Question

As announced in the Union Budget, 2018-19, the Government of India fixes Minimum Support Price (MSP) of crops at a level of at least ______ times of the all India weighted average cost of production.
1. 1.1
2. 1.7
3. 1.5
4. 1.2

Answer 1

Correct Answer - Option 3 : 1.5

The correct answer is 1.5.

• According to Article 112 of the Constitution of India, the Union budget also known as the Annual Financial Statement is a statement showing the estimated revenue and expenditure of the Government for a period of one year.
• The Minimum Support Price (MSP) is the minimum price set by the Government for agricultural produce.
• It is the price at which agricultural products must be purchased directly from the farmers so that farmers can get minimum profit on their harvest whatever may be the open market price.
• The Minimum Support Price is set on the recommendation of the Commission for Agricultural Costs and Prices (CACP) since 2009 taking into consideration the following factors:
  • Demand for Product.
  • Supply of Product.
  • Cost of Production.
  • Fluctuations in prices.
  • Trends of market prices.
  • Various costs and prices of the international market.
  • Agricultural wage rate.
• The Minimum Support Price mechanism in total covers 23 commodities they are as follows:-
  • Paddy
  • Wheat
  • Maize
  • Sorghum
  • Pearl millet
  • Barley
  • Ragi
  • Gram
  • Tur
  • Moong
  • Urad
  • Lentil
  • Peanut
  • Rapeseed
  • Soybean
  • Sesame
  • Sunflower
  • Safflower
  • Niger seed
  • Copra
  • Sugarcane
  • Cotton
  • Raw Jute
• As announced in the Union Budget, 2018-19, the Government of India fixes the Minimum Support Price (MSP) of crops at a level of at least 1.5 times of the all India weighted average cost of production.