The union Finance minister Pranab Mukherjee has approved the plans t6o
purchase 2.5 million bales of cotton worth 5,000 crore following the
protests in the state of Gujarat.

The cotton will be purchased by the state-run Cotton Corporation of
India in and will help keep the price of cotton above the minimum
support price following protest by farmers in the state-ruled by BJP’s
Narendra Modi.

The union finance ministry has agreed to compensate for the losses in
the purchasing initiative and also provide a letter of comfort to banks
that extend credit to the Cotton Corporation in order to allow the
corporation to avoid being charged the margin money of 15 per cent.

The moves comes as a relief to the board of CCI, who have been facing
farmer unrest in recent times over issues relating to cotton prices. A
panel of ministers including Commerce and Textiles Minister Anand
Sharma, Pranab Mukherjee and Agriculture Minister Sharad Pawar were
expected to meet on Monday to discuss the proposal to create a buffer
stock of cotton.

However, the finance ministry did not wanted to delay the matter and approved the proposal on on Thursday evening.