| Which of the following factors are the main contributors for the persistent Food inflation? |
| 1. Growing income levels of people. |
| 2. Restrictive provisions of Agriculture Produce Marketing Committee Act (APMC) |
| 3. Multiple Layers of Intermediation |
| Select the correct answer using the codes given below: |
A) 1 and 3 only
B) 2 and 3 only
C) 1 and 2 only
D) 1, 2 and 3
Correct Answer: D
Solution :
[d] A heady mix of factors - from lack of investment in supply chain, increase in farm inputs as well as a tightly-regulated market - is behind the persistent food inflation India has witnessed over the past many years, according to analyses by experts. Recently, Reserve Bank of India (RBI) governor Raghuram Rajan sought to put blame primarily on states decisions to hike minimum support prices (MSP) frequently as primarily being the reason behind high food prices. The MSP (the rate at which states procure agricultural produce from farmers) for rice and wheat, for instance, has increased by more than 100 percent over the past 10 years. The governor also conceded that the widely-blamed initiative, the UPA's brainchild National Rural Employment Guarantee Scheme, also contributed at least 10 percent to high prices by raising rural wages.
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