To give a pre-Diwali boost to farmers, the government on Wednesday raised the Minimum Support Price (MSP) of wheat by over 6 per cent for rabi season 2025-26. It also approved hike in Dearness Allowance (DA) for Central government employees and Dearness Relief (DR) for Central government pensioners.
“Like for kharif crops, there is a significant increase in the MSP for rabi crops,” Information and Broadcasting Minister Ashwini Vaishnaw said in a media briefing after the meeting of the Cabinet and the Cabinet Committee on Economic Affairs (CCEA). The latter approved price hikes for six rabi crops, with increases ranging from ₹130 to ₹300 per quintal for the 2025-26 marketing season beginning April 2025.
Domestic production
The government also raised the MSP for rapeseed and mustard seed by ₹300 to ₹5,950 per quintal, aiming to boost domestic oilseed production and reduce edible oil imports. The support price for safflower increased by ₹140 to ₹5,940 per quintal for 2025-26 from ₹5,800 per quintal in the previous season. In the case of pulses, the support price for lentil (masur) was increased by ₹275 to ₹6,700 per quintal, while that for gram MSP was raised by ₹210 to ₹5,650 per quintal for 2025-26. The support price for barley was increased by ₹130 to ₹1,980 per quintal for 2025-26 from ₹1,850 per quintal in the previous season.
The announcement comes as States such as Maharashtra, Jharkhand and Delhi prepare for elections. However, Vaishnaw dismissed any connection between the MSP hikes and the upcoming polls, stating that such announcements typically occur around this time. The government expects these hikes to ensure remunerative prices for farmers and encourage crop diversification.
MSP is the price at which government procure new-season crops. Based on the advice of the Commission for Agricultural Costs & Prices (CACP), the government sets a price each year at which it will buy wheat and rice along with 20 other crops from farmers. Wheat and rice are procured to distribute free or sell at lower cost, while MSP for other crops aim to see farmers get remunerative price from traders.
After five consecutive record harvests, a sharp rise in temperatures shrivelled India’s wheat crop in 2022 and 2023, prompting the government to ban exports. This year’s crop was also nearly 6.25 per cent lower than a government estimate of 113.3 million metric tons, a leading industry body said earlier this year.
Domestic prices have stayed above this year’s minimum purchase rate of ₹2,275 per 100 kg but government has struggled to replenish state wheat stocks. The government has, this year, bought 26.6 million tonnes of wheat, falling short of its target of 30-32 mt. That was despite its advice to trading houses to refrain from purchases to enable state stockpiler the Food Corporation of India to procure large quantities.
DA/DR
The Cabinet approved an additional instalment of DA and DR, representing an increase of 3 per cent over the existing rate of 50 per cent of the Basic Pay/Pension, to compensate against price rise. This will benefit about 49.18 lakh Central government employees and 64.89 lakh pensioners. The combined impact on the exchequer on account of both DA and DR would be around ₹9,400 crore.