Which of the following statements is/are correct regarding the Minimum Support Price (MSP) framework in India?
1. The MSP is announced by the Cabinet Committee on Economic Affairs (CCEA) based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).
2. The current policy mandates fixing the MSP at a minimum of 1.5 times the comprehensive 'C2' cost of production.

Question

Accepted Answer

A) 1 only — Statement 1 is correct; the CACP recommends the MSP and the CCEA approves it. Statement 2 is incorrect because the government currently uses the 'A2+FL' cost formula (actual costs plus unpaid family labour) to calculate the 1.5 times return, not the comprehensive 'C2' cost (which includes imputed rent on owned land and interest on fixed capital).

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