Consider the following statements regarding the Public Distribution System (PDS) prices: 1. The price at which foodgrains are distributed through ration shops is known as the Issue Price. 2. The Issue Price is generally higher than the prevailing market price. 3. Under the Targeted PDS (TPDS), a differential price policy was adopted for poor and non-poor. Which of the following statements are correct ?

The correct option is (c) 1 and 3 only Explanation The Public Distribution System (PDS) is a mechanism for food security and poverty alleviation. The government procures foodgrains from farmers at the Minimum Support Price (MSP) and distributes them to beneficiaries through Fair Price Shops (FPS) at a subsidized rate known as the Central Issue Price (CIP). Statement-wise Analysis: - Statement 1 is Correct: The price at which foodgrains are made available to consumers through the network of ration shops (Fair Price Shops) is officially known as the Issue Price. This price is determined by the Central Government. - Statement 2 is Incorrect: The fundamental purpose of the PDS is to provide essential commodities to the poor at affordable rates. Therefore, the Issue Price is significantly lower than the prevailing market price. The difference between the economic cost of foodgrains (procurement + distribution costs) and the Issue Price constitutes the food subsidy bill. - Statement 3 is Correct: The Targeted Public Distribution System (TPDS), introduced in 1997, shifted the focus from a universal system to a targeted one. It adopted a differential price policy, distinguishing between households Below Poverty Line (BPL) and Above Poverty Line (APL). BPL households were offered foodgrains at heavily subsidized rates, while APL households received them at rates closer to the economic cost. Key Takeaway: The Issue Price is the subsidized rate for PDS distribution and is lower than the market price. The TPDS introduced structural changes by categorizing beneficiaries into poor (BPL) and non-poor (APL) with distinct pricing structures for each.

NCERT Class 9 Economics — Chapter 4: Food Security in India

mcqeasy

Consider the following statements regarding the Public Distribution System (PDS) prices:

The price at which foodgrains are distributed through ration shops is known as the Issue Price.
The Issue Price is generally higher than the prevailing market price.
Under the Targeted PDS (TPDS), a differential price policy was adopted for poor and non-poor.

Which of the following statements are correct ?

Official previous-year question

Verified 1 Aug 2026.

Options

A1 only
B2 only
C1 and 3 only
D1, 2 and 3

Did you get this right?

Solution

The correct option is (c) 1 and 3 only

Explanation

The Public Distribution System (PDS) is a mechanism for food security and poverty alleviation. The government procures foodgrains from farmers at the Minimum Support Price (MSP) and distributes them to beneficiaries through Fair Price Shops (FPS) at a subsidized rate known as the Central Issue Price (CIP).

Statement-wise Analysis:

Statement 1 is Correct: The price at which foodgrains are made available to consumers through the network of ration shops (Fair Price Shops) is officially known as the Issue Price. This price is determined by the Central Government.
Statement 2 is Incorrect: The fundamental purpose of the PDS is to provide essential commodities to the poor at affordable rates. Therefore, the Issue Price is significantly lower than the prevailing market price. The difference between the economic cost of foodgrains (procurement + distribution costs) and the Issue Price constitutes the food subsidy bill.
Statement 3 is Correct: The Targeted Public Distribution System (TPDS), introduced in 1997, shifted the focus from a universal system to a targeted one. It adopted a differential price policy, distinguishing between households Below Poverty Line (BPL) and Above Poverty Line (APL). BPL households were offered foodgrains at heavily subsidized rates, while APL households received them at rates closer to the economic cost.

Key Takeaway:
The Issue Price is the subsidized rate for PDS distribution and is lower than the market price. The TPDS introduced structural changes by categorizing beneficiaries into poor (BPL) and non-poor (APL) with distinct pricing structures for each.

Your note

More from Chapter 4: Food Security in India

Match List I with List II and select the correct answer using the code given below: List I (Term) | List II (Definition) A. Buffer Stock | 1. Pre-announced price paid to farmers B. Minimum Support Price | 2. Payment to producer to supplement market price C. Issue Price | 3. Price lower than market price for distribution D. Subsidy | 4. Stock of foodgrains procured by government

easy

Consider the following statements regarding the Antyodaya Anna Yojana (AAY): 1. It was launched in December 2000. 2. It targeted all families living below the poverty line without any specific focus. 3. The scheme provided foodgrains at prevailing market rates. Which of the following statements are correct ?

easy

Which of the following statements correctly describes the role of cooperatives in food security in India? 1. In Tamil Nadu, around 94 % of fair price shops are run by cooperatives. 2. Mother Dairy provides milk and vegetables at controlled rates in Delhi. 3. The Academy of Development Science (ADS) has facilitated a network of NGOs for setting up Grain Banks in Maharashtra.

medium

Consider the following statements about the 'Annapurna Scheme' (APS): 1. It was launched in the year 2000. 2. Its target group is indigent senior citizens. 3. Under this scheme, 10 kg of foodgrains are provided free of cost. Which of the following statements are correct ?

medium

Which of the following factors has contributed to the decline of the Public Distribution System (PDS) in recent years? 1. Diverting grains to the open market by PDS dealers. 2. Selling poor quality grains at ration shops. 3. The small difference between the price of PDS items for APL families and the open market price. 4. Irregular opening of ration shops.

medium

Keep practising Chapter 4: Food Security in India

Work through every question from this NCERT chapter.

Browse all NCERT Class 9 Economics chapters

The correct option is (c) 1 and 3 only

Explanation

Statement-wise Analysis:

Statement 1 is Correct: The price at which foodgrains are made available to consumers through the network of ration shops (Fair Price Shops) is officially known as the Issue Price. This price is determined by the Central Government.
Statement 2 is Incorrect: The fundamental purpose of the PDS is to provide essential commodities to the poor at affordable rates. Therefore, the Issue Price is significantly lower than the prevailing market price. The difference between the economic cost of foodgrains (procurement + distribution costs) and the Issue Price constitutes the food subsidy bill.
Statement 3 is Correct: The Targeted Public Distribution System (TPDS), introduced in 1997, shifted the focus from a universal system to a targeted one. It adopted a differential price policy, distinguishing between households Below Poverty Line (BPL) and Above Poverty Line (APL). BPL households were offered foodgrains at heavily subsidized rates, while APL households received them at rates closer to the economic cost.