Addressing the media, Union Minister Rajnath Singh said the cabinet had taken the "historic" decision to provide relief to distressed farmers as it would have "positive impact" on the economy.

He said that the Commission of Agricultural Costs and Production (CACP) had fixed input cost for major monsoon crop paddy at Rs 1,166 per quintal and the government had added 50 per cent profit, which would make the MSP Rs 1,750 per quintal this year -- a steep increase of Rs 200 from Rs 1,550 last year.

The MSP for 'Grade A' variety of paddy would be Rs 1,770 per quintal while it will be Rs 2,430 per quintal for jowar -- a year-on-year jump of Rs 730.

He said the MSP would be based on 'A2 +FL' - one of the input cost concepts recommended by the Swaminathan Commission and the Central government would spend additional Rs 15,000 crore on account of the higher MSP.

Rajnath Singh said the MSP for bajra would be Rs 1,950 per quintal -- return of about 97 per cent as the input cost calculated by the CACP was Rs 990 per quintal.

The government has fixed the MSP of Rs 5,675 per quintal for arhar (66 per cent profit), Rs 6,975 for moong and Rs 5,600 for urad.

In case of cotton, the MSP has been raised to Rs 5,150 per quintal.

The MSP would be Rs 4,890 for groundnut, Rs 5,388 for sunflower, Rs 3,399 for soybean, Rs 6,249 for sesame and Rs 5,877 for nigerseed.

Rajnath Singh said the higher MSP was a part of the NDA government's plan to double farmers' income by 2022.