Raje toes Narendra Modi line on MSP bonus, Chouhan demurs

Jun 28 2014, 07:49 IST
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Madhya Pradesh, another BJP-ruled state, has asked the Centre to reconsider its move. Reuters Madhya Pradesh, another BJP-ruled state, has asked the Centre to reconsider its move. Reuters
SummaryStates' bonuses artificially increase procurement price and creates inflation-inducing shortages.

92,000 crore last year.

The step to restrict procurement would be effective from the next rice procurement (October 2014-September 2015) and wheat purchase (April 2015-March 2016) seasons.

Besides, the food ministry has also warned the non-decentralised procurement states such as Punjab and Haryana that in case they also declare a bonus over and above MSP, FCI “will not take part in the MSP operations in the state concerned and state agencies will have to mobilise resources and take care of entire MSP operations in the state on their own”.

At present, FCI in collaboration with state government-owned agencies like Pungran (Punjab) and Haryana State Cooperative Supply and Marketing Federation carry out rice and wheat procurement in the states.

Rajasthan, Madhya Pradesh and Chhattisgarh, among others, are part of the decentralised procurement system, where the respective state government-owned food and civil supplies corporations purchase grain from the farmers and get reimbursed by the food ministry through FCI.

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