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?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. One-and-a-half times the cost of production.
In the Union Budget for 2018-19, the government announced a significant policy change regarding the Minimum Support Price (MSP) for India's principal crops. The pre-determined principle was to fix the MSP at a level of at least one and a half times (1.5 times) the cost of production.
This decision was a landmark move aimed at providing a more assured and remunerative price to farmers for their produce, thereby addressing the long-standing issue of agrarian distress and low farm incomes. The principle was based on the recommendations of the M.S. Swaminathan Commission, which had advocated for fixing MSP at a minimum of 50% above the comprehensive cost of production (C2 cost).
By implementing this, the government sought to ensure that farmers would not only recover their production costs but also earn a reasonable profit, encouraging them to continue farming and improving the overall health of the agricultural sector. The new principle was subsequently applied to all mandated Kharif and Rabi crops.