP for cotton has been increased by ₹260 to ₹5,515 per quintal for 2020-21, he added. It may be noted that the Met Department has projected normal monsoon during the June-September period.
Meanwhile, Road Transport and MSME Minister Gadkari said the Cabinet has approved modalities and road map for implementation of the two packages for MSME sector, which includes the ₹20,000 crore package and the ₹50,000 equity infusion through fund of funds.
During the first tranche of ‘Atmanirbhar Bharat’ announcements last month, Union Finance Minister Nirmala Sitharaman had announced the two packages. She had said that a fund of funds was being created which will infuse ₹50,000 crore equity in MSMEs with growth potential.
Union Minister Javadekar said the decision on equity infusion will also enable the MSMEs to get listed on stock exchanges.
A fund of funds with cropus of ₹10,000 will be set up. The fund of funds will be operated through mother fund and few daughter funds. The fund structure will help leverage ₹50,000 crore of funds at daughter funds level. The subordinate debt for stressed MSMEs is likely to benefit 2 lakh stressed MSMEs.
Meanwhile, the government further amended the definition of MSME. Turnover limit for medium enterprises has been revised upward to ₹250 crore (from ₹100 crore as announced earlier).
(With inputs from agencies)