Cabinet approves ₹2.79 trillion for rabi MSPs, green energy, Delhi traffic system

New Delhi: The Union cabinet on Wednesday raised minimum support prices (MSPs) for all mandated rabi crops for the 2027-28 (April-March) marketing season, with safflower getting the biggest increase, while also approving a ₹1.86 trillion plan to expand the power grid and a ₹1,790 crore project to overhaul Delhi’s traffic management system.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved the higher MSPs, which the government said would result in a payout of ₹90,962 crore to farmers growing wheat, barley, gram, rapeseed and mustard, and safflower, among other crops, Union information and broadcasting minister Ashwini Vaishnaw said at a press briefing.

MSP push

Safflower received the biggest increase, at ₹675 per quintal, followed by rapeseed and mustard at ₹413 per 100 kg. The government said the higher MSPs are aimed at providing remunerative returns to farmers and encouraging crop diversification.

Quick answers to key questions

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QUESTIONS

The MSPs for rabi crops in 2027-28 include wheat at ₹2,610 per 100 kg, barley at ₹2,286, gram at ₹5,958, masur at ₹7,390, rapeseed and mustard at ₹6,613, and safflower at ₹7,215 per 100 kg.

The government raised MSPs to provide remunerative returns to farmers and encourage crop diversification, aiming to move beyond cereals and support pulses and oilseeds cultivation.

The ITMS utilizes real-time traffic data and adaptive signal control to dynamically adjust signal timings, improving traffic management and reducing delays at busy intersections.

The increased MSPs are expected to boost farmers' income by ensuring prices are significantly above the cost of production, providing a margin that enhances their economic sustainability.

Yes, the new MSP for wheat is set at ₹2,610 per quintal, which is over double the production cost, leading to higher profits for farmers growing wheat.

The MSP for wheat, the largest food grain grown during the rabi season, was raised by ₹25 to ₹2,610 per 100 kg from ₹2,585 this marketing season, and up from ₹2,425 in the 2025-26 marketing season. The wheat marketing year starts in April. As per the government's third advance estimates, wheat production was estimated at 120.6 million tonnes for the 2025-26 crop year.

The MSP for barley has been raised by ₹136 to ₹2,286 per 100 kg, while that for gram was raised by ₹83 to ₹5,958. The MSP for lentils, or masur, was increased by ₹390 to ₹7,390 per 100 kg. The MSP for rapeseed and mustard was raised to ₹6,613, while safflower MSP was fixed at ₹7,215 per 100 kg.

The increases come as the government seeks to encourage farmers to shift acreage beyond cereals towards pulses and oilseeds. The government said the revised MSPs are in line with the 2018-19 Union budget decision to fix MSPs at least 1.5 times the all-India weighted average cost of production.

The sharper increases for oilseeds and pulses, coupled with a relatively modest increase for wheat, reflect a calibrated policy shift towards crop diversification, import substitution and a broader move from a food security-centric approach towards nutrition security, said Satyam Shivam Sundaram, partner, strategy & transactions, EY LLP.

“The stronger incentives for crops such as rapeseed-mustard, safflower and masur are well aligned with India's long-term objective of enhancing self-sufficiency in edible oils and pulses, reducing import dependence, and strengthening farm income resilience,” Sundaram said, commenting on the Cabinet’s decision to raise rabi MSPs for the 2027-28 marketing season.

Some have argued that the MSP hikes for key rabi crops remain below the rise in input costs.

“The increase in MSP for rabi crops, ranging from 0.96% to 10.32%, is lower than the rise in input costs for several major crops. For wheat, gram and lentil, the hikes are only 0.96%, 1.41% and 5.57%, respectively. This also raises questions about the government’s commitment to providing farmers a 50% margin over input costs,” said Sudhir Panwar, former member of the Uttar Pradesh planning commission.

Grid and traffic

The Union cabinet also approved the Green Energy Corridor Phase-III scheme to set up 50 GWh of battery energy storage systems (BESS) and enable India’s intra-state transmission system to evacuate up to 135 GW of renewable energy, according to a Cabinet statement.

The scheme is targeted for completion by fiscal year 2033 (FY33) and has a total project outlay of ₹1.86 trillion, comprising ₹1.36 trillion for the development of intra-state transmission systems under GEC-III and ₹50,000 crore for 50 GWh of BESS. The scheme involves total central financial support of ₹54,082 crore.

Mint had reported on 11 August that the ministry of new and renewable energy (MNRE) would seek Union cabinet approval for the over ₹50,000-crore third phase of India’s green energy corridor.

The push comes as India’s rapid addition of solar and wind capacity outpaces the grid’s ability to evacuate the power, forcing generation curtailment and emerging as a key hurdle to the country’s 2030 clean-energy goals.

“The scheme will bring together the ministry of power, ministry of new and renewable energy, PowerGrid, state transmission utilities, and state governments,” Vaishnaw said during the press briefing.

“GEC-III is a forward-looking scheme. Today's curtailment sits largely on the ISTS network, but once the ISTS waiver lapses in June 2028, the economics shift towards in-state RE, and state grids aren't built for that load. Without intra-state evacuation readiness, we would simply move the congestion from central pooling stations to state substations. This scheme gets ahead of that. Co-locating 50 GWh of storage with the network is the smarter part,” said Sanjeev Aggarwal, founder and executive chairman, Hexa Climate, a renewable energy developer.

“Transmission solves for distance and storage solves for time, and BESS commissions in months against four years for a line. The ministry's own principle, that transmission must precede RE, is the right one,” he added.

The CCEA also approved a ₹1,790 crore proposal to overhaul Delhi’s traffic management system to reduce logjams on the national capital’s roads.

The project will cover 42 identified traffic corridors and will be implemented in three phases over 24 months, followed by five years of operation and maintenance.

The project assumes importance because vehicle growth has substantially outpaced expansion of road infrastructure, while traffic regulation continues to depend significantly on fixed signal timings and manual intervention, a CCEA statement said.

The new system will include smarter traffic signals, timely information for commuters and faster response to congestion and accidents.

“Delhi Police will implement the project through a Master System Integrator selected through competitive bidding. C-DAC will provide technical support as Project Management Consultant, including technical scrutiny, monitoring, validation and acceptance during implementation and operation and maintenance,” a CCEA statement said.

C-DAC, which stands for Centre for Development of Advanced Computing, is a government body under the ministry of electronics and information technology.