Subsidised price for PDS beneficiaries.
Explanation
The Indian food security system operates through the procurement of foodgrains by the Food Corporation of India (FCI) and their subsequent distribution via the Public Distribution System (PDS). This mechanism involves distinct pricing structures at the procurement and distribution stages to ensure both farmer support and food affordability for the poor.
Analysis of Options:
- Procurement price paid to farmers. is incorrect: The price at which the government (through agencies like the FCI) purchases foodgrains directly from farmers is known as the Minimum Support Price (MSP). This price is announced to insure farmers against a sharp fall in farm prices.
- Subsidised price for PDS beneficiaries. is correct: The Issue Price (specifically the Central Issue Price) is the price at which foodgrains are released by the Central Government to State Governments for distribution to beneficiaries under the PDS. This price is set lower than the economic cost of the grains to provide a subsidy to the consumer.
- Market price fixed for essential goods. is incorrect: The market price is determined by demand and supply forces or regulated via the Maximum Retail Price (MRP) mechanism for packaged goods. It is not synonymous with the Issue Price in the context of food security.
- Export price of foodgrains. is incorrect: The export price refers to the value at which goods are sold in international markets, often regulated by a Minimum Export Price (MEP) to ensure domestic availability, but it is unrelated to the PDS distribution price.
Key Takeaway:
MSP is the procurement price paid to the farmer, whereas Issue Price is the subsidized price charged from the PDS beneficiary. The difference between the Economic Cost incurred by the FCI and the Issue Price constitutes the food subsidy bill.