Question

What was the pre-determined principle announced in the Union Budget for 2018-19 regarding the Minimum Support Price (MSP) for the principal crops in India?

• A. 50 per cent less than the cost of production
• B. One-and-a-half times the cost of production
• C. Equal to the cost of production.
• D. Double the cost of production

Answer 1

Answer:

B. One-and-a-half times the cost of production

Minimum Support Price (MSP) Announcement in Union Budget 2018-19

The Union Budget presented for the fiscal year 2018-19 announced a significant policy shift concerning the Minimum Support Price (MSP) for agricultural produce in India.

Key Principle for MSP:

• The budget declared a pre-determined principle to set the MSP for all principal crops.

• This principle was to ensure that the MSP would be at least one-and-a-half times the cost of production.

Background and Significance:

• This announcement aimed to provide greater certainty and assurance to farmers regarding their income.

• The cost of production typically includes expenses related to seeds, fertilizers, labor, land rent, and other inputs.

• The government's decision to fix MSP at 1.5 times the cost of production was a response to long-standing demands from farmer organizations and agricultural economists.

• This policy was intended to improve the economic viability of farming and boost agricultural sector growth.