The cabinet headed by prime minister Narendra Modi on Monday announced the minimum support prices for 14 crops that are 50%-83% higher than the cost of cultivation in an effort to put more money in the hands of farmers.

Briefing reporters at the end of the cabinet meeting, Agriculture Minister Narendra Singh Tomar said the MSP of paddy and jowar had been increased by 50% each over the cost of cultivation to 1868 and 2,620 respectively. MSP of bajra was hiked by 83% over the cost of cultivation to 2,150.

Tomar also said that the Modi government had extended an interest subvention scheme for farmers by another three months to 31 August. Farmers are given loans at 9% by banks. The government gives them a subsidy of 2% on this. If farmers return the loan on time, they get a further 3% reduction on the interest, Tomar said adding that this meant those who repay loans on time have to pay only 4% interests on their loans.

Given that the country was grappling with the covid-19 pandemic, the government had previously extended the date of repayment to 31 May. This deadline has now been further extended to 31 August, the minister said.

“This will be a big relief for farmers,” Tomar said.

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