Q. With reference to the Open Market Sale Scheme (OMSS) undertaken by the Food Corporation of India (FCI), consider the following statements:
1.The scheme aims to enhance market supply of foodgrains and moderate open market prices.
2.Under OMSS, wheat is sold at prices lower than the Minimum Support Price (MSP) to attract buyers.
3.OMSS also helps in offloading surplus stock of foodgrains maintained by FCI.
Which of the statements given above is/are correct?
Quarterly-SFG-Jan-to-March
Red Book

[A] 1 and 2 only

[B] 1 and 3 only

[C] 2 and 3 only

[D] 1, 2 and 3

Answer: B
Notes:

Explanation:

  • OMSS is designed to increase the supply of foodgrains in the market, thereby moderating prices and improving availability.
  • As per the government policy, reserve prices are kept above the MSP, but below the economic cost, to prevent distortion in the harvest season while still making FCI stocks competitive. Thus, wheat is not sold below MSP.
  • OMSS serves to offload surplus stocks of wheat or other foodgrains that FCI holds beyond the buffer norm.

Source- 12th NCERT: Economics: Macroeconomics and TMH Indian Economy by Ramesh Singh

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