April 14, 2011
 

Indian government approves bonus for wheat

The government is thought to have approved an agriculture ministry proposal to award a bonus of INR50 (US$1) per quintal over and above the minimum support price of wheat which stands at about INR1,120 (US$25) per quintal currently for the 2011-12 crop-marketing season that began in April.

However, a formal declaration regarding the same has remained on hold due to state assembly elections in four states.

The cabinet committee on economic affairs discussed the proposal in its meeting on April 5.

Officials said, although agriculture and consumer affairs ministries supported a bonus on the minimum support price of wheat, the food ministry was against the idea as it could increase the food subsidy bill. Procurement is also predicted to be good in 2011-12.

In this year's budget approximations, India's food subsidy bill has been put at INR605.73 billion (US$13.62 million), a reduction from 2010-11 changed estimates of INR60.6 billion (US$13.63 million).

The government has increased the MSP of wheat by INR20 (US$0.45) a quintal to INR1,120 (US$25) a quintal for the 2010-11 rabi marketing season (March-April).

The Food Corporation of India (FCI) intends to purchase more than 26 million tonnes of wheat in 2011-2012.