RAS question
The MSP is fixed at 1.5 times the production cost as per which budget announcement?
Correct answer: (B) Union Budget 2018-19.
The commitment to fix MSP at 1.5 times the cost of production was announced in Union Budget 2018-19.
Explanation
Union Budget 2018-19 is the relevant announcement because it set the principle that MSP should be kept at one-and-a-half times the cost of production. The PIB release links that Budget commitment to later MSP increases for Kharif and Rabi crops, stating that the Government increased MSP in line with fixing it at 1.5 times production cost. It also explains the institutional context: MSPs are fixed on the basis of recommendations from the Commission for Agricultural Costs and Prices, after considering state government and ministry views, cost of production and other market factors. So the question is testing the Budget announcement behind the 1.5x MSP formula, not a later year in which MSPs were revised.
Why the other options are wrong
- (A) Union Budget 2016-17 is not the cited Budget announcement for the 1.5-times-production-cost MSP principle.
- (C) Union Budget 2020-21 came after the PIB-cited 2018-19 announcement and is not the source of this MSP formula commitment.
- (D) Union Budget 2025-26 is unrelated to the cited PIB explanation, which traces the 1.5x MSP principle to Union Budget 2018-19.
Concept
This tests agricultural price policy, especially the Budget-linked MSP framework and the role of CACP. It recurs in RAS because MSP connects farmer income, fiscal policy and rural economy questions.