UPSC 2020EconomyModerate

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 :

A
1, 2 and 5 only
B
1, 3, 4 and 5 only
C
2, 3 and 6 only
Correct Answer
D
1, 2, 3, 4, 5 and 6

Explanation

Option (c) is correct because public investment in agriculture refers to capital formation that creates long-term productive assets, such as computerizing credit societies (2), building social capital (3), and establishing cold storage infrastructure (6). Option (d) is the most tempting wrong choice, but it incorrectly includes subsidies and transfer payments like MSP (1), free electricity (4), and loan waivers (5), which are revenue expenditures that do not result in the creation of new physical or human capital. The core concept tested is the economic distinction between "Public Investment" (asset creation) and "Subsidies/Transfer Payments" (consumption support).

Agricultural Economics / Public FinanceGovernment expenditure and investment in agriculturePublic investmentagriculturecomputerizationPACSSocial Capital developmentfree electricity supplyagricultural loan waivercold storage facilities

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