Which of the following factors/policies were affecting the price of rice in India in the recent past?
- 1.Minimum Support Price
- 2.Government's trading
- 3.Government's stockpiling
- 4.Consumer subsidies
Select the correct answer using the code given below:
Answer & explanation
Answer: (d) 1, 2, 3 and 4
All four affect rice prices. The Government assures MSP, the Food Corporation of India (FCI) holds buffer stocks and also sells rice in the open market, and subsidised grain through the Public Distribution System (PDS) changes what consumers pay.
- ✓ 1. MSP is an assured price for agricultural products, including paddy, and works as a floor for the rice price.
- ✓ 2. The Government trades in rice itself: in 2020-21, up to 9 December 2020, FCI sold 11.02 lakh tonnes of rice in the open market under the Open Market Sale Scheme (Domestic) to moderate prices.
- ✓ 3. FCI maintains buffer stocks of wheat and rice; buying for and releasing from these stocks changes market supply.
- ✓ 4. Foodgrains distributed through the PDS are provided at a subsidised rate to the poor, which shapes demand and prices of rice.
Remember · MSP, FCI buffer stocks, government open-market sales and subsidised PDS grain all shape rice prices in India.
📘 Read it in NCERT: Class 11 Indian Economic Development, Ch 5 (practise this chapter) · Class 11 Indian Economic Development, Ch 5 (practise this chapter)
Sources
- NCERT Class 11 · Indian Economic Development, Chapter 5 “policy instruments like (i) assurance of minimum support prices (MSP) for agricultural products (ii) maintenance of buffer stocks of wheat and rice by Food Corporation of India and (iii) distribution of food grains and sugar through PDS.”
- NCERT Class 11 · Indian Economic Development, Chapter 5 “These instruments are aimed at protecting the income of the farmers and providing foodgrains at a subsidised rate to the poor.”
- PIB, Year End Review 2020: Department of Food and Public Distribution ↗ “Through Open Market Sale Scheme (Domestic) (OMSS(D)) 2020-21, a total quantity of 7.10 Lakh MT of wheat and 11.02 Lakh MT of rice have been sold in the open market till 2nd tender of December, 2020”
Question and answer: UPSC's official GS Paper I (2020, Series A) — paper ↗ · answer key ↗. Explanation: Minimalist IAS, checked 30 Sept 2026 (how we verify). ·