Explanation –

Statements 1 and 2 are correct. The Indian government sets the Fair and Remunerative Price (FRP) for sugarcane each sugar season. The FRP is the minimum price that sugar mills are legally required to pay sugarcane farmers. The Commission for Agricultural Costs and Prices (CACP) recommends the FRP, which is then approved by the Cabinet Committee on Economic Affairs. The FRP aims to ensure fair compensation for farmers while maintaining the financial viability of sugar mills. In addition to the Fair and Remunerative Price (FRP) set by the central government, some Indian states also set their own minimum prices for sugarcane, known as State-Advised Prices (SAPs). These SAPs are typically set to address regional differences in production costs and to provide additional support to sugarcane farmers in those states. In states where SAPs are applicable, sugar mills are required to pay the higher of the FRP or SAP to the farmers. The Reserve Bank of India (RBI) has a reference range for inflation, specifically targeting an inflation rate of 4% with a tolerance band of +/- 2%, effectively setting the range between 2% and 6%.

Source: The Hindu