The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi, on Tuesday approved a proposal to raise the minimum support price (MSP) for raw jute to ₹4,750 a quintal for the 2022-23 season, an increase of ₹250, or 5.5%, over the previous year.

The new MSP would ensure a return of 60.53% over the all-India weighted average cost of production, the government said.

The hike is in line with the principle of fixing the MSP at a minimum of 1.5 times the all-India weighted average cost of production, as announced in the budget for 2018-19. This assures a minimum 50% profit margin, it added.

The Commission for Agricultural Costs and Prices had recommended the higher MSP.

The Jute Corporation of India will continue to be the central government’s nodal agency to undertake price support operations and the losses incurred in such operations will be fully reimbursed by the central government.