IAS General Studies Prelims Question No. 40

Minimum Support Price system:
1. checks fall in price beyond a limit
2. protects interest of the consumers
3. protects the farmers against failure of crops
4. helps government in containing the fiscal deficit
Which among the above is / are correct?  
[A] Only 1
[B] Only 1, 2 & 3
[C] Only 1, 3 & 4
[D] 1, 2, 3 & 4
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[A] Only 1
The Minimum Support Prices were announced by the Government of India for the first time in 1966-67 for Wheat in the wake of the Green Revolution and extended harvest, to save the farmers from depleting profits. Since then, the MSP regime has been expanded to many crops. Minimum Support Price is the price at which government purchases crops from the farmers, whatever may be the price for the crops.   The MSP is announced by the Government of India for different crops currently at the beginning of each season viz. Rabi and Kharif.