Consider the following statements : 1. In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India. 2. In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise. Which of the statements given above is/are correct ?
- (a) 1 only
- (b) 2 only
- (c) Both 1 and 2
- (d) Neither 1 nor 2 ✓ UPSC's answer
Why the answer is (d)
• Statement 1 is wrong: open-ended (unlimited) MSP procurement applies effectively only to wheat and rice in procuring States; for pulses and oilseeds, procurement under PSS is capped (typically 25% of production) and coarse cereals are procured selectively.
• Statement 2 is wrong: MSP is a floor price, not a ceiling; market prices routinely rise above MSP when supply is tight (e.g. pulses in 2015–16).
• MSP is recommended by the CACP for 23 crops but procurement is uneven.
• Hence neither 1 nor 2, option (d).
Why the other options are wrong
- (a) 1 only
- Statement 1 is wrong: procurement is not unlimited for all crops.
- (b) 2 only
- Statement 2 is wrong: MSP is a floor, not a cap on market prices.
- (c) Both 1 and 2
- Both statements are wrong.
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.