MSP hike is both bad politics and economics

The Narendra Modi government is trying to sell the higher minimum support prices (MSPs) it announced recently as a measure to “end farm distress”. But, at the end of the day, the announcement, like many a loan waiver, is a populist move, not a cure. The cure is economic liberalisation in agriculture, whereas measures like MSPs and loan waivers are anything but reforms; indeed these are, as we shall see, the very antithesis of reforms, containing the seeds of more rural misery.

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