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Question
The Union Budget 2018-19 has announced an increase in MSP for crops. This step may result in
1. Increase in food subsidy outgo
2. Decrease in government expenditure.
3. Rise in inflation.
4. Deterioration in farmers' income.
Which of the above statements is/are correct?
The Union Budget 2018-19 has announced an increase in MSP for crops. This step may result in
1. Increase in food subsidy outgo
2. Decrease in government expenditure.
3. Rise in inflation.
4. Deterioration in farmers' income.
Which of the above statements is/are correct?
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Solution
The correct option is C 1 and 3
Minimum Support Price (MSP) is a form of market intervention by the Government of India to ensure agricultural producers against any sharp fall in farm prices. It increases the government expenditure by increasing the subsidy outgo. It may result in rise in inflation due to increase in supply of money in the market. But if implemented with transparency and accountability, will help improve conditions of farmers in conditions of distress.
Minimum Support Price (MSP) is a form of market intervention by the Government of India to ensure agricultural producers against any sharp fall in farm prices. It increases the government expenditure by increasing the subsidy outgo. It may result in rise in inflation due to increase in supply of money in the market. But if implemented with transparency and accountability, will help improve conditions of farmers in conditions of distress.
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