In India, which of the following can be considered as public investment in agriculture?Fixing Minimu

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UPSC Prelims is a competitive examination conducted in India. This question is from the 2020 UPSC Prelims Economy paper.

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This UPSC Prelims 2020 Economy question has a medium difficulty level and is marked as an important question.

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Question

In India, which of the following can be considered as public investment in agriculture?Fixing Minimum Support Price for agricultural produce of all crops.Computerization of Primary Agricultural Credit SocietiesSocial Capital developmentFree electricity supply to farmersWaiver of agricultural loans by the banking systemSetting up of cold storage facilities by the governments.Select the correct answer using the code given below:

Accepted Answer

Correct Answer: C — 2, 3 and 6 onlyStep-by-step Solution:Public investment in agriculture refers to government spending that creates capital assets or enhances productive capacity, not subsidies or transfer payments.1. MSP: Not investment; it is a price support mechanism. ✗2. Computerisation of PACS: Yes, it creates digital infrastructure and improves credit delivery efficiency. ✓3. Social capital development: Broad concept including farmer training, self‑help groups, extension services — considered investment in human and institutional capital. ✓4. Free electricity: A subsidy, not investment. ✗5. Loan waiver: A relief measure, not investment; it does not create assets. ✗6. Cold storage facilities: Government‑built cold storage creates physical capital, reduces post‑harvest losses. ✓Why other options are incorrect:Option A (1,2,5): 1 and 5 are not investment.Option B (1,3,4,5): 1,4,5 not investment.Option D (All six): Several are not investment.Key Concept: Public investment in agriculture includes R&D, irrigation infrastructure, market infrastructure (e‑NAM), and extension services. The government has launched the Agriculture Infrastructure Fund (2020) to support investment in post‑harvest infrastructure.

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