Journal of Indian School of Political Economy

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Minimum Support Prices in India:An Economic and Political Assessment


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1 Department of Economics, University of Mumbai, India
     

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This paper attempts to review the system of announcing Minimum Support Prices (for rice and wheat) from an economic and political perspective to assess its continued relevance. The study finds that Minimum Support Price does not seem to serve its stated objective of enhancing production; it has added to inflationary pressure; distorted cropping pattern in favour of rice and also adversely affected ground water resources. Added to this is the problem that it seems to have favoured a few States like Punjab and Haryana. On the political front, this paper seeks to examine the impact of elections on the support prices as well as on procurement of rice and wheat. We find convincing evidence to vindicate the hypothesis that policy decisions on support prices and procurement are guided by electoral considerations.
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  • Minimum Support Prices in India:An Economic and Political Assessment

Abstract Views: 324  |  PDF Views: 5

Authors

Swaha Shome
Department of Economics, University of Mumbai, India
Mala Lalvani
Department of Economics, University of Mumbai, India

Abstract


This paper attempts to review the system of announcing Minimum Support Prices (for rice and wheat) from an economic and political perspective to assess its continued relevance. The study finds that Minimum Support Price does not seem to serve its stated objective of enhancing production; it has added to inflationary pressure; distorted cropping pattern in favour of rice and also adversely affected ground water resources. Added to this is the problem that it seems to have favoured a few States like Punjab and Haryana. On the political front, this paper seeks to examine the impact of elections on the support prices as well as on procurement of rice and wheat. We find convincing evidence to vindicate the hypothesis that policy decisions on support prices and procurement are guided by electoral considerations.

References