Average mandi prices of major food crops ruling below MSP: RBI article
Average mandi prices of major food crops, barring wheat, are ruling below the minimum support price due to bumper harvest of kharif and rabi crops, according to the latest Reserve Bank bulletin.
Also, high-frequency food price data for May so far (up to May 19) showed a broad-based moderation in prices of both cereals and pulses.
The Central Government fixes the Minimum Support Price (MSP) for 23 crops — 14 kharif, seven rabi, and two commercial crops. However, it procurers few commodities, especially wheat and rice for the central pool for the purpose of food security.
An article on the state of the economy published in the Reserve Bank of India's (RBI) May Bulletin further said that edible oil prices, on the other hand, continued to edge up — driven by soyabean, sunflower and mustard oil, while palm and groundnut oil prices moderated.
Among key vegetables, prices of onion recorded further correction, while potato and tomato prices showed an uptick.
"Following the bumper harvest of the major kharif as well as rabi crops along with the series of policy measures to combat food inflation, the average mandi prices of major food crops (except wheat) appear to have eased and are ruling below their Minimum Support Prices [MSPs], auguring well for the nation's food security," the article said.
Authors of the article said 'the data for average mandi prices refers to the period from April 1 to May 19, 2025'.
The central bank said 'The views expressed in the article are those of the authors and do not represent the views of the Reserve Bank of India.'.
Rajasthan and Madhya Pradesh have announced a bonus of ₹150/quintal and ₹175/quintal over MSP for wheat.
'In the case of summer crops,' the article said 'sowing, especially in pulses, is nearly complete'.
As of May 16, 2025, the sowing of paddy (accounting for around 43% of total summer acreage) was at 107.6% of full season normal area, while that of green gram or moong (accounting for around 27% of total season's acreage) was at 108.2%.
The cumulative summer acreage stood at 80.7 lakh hectares, which is 11.9% higher over the corresponding week's acreage during the previous year.
Going ahead the above normal rainfall forecast for Southwest Monsoon 2025 season (105% of the lakh per annum) and its likely early onset augurs well for the upcoming kharif season, the article said, and added that the requirement projected for the major fertilisers (except phosphatic fertilisers) is also higher as compared to the previous year.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Economic Times
18 minutes ago
- Economic Times
RBI throws a surprise party with big rate cut and Rs 2.5 lakh crore boost
Reuters RBI Governor Sanjay Malhotra The Reserve Bank of India (RBI) Friday shed its customary conservatism to deliver double the policy rate cut than anticipated by investors, amid receding inflation concerns. It also opened the liquidity floodgates to add Rs 2.5 lakh crore for onward lending to help restore the pace of economic expansion near the 8% aspirational threshold. The Monetary Policy Committee (MPC) also changed its stance to 'neutral' from 'accommodative' in what appears to be a signal that, amid expected global uncertainties, Mint Road has frontloaded its policy actions and would hit the pause button unless incoming datasets compel it to take further rate measures. "Strong macroeconomic fundamentals and benign inflation outlook provide space to monetary policy to support growth, while remaining consistent with the goal of price stability," said RBI governor Sanjay Malhotra, who has delivered three consecutive rate cuts in each of the reviews he has chaired since February. "The changed growth-inflation dynamics calls for not only continuing with policy easing, but also frontloading rate cuts to support growth." The half-a-percentage-point reduction in policy rates to 5.5% is expected to immediately lower home loan rates for borrowers with floating-rate loans, and borrowing costs for small entrepreneurs. One basis point is a hundredth of a percentage point. The rate cut is expected to immediately lower home loan rates for borrowers with floating rate loans, and borrowing costs for small entrepreneurs. At the same time, banks will start reducing deposit rates to protect margins. Easing food prices and benign crude oil prices prompted RBI to lower FY26 inflation estimates to 3.7%, from 4%, while it retained the fiscal year growth forecast at 6.5%, as announced in April. 'It is safe to say we have won the war on inflation,' Malhotra said. The rate-setting committee lowered the repo rate to the lowest in three years. All other policy rates stand revised accordingly. The central bank governor's surprise gift of a higher-than-expected rate cut and liquidity booster follows a series of measures to ease monetary conditions so banks and non-banks step up lending. Since taking charge in December, he has now lowered the repo rate and cash reserve ratio (CRR) by 100 basis points each, besides easing guidelines such as those on the liquidity coverage ratio and risk weights on bank loans to finance companies. Hot property The indices gained and yields on the benchmark paper fell to 6.14%, but later closed at 6.29%, after Malhotra announced a change in the policy stance. The rupee opened at 85.86 against dollar and strengthened to close at 85.62. 'The policy is definitely positive for all sectors of the economy, particularly for banking and finance,'' said CS Setty, chairman of State Bank of India. 'In particular, the lower cost of borrowing will act as a counterbalance to any uncertainty.' The reduction in CRR to 3% will be in four stages — of 25 bps each between September and would infuse an estimated Rs 2.5 lakh crore of liquidity into the banking system. On growth, RBI said it remains lower than 'aspirations,' given the challenging global environment. 'Our aspiration is 8%. We would like to grow as fast as possible,' said governor also hinted at a likely pause in the rate action after the outsized cut that surprised most market watchers. 'After having reduced the policy repo rate by 100 bps in quick succession since February 2025, under the current circumstances, monetary policy is left with very limited space to support growth,' he said. 'Action over mere intent' 'We could have kept it accommodative and not done anything. Action is more important. Whatever we say should also translate into action. The accommodative stance was only an intent,' said the governor. He also said the transmission has been good after the previous two rate cuts. 'We need to do it faster and that is why we have frontloaded some of our actions,' he said. Malhotra added that the move will certainly increase the flow of credit. 'That is why this liquidity is important and reducing the repo rate is important.' On inflation, the RBI governor said, 'Most projections point toward continued moderation in the prices of key commodities, including crude oil.... we need to remain watchful of weather-related uncertainties and still evolving tariff related concerns with their attendant impact on global commodity prices.'The minutes of the meeting of this policy review are expected to be published in about a fortnight. The next MPC review meeting is scheduled August 4-6.
Time of India
24 minutes ago
- Time of India
Manufacturing, youth in focus as Telangana takes steps to reach $1 trillion goal by 2035
1 2 3 Hyderabad: Telangana govt intends to implement multiple measures to achieve its goal of a $1 trillion economy by 2035. The current value of Telangana's economy is around $200 billion, while Maharashtra stands at $500 billion. It's estimated that Telangana will take about 15 years to hit $1 trillion economy, but to fast forward it to 2035 the govt is putting in place a policy focussed on four aspects – zoning for industrial growth, skill development, low population growth and woman's participation. On Friday, chief secretary K Ramakrishna Rao held a vision meeting to discuss the goal of reaching a $1 trillion economy by 2035 and $3 trillion by 2047. The state govt has given serious consideration to the recent observation of former Reserve Bank of India governor C Rangarajan that Telangana is among four states in the country with the highest potential to become developed by 2047. "The chief secretary said that to achieve this goal by 2035, a distinct vision and focus was essential," a source said. The meeting also addressed chief minister A Revanth Reddy's perspective that GSDP figures should be calculated with specific targets set for cities, particularly for Hyderabad, rather than adhering to the conventional practice of calculating GSDP for the entire state. The chief secretary also emphasised the need to focus on providing skills to the youth across the state to enhance their employability. A zoning system is being followed to promote industries and business activities within the Outer Ring Road (ORR) and the area between ORR and Regional Ring Road, which is seen as a significant economic booster. "Business activities are being planned in such a way that all services sector activities will be within ORR, while manufacturing will primarily be around RRR. The CM believes that manufacturing will drive the necessary growth in the economy by creating many blue collar jobs and generating revenue for the state. This zoning system is designed accordingly, and progress is being made in this direction. Hyderabad will be a major source of growth," a source said. The slow population growth rate is also seen as an advantage for achieving the target. Telangana's population is expected to remain around 4.2 crore, from the current approximately 3.8 crore. Additionally, the state has great potential as the participation of women in the labour force is quite high in the county. They will be more involved in economic activities by giving them ownership of green energy plants, sources said. However, there are clear challenges ahead in light of a significant debt burden. "It's not a problem that can be solved overnight, but the govt is aware that it needs to be addressed," a source said. Another concern is regarding environmental issues arising due to rapid development. "Hyderabad faces flooding during heavy rains, and we have implemented the Musi development plan," a source added. Get the latest lifestyle updates on Times of India, along with Eid wishes , messages , and quotes !
Indian Express
28 minutes ago
- Indian Express
RBI hikes loan-to-value ratio on gold loans below Rs 2.5 lakh to 85%
The Reserve Bank of India (RBI) on Friday increased the loan-to-value (LTV) ratio on gold loans up to Rs 2.5 lakh to 85 per cent per borrower, up from the 75 per cent proposed in the draft norms issued in April this year. For gold loans more than Rs 2.5 lakh and up to Rs 5 lakh, the LTV ratio has been set at 80 per cent. For loans more than Rs 5 lakh, the central bank has set an LTV of 75 per cent. The RBI said that the new norms will come into effect from April 1, 2026 Earlier in the day, RBI Governor Sanjay Malhotra told reporters that the RBI had proposed to increase the LTV ratio to 85 per cent for smaller loans below Rs 2.5 lakh. The LTV ratio will also include interest component, he said. LTV ratio is the ratio of the outstanding loan amount, including any accrued and unrealised interest, to the value of the collateral security on a reference date. In April this year, the RBI had issued draft guidelines on gold loans, a segment that has been witnessing an explosive growth in the last one year. 'The prescribed LTV ratio shall be maintained on an ongoing basis throughout the tenor of the loan,' the RBI said in a release. It said that a lender may decide on a suitable approach for lending against eligible collateral as part of its credit risk management framework, consistent with the principle of proportionality and ease of access for small ticket loans. 'However, detailed credit assessment, including assessment of borrower's repayment capacity shall be undertaken in case the total loan amount against eligible collateral is above Rs 2.5 lakh to a borrower,' the RBI said. The relaxation in gold loan norms comes days after the Department of Financial Services (DFS) had written to the Reserve Bank of India (RBI) to consider the requirements of small gold loan borrowers and exclude those borrowing below Rs 2 lakh under the draft gold loan norms. 'Draft Directions on Lending Against Gold Collateral issued by the @RBI have been examined by @DFS_India under guidance of Union Minister for Finance and Corporate Affairs Smt. @nsitharaman. @DFS_India has given suggestions to the @RBI to ensure that the requirements of the small gold loan borrowers are not adversely affected,' Finance Ministry said in a post on social media platform X (formerly Twitter) on May 30. DFS had suggested to the RBI that small-ticket borrowers below Rs 2 lakh may be excluded from the requirements of these proposed directions to ensure timely and speedy disbursement of loans for such small-ticket borrowers. The RBI said that a lender will not grant any advance or loan against primary gold or silver or financial assets backed by primary gold or silver, e.g., units of Exchange-traded funds (ETFs) or units of Mutual Funds. 'Gold or silver accepted as collateral shall be valued based on the reference price corresponding to its actual purity (caratage),' it said. For this purpose, the lower of the average closing price for gold or silver of that specific purity over the preceding 30 days, or the closing price for gold or silver of that specific purity on the preceding day, as published either by the India Bullion and Jewellers Association Ltd. (IBJA) or by a commodity exchange regulated by the Securities and Exchange Board of India (SEBI) will be used. The RBI governor said that the monitoring of end-use of gold loans will only be necessitated if a borrower was availing loans under priority sector lending. For standardisation of documents and communication, the RBI said that the loan agreement will cover the description of the eligible collateral taken as security, value of such collateral, details of auction procedure and the circumstances leading to the auction of the eligible collateral. 'A lender shall ensure that necessary infrastructure and facilities are put in place and appropriate security measures taken in each of its branches where loans are sanctioned against gold or silver collateral,' it said. The RBI said that a lender will release or return the pledged eligible collateral held as security to the borrower/ legal heir on the same day but in any case, not exceeding a maximum period of seven working days upon full repayment or settlement of the loan. It said that in case of any damage to the pledged eligible collateral by the lender during the tenor of loan, the cost of repair will be borne by the lender. The pledged gold or silver collateral lying with a lender beyond two years from the date of full repayment or settlement of loan shall be treated as unclaimed. A lender will periodically undertake special drives to ascertain the whereabouts of the borrower/ legal heir in respect of such unclaimed gold and silver collateral, the RBI said. The regulator also asked lender to refrain from issuance of misleading advertisements containing unrealistic claims to promote loans against gold or silver collateral. 'These directions shall be complied with as expeditiously as possible but no later than April 1, 2026,' the RBI said. As per RBI data, banks and NBFCs reported a phenomenal growth in gold loan outstanding to Rs 1.78 lakh crore as of January 2025, a surge of 76.9 per cent on a year-on-year basis. RBI data shows that NPAs in gold loans jumped 28.58 per cent in a year and loan outstanding grew by 27.26 per cent. NPAs rose by over Rs 1,500 crore to Rs 6,824 crore as of December 2024 as against Rs 5,307 crore a year ago. Of this, gold loan NPAs of Rs 2,040 crore were reported by commercial banks as of December 2024 from Rs 1,404 crore a year ago.
