IAS Economy Practice Question . 5

Consider the following observations about the Minimum Support Price mechanism in India:
1. They are determined by Commission for Agricultural Costs and Prices (CACP)
2. A cost plus pricing formula for determining the MSP is used
3. Compared with the past, hikes in MSPs for wheat and rice have been more substantial in recent years
Which among the above statements is / are correct?
[A]Only 1
[B]Only 1 & 2
[C]Only 2 & 3
[D]1, 2 & 3

Answer: 1, 2 & 3
All statements are correct. Please read about the MSP on web but don’t cram current rates as they change often.

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