Question

Suppose a country is witnessing a shortage in foodgrains and the prices of foodgrains are also on the rise. Which of the following would be a right thing for the government to do?

• A. Buy foodgrains from farmers and store it in the buffer stock.
• B. Buy foodgrains from the market and store it in the buffer stock.
• C. Sell foodgrains in the buffer stock through PDS.
• D. Do nothing.

Answer 1

The correct option is C Sell foodgrains in the buffer stock through PDS.

An ideal thing for the government to do is to make foodgrains available to the people at low costs. The government can sell the foodgrains in its buffer stock through the public distribution system at a lower cost than the market price. This addresses the shortage of foodgrains and will also reduce their prices in the market.