India: MSP raised; implementation awaited – Standard Chartered

According to analysts at Standard Chartered, India’s MSP increase is likely to provide at least a 1.5x return on farmers’ costs, in line with expectations.

Key Quotes

“But decision on implementation mechanism deferred for now; crucial to assess the economic impact.”

“Our most likely scenario envisages a 35-40bps impact on headline CPI and a fiscal cost of 0.1-0.2% of GDP.”

“We maintain our call for one more rate hike in August; risk of a further hike if inflation overshoots.”