Cabinet approved hikes in MSPs (Minimum Support Price) for Kharif crops for 2023-24 in the range of 5.3-10.4%, a tad higher than last year’s range of 4.4-8.9%.
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Jun 09, 2023
QuantEco Research || India Kharif MSPs: Offer Moderate and Sensible Price Signals
Cabinet approved hikes in MSPs (Minimum Support Price) for Kharif crops for 2023-24 in the range of 5.3-10.4%, a tad higher than last year’s range of 4.4-8.9%. On average, this translated into an increase of 7.5% - to mark the highest pace of expansion in last 5 years. We view the magnitude of hike as moderate and prudent, with no hint of populism ahead of key state elections. From inflation perspective, MSP revisions are likely to add ~60-65 bps of sequential price pressure on CPI index. On an annualized basis, the impact on FY24 CPI inflation is likely to be mild at 10-15 bps.