Cabinet clears hike in MSP for grains

The Cabinet Committee on Economic Affairs (CCEA), which met here today approved an across the board hike in the minimum support price (MSP) for grains, oilseeds, coarse cereals and pulses.

It also approved an investment of Rs 601.90 crore for setting up a transmission system to evacuate power from the National Thermal Power Corporation's (NTPC's) Sipat stage-II terminal power plant. It has cleared a steep Rs 100 per quintal increase in the MSP for groundnut and Rs 10 per quintal for paddy.

Announcing the decision to hike the MSP for kharif season 2004-05, Finance Minister P Chidambaram said the MSP of paddy was increased to Rs 560 and Rs 590 for ordinary and grade A categories respectively. The substantial hike in the MSP of oilseeds and pulses against a small increase for that of paddy was in line with the recommendations of the Commission on Agriculture and Prices (CACP).

CACP has recommended higer support prices for oilseeds and pulses in which the country is deficient, to encourage crop diversification and break the wheat-rice cycle mainly in the grain bowl of Punjab and Haryana.

The CCEA also approved the proposal of ONGC Videsh, the overseas arm of ONGC, to give Sudan a small stake in its two prized oil blocks in the African nation for free as a quid pro quo for Khartoum accommodating it in another producing oil field.

Sudan had asked ONGC Videsh to part with five per cent of its 26.125 per cent stake in block 5a and 24.5 per cent interest in block 5b, which it had bought from Austrian company OMV for $ 136 million, in return for Sudan facilitating OVL's buyout of talisman energy of Canada in the greater Nile oil project.

The CCEA also approved an investment of Rs 601.90 crore in setting up of a transmission system to evacuate power fromNTPC's Sipat stage-II terminal power plant.