In India, which of the following can be considered as public investment in agriculture ? 1. Fixing Minimum Support Price for agricultural produce of all crops 2. Computerization of Primary Agricultural Credit Societies 3. Social Capital development 4. Free electricity supply to farmers 5. Waiver of agricultural loans by the banking system 6. Setting up of cold storage facilities by the governments Select the correct answer using the code given below :
- (a) 1, 2 and 5 only
- (b) 1, 3, 4 and 5 only
- (c) 2, 3 and 6 only ✓ UPSC's answer
- (d) 1, 2, 3, 4, 5 and 6
Why the answer is (c)
• Public investment means government capital spending that creates productive assets or capacity in agriculture, as distinct from subsidies and transfers that support current consumption.
• Computerising PACS (2), building social capital such as FPOs and extension networks (3), and government cold-storage facilities (6) create lasting capacity — public investment.
• MSP (1), free electricity (4) and loan waivers (5) are price support, input subsidy and debt relief respectively; they are current expenditure/transfers, not investment.
• Economists note India's farm spending is skewed towards such subsidies at the expense of investment.
• Hence 2, 3 and 6 only, option (c).
Why the other options are wrong
- (a) 1, 2 and 5 only
- MSP and loan waivers are transfers, not investment.
- (b) 1, 3, 4 and 5 only
- MSP, free power and waivers are subsidies, not capital formation.
- (d) 1, 2, 3, 4, 5 and 6
- Items 1, 4 and 5 are subsidies/transfers, not investment.
Asked in the GS Paper I of the UPSC Civil Services Preliminary Examination 2020, held on 4 October 2020. Question and answer key: Union Public Service Commission. Explanation: UPSC Answer Check.