Q. With reference to the Price Stabilization Fund (PSF), consider the following statements:
1.It was initially established under the Department of Consumer Affairs in 2014-15.
2.The PSF aims to moderate price volatility of agri-horticultural commodities such as onions, potatoes, and pulses.
3.The scheme involves creation of buffer stock to be released in a calibrated manner in the market.
Which of the statements given above is/are correct?
Quarterly-SFG-Jan-to-March
Red Book

[A] 1 and 2 only

[B] 2 and 3 only

[C] 1 and 3 only

[D] 1, 2 and 3

Answer: B
Notes:

Explanation:

  • The Price Stabilization Fund was initially set up in 2014–15 under the Department of Agriculture, Cooperation & Farmers Welfare (DAC&FW), not under the Department of Consumer Affairs. It was transferred to DOCA only in 2016.
  • PSF is specifically meant to moderate price volatility in perishable agri-horticultural items such as onions, potatoes, and pulses.
  • The fund facilitates creation of buffer stocks, which are strategically released into the market to stabilize prices.

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

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