IGNOU CFN 3 2018 - What are the different components of food subsidy? Explain each in bri

Question

What are the different components of food subsidy? Explain each in brief.

07 Mar 2018

Answer :

Word Count : 327

Ddifferent components of food subsidy

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Economic Costs

The economic cost of foodgrains to Food Corporation of India (FCI) is of strategic importance as it has direct impact on foo d subsidy. The minimum support price (MSP) is one of the major components of economic costs and accounts for about 70 per cent of FCI’s economic cost of foodgrains while share of procurement incidentals and distribution costs is about 30 per cent (Sharma, 2012). However, FCI has no control on MSP as well as on large number of other cost items of procurement incidentals and distribution costs. These aspects are examined in this section to explore the possibility

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