The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus (if any) paid to the farmers plus
A
transportation cost only
B
interest cost only
C
procurement incidentals and distribution cost
Correct answer
D
procurement incidentals and charges for godowns
Explanation
The correct option is (C) because the economic cost to the Food Corporation of India (FCI) is the total expenditure incurred to procure, store, and move food grains, which includes the MSP (plus bonus), procurement incidentals (like taxes, bagging, and labor), and distribution costs (comprising freight, storage, and administrative overheads). Option (D) is the most tempting wrong choice, but it is incomplete as it focuses only on storage charges while ignoring the significant transportation and administrative expenses covered under "distribution cost." The core concept being tested is the **Economic Cost of Foodgrains**, which is a critical factor in calculating India’s food subsidy bill.
Indian EconomyFood Security / Public Distribution System (PDS)economic costfood grainsFood Corporation of IndiaFCIMinimum Support PriceMSPbonusprocurement incidentalsdistribution cost