CA Foundation · Business Economics · Indian Economy
Which of the following is the main purpose of the Minimum Support Price (MSP) announced by the Government of India for notified crops?
MSP is meant to give farmers a guaranteed minimum, remunerative price for notified crops and so encourage production. It works as a price floor, with government procurement backing it, rather than a maximum price, a tariff rate or a tax measure.
- ATo guarantee farmers a remunerative price floor and encourage production of notified cropsCorrect
- BTo fix the maximum price at which farmers may sell their produce in mandis
- CTo set the import duty on agricultural commodities
- DTo determine the rate of agricultural income tax
Explanation
MSP is a price floor at which the government is prepared to purchase notified crops, protecting farmers from steep price falls. It is not a ceiling price, so the option describing a maximum selling price is wrong. It also has no link to import duty or income tax rates.
Did you get it right without looking?
One question tells you little. A timed set on Indian Economy shows your real accuracy, how long you take and where you lose marks.
More Indian Economy questions
- Which statement best describes the pattern of structural change in India's economy since independence, compared with the typical development…
- A graduate in a village works on the family farm throughout the year, but if she withdrew, the farm's total output would remain unchanged be…
- The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) primarily aims to provide:
- Which of the following best explains why public investment in infrastructure such as roads and power is often described as having a 'crowdin…
- In India's national income accounting, the share of the services sector in Gross Value Added has risen over time. Which of the following is …
- A farmer producing wheat finds that the government's Minimum Support Price is set above the free-market equilibrium price, and the governmen…