In India, which of the following can be considered as public investment in agriculture?
- 1.Fixing Minimum Support Price for agricultural produce of all crops
- 2.Computerization of Primary Agricultural Credit Societies
- 3.Social Capital development
- 4.Free electricity supply to farmers
- 5.Waiver of agricultural loans by the banking system
- 6.Setting up of cold storage facilities by the governments
Select the correct answer using the code given below:
Answer & explanation
Answer: (c) 2, 3 and 6 only
Public investment in agriculture means government spending that builds lasting capacity, such as institutions and infrastructure. Computerising PACS and building cold storage do this, whereas MSP, free electricity and loan waivers are price support or subsidies that add no new capacity.
- ✗ 1. MSP is a price-support instrument, not investment. NITI Aayog treats price support as a separate policy tool from subsidies and public investment.
- ✓ 2. Primary Agricultural Credit Societies are cooperative institutions, and public spending on cooperative institutions counts as public investment. Computerising them is a Government of India project with its own outlay, and it builds institutional capacity.
- ✓ 3. UPSC's official key treats this statement as correct; we could not confirm the detail from an official source, so we do not explain it here. It is a different kind of item from the price-support and subsidy options.
- ✗ 4. Free or cheap power to farmers is a subsidy; NITI Aayog lists power subsidy (borne by State Governments) among the major subsidies, not investments.
- ✗ 5. A loan waiver only writes off existing debt and creates no new asset or capacity; it is a fiscal relief measure, not investment.
- ✓ 6. Cold storage is physical post-harvest infrastructure that cuts wastage and raises farmers' realisation; government schemes finance it as infrastructure investment.
Remember · Public investment in agriculture = asset- and institution-building spending (irrigation, R&D, cooperatives, storage). MSP, free power and loan waivers are support or subsidies.
📘 Read it in NCERT: Class 12 Indian Society, Ch 5 (practise this chapter) · Class 11 Indian Economic Development, Ch 3 (practise this chapter)
Sources
- NITI Aayog, From Green Revolution to Amrit Kaal: Agriculture (2023), Section 1.6 Subsidies and Investments ↗ “The second policy instrument – public investment in agriculture – includes public expenditure on medium, major and minor irrigation, agriculture R&D and extension, cooperative institutions, and land and soil improvement programmes. … The other major subsidies provided to the agriculture sector are: interest subvention on institutional agricultural credit, subsidy on crop insurance and subsidy on power supply to agriculture (which is borne by State Governments).”
- PIB, Ministry of Cooperation: Primary Agriculture Cooperative Credit Societies ↗ “Centrally Sponsored Project for Computerization of PACS entails bringing all the functional PACS onto an ERP (Enterprise Resource Planning) based common national software, linking them with NABARD through State Cooperative Banks (StCBs) and District Central Cooperative Banks (DCCBs)”
- PIB, Ministry of Agriculture and Farmers Welfare: Agriculture Infrastructure Fund ↗ “Infrastructure such as warehouses, cold storage, sorting and grading units, and ripening chambers enhances farmers’ ability to access wider markets and improve value realization, thereby boosting their income.”
- NCERT Class 12 · Indian Society, Chapter 5 “social capital in the form of networks of contacts and social associations (Bourdieu 1986).”
- NCERT Class 11 · Indian Economic Development, Chapter 3 “public investment in agriculture sector especially in infrastructure, which includes irrigation, power, roads, market linkages and research and extension”
Question and answer: UPSC's official GS Paper I (2020, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 1 Oct 2026 (how we verify). ·