Steep hike in kharif MSPs may cost govt Rs 350 billion

Cabinet decision comes ahead of assembly polls in some key states

The Union Cabinet on Wednesday approved a sharp hike in minimum support prices (MSP) of kharif crops for the 2018-19 season in a bid to contain the farm sector distress. However, some farmers’ organisations argued that it was a small victory for them as the increased prices were still below the comprehensive cost of production. While the decision is being seen as a populist measure ahead of Assembly elections in Madhya Pradesh, Rajasthan and Chhattisgarh (big producers of kharif pulses, oilseeds and coarse cereals), it has also triggered concerns of a spike in food inflation. 

The decision will imply a