How MSP changed in UPA, NDA regimes over the years

By: Anshul Vipat

While the Modi government has claimed that they have done more for farmers when it comes to minimum support price than any other governments, an analysis of government data tells us a different story

Although, the government failed to provide any, India Tracker analysis shows that the government has been increasing the minimum support price for crops consistently since the past few years. For example, just last month, the government decided to hike the minimum support price for all rabi crops for marketing season 2023-24 announced the minimum support price or MSP for all rabi crops for marketing season 2023-24. The Centre increased the minimum support price for wheat from Rs 2,015 per quintal to Rs 2,125 per quintal for the next sowing season. The minimum support price for rapeseed and mustard was increased to Rs 5,450 per quintal from Rs 5,050 per quintal. The move is aimed at encouraging farmers to go for higher acreage.

The minimum support price has been successively rising over the years. One of the reason behind this hike is the government's promise to fix the support price at a level of at least 1.5 times of the all-India weighted average cost of production. The other factor is farmers' repeated demand of make the payment of MSP for all crops legally obligatory and mandatory. The farm union held a protest in Delhi again in August 2022 alleging that the Centre has done “nothing” regarding their promises made to the farmers.

But if one takes a closer look at data, it becomes clear that contrary to claims made by critics, the government has actually been raising the MSP for the major crops virtually every year, though not in spectacular terms. As the accompanying chart will show, MSP rate has been hiked by about 2-5 per cent annually in the past couple of years. Infact, MSP for Ragi, Jowar, and Bajra has witnessed a massive 50-75 percent jump. In 2022, MSP was raised by 6 percent average, the highest in four years.

The hikes are definitely not steep, but they have definitely grown faster than wages for rural and urban workers. Besides, since 2019, the government has been spending about Rs 65,000 crores every year making direct cash transfers to the bank accounts of farmers. On top of that, the fertiliser subsidy bill for the year 2021-22 was Rs 1,42,000 crores.

NDA govt’s MSP hike still lower than UPA era

While the Modi government has claimed that they have done more for farmers when it comes to minimum support price than any other governments, an analysis of government data show tells us a different story. According to data, between 2006-07 and 2013-14, when the UPA was in power, there was a 90 to 205 percent rise in the minimum support price (MSP) of major crops, including paddy, wheat, arhar, gram, maize and masoor.

Source: Ministry of Agriculture

During the subsequent six years of the NDA government, the MSP has grown at a comparatively modest rate of 40- 73 percent. For instance, the MSP of paddy was Rs 580 in the year 2006-07, it reached the level of Rs 1310 in 2013-14 — a growth of 126 percent.

Under the NDA government, the MSP of paddy (common) increased from Rs 1,310 in 2013-14 to Rs 2040 in 2022-23 — a growth of nearly 55 percent. Similarly, the MSP of wheat was Rs 750 in 2006-7, which increased to Rs 1,400 in 2013-14 - a growth of 87 percent. For 2023-24 season, the minimum support price for wheat from Rs 2,015 per quintal, an increase of 46 percent in the last eight years