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

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Q: (IAS/2020)
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?

question_subject: 

Economics

question_exam: 

IAS

stats: 

0,186,108,45,39,24,186

keywords: 

{'minimum support price': [0, 0, 0, 3], 'msp': [0, 0, 0, 1], 'market price': [0, 0, 0, 2], 'procurement': [0, 0, 4, 2], 'india': [8, 1, 7, 13], 'ut': [2, 0, 1, 2]}

Option 1 suggests that the procurement of all cereals, pulses, and oil-seeds at the Minimum Support Price (MSP) is unlimited in every state/union territory of India. This is incorrect as procurement at MSP depends on various factors such as the availability of storage, logistics, and operational feasibility. It is not unlimited across all States/UTs.

Option 2 asserts that for cereals and pulses, the MSP is fixed so that the market price never exceeds it. This is also incorrect. MSP is set to ensure a guaranteed price to the farmer to promote agricultural production. However, it doesn`t guarantee that the market price will never rise above the MSP. The market price can be influenced by several factors, including demand and supply, quality, and other market forces.

Hence, neither statement 1 nor statement 2 is correct, making option 4 (Neither 1 nor 2) the right answer.

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