Government officials warn that a legal guarantee for MSP might result in a financial catastrophe

NEW DELHI: Government sources said on Tuesday that offering a legal guarantee for the purchase of all commodities at the minimum support price may lead to a financial catastrophe, but they also expressed a desire to communicate with farmer organizations.

Officials said that the value of agricultural production in the nation during FY20 was assessed at Rs 40 lakh crore, whilst the market value of the 24 crops that are a part of the MSP regime was estimated at Rs 10 lakh crore, demonstrating how a law providing a guarantee was not practical.
Vishwa Mohan
Purchasing this amount of food would need the Center to spend a total of Rs 45 lakh crore (for 2023–2024), which would leave relatively little money for other social and development objectives that are essential to the growth of an economy the size of India.
Government spending on capital expenditures (capex) is allocated at Rs 11,11,111 crore for the next fiscal year, mostly for the construction of roads and railroads. “It is higher than the average yearly spending on infrastructure over the previous seven fiscal years (Rs 67 lakh crore, from 2016 to 2023) (Rs 10 lakh crore). A source said, “It is obvious that a universal MSP demand is neither financially or economically sensible.

However, government sources said that the reasoning does not stop the Center from having a conversation about the demand as long as agricultural organizations take part in the discussions, in contrast to their earlier stance of not even sending representatives to the central committee to debate the matter.
The lack of farmer participation in a committee led by former agricultural secretary Sanjay Agrawal was brought up by agriculture minister Arjun Munda on Tuesday. Farmers were asked to join a new committee or be a member of the panel that looked at enhancing the MSP system during the talks.

Other demands, including free electricity, according to officials, would force the nation to adopt unsustainable agricultural methods that would lead to an excessive use of subsurface water for crops that need a lot of water.