Which one of the following factors is not considered in deter- mining the Minimum Support Price (MSP) in India?

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Q: (CDS-II/2019)

Which one of the following factors is not considered in deter- mining the Minimum Support Price (MSP) in India?

question_subject: 

Economics

question_exam: 

CDS-II

stats: 

0,101,83,19,44,101,20

keywords: 

{'price trends': [0, 0, 0, 1], 'minimum support': [0, 0, 0, 1], 'msp': [0, 0, 0, 1], 'india': [8, 1, 7, 13], 'domestic markets': [0, 0, 0, 1], 'cost': [2, 1, 2, 10], 'production': [16, 4, 20, 51], 'factors': [0, 0, 1, 0], 'price': [0, 3, 1, 12]}

The Minimum Support Price (MSP) in India is the minimum price at which the government purchases agricultural commodities from farmers. It is a crucial factor in ensuring the income security of farmers. While determining the MSP, several factors are taken into consideration.

Option 1: Cost of production is an important factor considered in determining the MSP. It includes costs such as seeds, fertilizers, labor, and machinery.

Option 2: Price trends in international and domestic markets play a significant role in deciding the MSP. The government considers the demand and supply dynamics, global market trends, and price fluctuations while determining the MSP.

Option 3: The correct answer is option 3. The cost of living index is not considered in determining the MSP. The MSP is primarily based on the cost of production and market price considerations.

Option 4: Inter-crop price parity is another factor considered in determining the MSP. It ensures that farmers are not discouraged from growing one crop over another due to price differentials.

In summary, while several factors are considered in determining the MSP, the cost of living index is not one of them. The MSP is primarily influenced by the cost of production and market price trends.