Aspirant Academy

Economy

Predicted Questions with Model Answers

Agriculture: Productivity, Land Reforms, Finance, Marketing, Food Security, Food Processing

Paper I · Unit 2 Section 9 of 11 0 PYQs 26 min
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Predicted Questions with Model Answers

Q1. [5 marks — 50 words] What is PM Fasal Bima Yojana (PMFBY)? State its key features.

Model Answer: PM Fasal Bima Yojana (PMFBY), launched February 2016, is India's flagship crop insurance scheme. Farmers pay low premiums: 2% for Kharif crops, 1.5% for Rabi crops, 5% for commercial/horticultural crops; the government subsidises the balance. Claims of Rs 1.64 lakh crore paid to farmers by 2023–24. It covers crop loss from natural disasters, pests, and weather-related risks.

Q2. [5 marks — 50 words] What is e-NAM? How does it benefit farmers?

Model Answer: e-NAM (Electronic National Agriculture Market), launched April 2016, is an online trading portal integrating 1,361 mandis across 23 states (by 2024). Farmers can access price discovery across markets remotely; buyers compete transparently online. It reduces the monopoly of local traders, ensures better prices, lowers transaction costs, and enables farmers to sell beyond their local APMC, with cumulative trade exceeding Rs 3.07 lakh crore.

Q3. [5 marks — 50 words] What is the National Food Security Act 2013? Who does it cover?

Model Answer: The National Food Security Act (NFSA) 2013 provides legal entitlement to subsidised foodgrains to 81.35 crore people (67% of India's population) — 75% rural and 50% urban. Beneficiaries receive up to 5 kg grains/person/month (rice Rs 3/kg, wheat Rs 2/kg). Since January 2024 (PMGKAY merger), NFSA entitlements are provided free of cost for 5 years.

Q4. [10 marks — 150 words] Discuss the status of land reforms in India. Why did they remain incomplete?

Model Answer: Post-independence land reforms in India had four pillars: abolition of zamindari/intermediaries, tenancy reforms, land ceiling legislation, and consolidation of fragmented holdings.

Achievements: Zamindari abolition (1952–56) transformed 2 crore tenants into direct landholders. Security of tenure was provided to tenants. Ceiling legislation redistributed an estimated 1.26 crore acres to 56 lakh families. Rajasthan implemented the Land Reforms and Jagir Resumption Act (1952) effectively.

Incomplete aspects — causes: First, ceilings were often set too high and subjected to numerous exemptions (religious trusts, orchards, public companies). Second, benami transactions allowed rich landowners to split holdings fictitiously among family members. Third, powerful landowning castes used political influence to delay or dilute implementation. Fourth, legal challenges and court-granted stays slowed redistribution. Fifth, women's land rights remained neglected — 87% holdings still in male names (Agriculture Census 2015–16). Sixth, consolidation of fragmented holdings succeeded only in Punjab and Haryana, not in Bihar or eastern India.

The result: land inequality persists. Gini coefficient for land distribution is ~0.74 (2015–16), far higher than income inequality. Modern reforms like Svamitva Scheme (2020) digitising property rights offer fresh impetus but do not address redistribution.

Q5. [10 marks — 150 words] Explain India's food processing sector. What are the key government initiatives to promote it?

Model Answer: India's food processing sector is the world's fifth-largest in production, consumption, and exports. It contributes ~8.4% of manufacturing GVA and ~13% of India's total exports. Despite its size, only ~2.2% of agricultural output is processed — compared to 40% in China and 70% in USA — indicating enormous untapped potential.

The Ministry of Food Processing Industries (MoFPI) leads development through PM Kisan Sampada Yojana (PMKSY), launched 2017. Its components include Mega Food Parks (25 sanctioned, each with Rs 50 crore grant), integrated cold chain infrastructure, backward-forward linkage projects, and food safety infrastructure. By 2024, PMKSY has created 36.8 lakh MT additional processing capacity and 7.8 lakh jobs.

The Production Linked Incentive (PLI) Scheme for Food Processing (2021, Rs 10,900 crore) targets ready-to-eat, marine, organic, and innovative food products, with 175+ approved companies projecting Rs 33,494 crore in sales.

One District One Product (ODOP) promotes district-specific food products for processing and exports. Key challenges remain: inadequate cold chain infrastructure (India needs 10,000+ cold storage units), lack of standardisation, and skill gaps in food technology. Addressing these through targeted investment can double farmer incomes and reduce post-harvest losses (currently 15–30% of produce).

Q6. [5 marks — 50 words] What is Minimum Support Price (MSP)? How is it determined?

Model Answer: Minimum Support Price (MSP) is the government-guaranteed floor price for 23 agricultural commodities, preventing farmers from distress sales when market prices fall. CACP (Commission for Agricultural Costs and Prices) recommends MSP annually, using three cost concepts: A2 (paid-out costs), A2+FL (family labour included), and C2 (comprehensive including land rent). Swaminathan Commission recommended C2+50% as MSP — a demand farmers continue to press for legal guarantee.