CA Foundation · Business Economics · Indian Economy
Which of the following is the system under which the Government of India announces a price at which it is ready to buy specified crops from farmers, in order to protect them from a sharp fall in market prices?
The Minimum Support Price is the guaranteed floor price announced by the government at which it is ready to buy specified crops from farmers. It protects farmers from steep price falls. The issue price, by contrast, is what the government charges when selling foodgrains through the public distribution system.
- AIssue price
- BMinimum Support PriceCorrect
- CCeiling price
- DProcurement subsidy
Explanation
The Minimum Support Price (MSP) is the price announced by the government at which it stands ready to purchase specified crops, giving farmers a floor against sharp price falls. The issue price is different: it is the price at which the government sells foodgrains from its stock under the PDS.
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