Q63 · UPSC Prelims 2020 · Set A · Economy

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Which of the following factors/policies were affecting the price of rice in India in the recent past?1.Minimum Support Price2.Government's trading3.Government's stockpiling4.Consumer subsidiesSelect the correct answer using the code given below

A 1, 2 and 4 only
B 1, 3 and 4 only
C 2 and 3 only
D 1, 2, 3 and 4

Correct answer: (d) 1, 2, 3 and 4

Explanation

  1. A

    1, 2 and 4 only

    1, 2 and 4 only. Stockpiling also moves prices.

  2. B

    1, 3 and 4 only

    1, 3 and 4 only. FCI/government trading also matters.

  3. C

    2 and 3 only

    2 and 3 only. Under-counts MSP and consumer subsidy.

  4. D

    1, 2, 3 and 4

    All four. MSP, government trading, stockpiling and consumer subsidies all affected rice prices.

Summary. Official key is (d) 1, 2, 3 and 4. Rice prices in India are a policy price: MSP, FCI buying and selling, buffer stocks, and food-subsidy issue prices all pull the same market.

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