UPSC IAS Prelims 2021: Important Questions on Economics – Topic 5 (Indian Agriculture)

UPSC IAS Prelims 2021: Important Questions on Economics – Topic 5 (Indian Agriculture) : India is the second-largest producer of wheat and rice, the world’s major food staples. India is currently the world’s second-largest producer of several dry fruits, agriculture-based textile raw materials, roots and tuber crops, pulses, farmed fish, eggs, coconut, sugarcane, and numerous vegetables. More Indians depend directly or indirectly on agriculture for employment than on any other sector. It contributes a major part of India’s economic growth. Hence, it is essential for UPSC aspirants to prepare this section with utmost dedication, not just from a geographical perspective but also from an economic perspective. To help the aspirants in their preparation, we have provided the 10 most important questions from the Indian Agriculture topic of Economics for UPSC IAS Prelims 2021 preparation.

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Ques 1: Which one of the following agencies is not included in the operation of the Kisan Credit Cards?

(a) Co-operative Banks

(b) Regional Rural Banks

 (c) Scheduled Commercial Banks


Ans: d


The credit is available to farmers in most of the banks like commercial banks cooperative banks and regional rural banks. However in day-to-day operations, NABARD is not included.

Ques 2: Which one among the following Agricultural sectors is covered under the market intervention scheme (MIS) of the Government?

(a) Forestry

(b) Irrigation

© Horticulture

(d) Animal Husbandry

Ans: c


Market Intervention Price Scheme is a price support mechanism implemented on the request of State Governments. It is for the procurement of perishable and horticultural commodities in the event of a fall in market prices.

Ques 3: The price at which the Government purchases food grains for maintaining the public distribution system and for building up buffer stocks are known as

(a) Minimum support prices

(b) Procurement prices

(c) Issue prices

(d) Coiling prices

Ans: b


Procurement price of a commodity refers to the price at which govt. procures the commodity from producers/manufactures for maintaining the buffer stock or the public distribution system.

Ques 4: Which one of the following states is the first state to impose Agriculture Income Tax in India?

(a) Madhya Pradesh

(b) Uttar Pradesh

(c) West Bengal

(d) Bihar

Ans: d


Bihar is the first state to impose agricultural income tax in India. Agricultural income tax is levied on the income from Agriculture. At present agriculture is subjected to two direct taxes and they are Agricultural Income-tax and Land Tax. They are levied by the state governments. Bihar was the first state in India to levy a tax on agricultural income in 1938.

Ques 5: Consider the following statements:

  1. Food Corporation of India (FCI) was set up in the year 1965.
  2. Agriculture Finance Corporation assigns the Agricultural Income Tax to states in India.

Which of the following statements is/are correct?

(a) 1 only

(b) 2 only

(c) Both 1 and 2

(d) Neither 1 nor 2

Ans: a


Finance Commission assign the Agricultural Income Tax to states in India.

Ques 6: Which agency is responsible for procurement, distribution, and storage of food grain production in India?

(a). Ministry of Agriculture

(b). Food Corporation of India

(c). NAFED


Ans: b


“Food Corporation of India” is responsible for “distribution and storage of the food grain in India”. It was structured under the Food Corporation Act of 1964 with the following objectives: Explanation: Guarantee minimal prices for agricultural products. Mar 19, 2019

Ques 7: Which one of the following co-operative societies is responsible for the production of fertilizers?



(c) NCDC


Ans: b


Indian Farmer Fertilizer cooperative Ltd (IFFCO) is the co-operative society responsible for the production of fertilizers.

Ques 8: Who approves the Fair and Remunerative Price (FRP) of sugarcane?

(a). Cabinet Committee on Economic Affairs

(b). Commission for Agricultural Costs and Prices

(c). Directorate of Marketing and Inspection, Ministry of Agriculture

(d). Agricultural Produce Market Committee

Ans: a


Cabinet Committee on Economic Affairs (CCEA) approves the Fair and Remunerative Price of sugarcane payable by sugar mills for the sugar season.

Ques 9: What is the correct descending order of the following top rice-producing states in India?

  1. West Bengal
  2. Odisha
  3. Punjab
  4. Uttar Pradesh

Select the correct code:

(a). Punjab, West Bengal, Uttar Pradesh, and Odisha

(b). Punjab, West Bengal, Odisha, and Uttar Pradesh

(c). Punjab, West Bengal, Odisha Pradesh, and Uttar Pradesh

(d). West Bengal, Uttar Pradesh, Punjab, and Odisha

Ans: d


S. No. States Production            (Million Tonnes), 2016-17

1 West Bengal –                             15.3

2 Uttar Pradesh                               13.75

3 Punjab                                           11.59

4 Odisha                                             8.33

5 Bihar                                             8.24

Ques 10: Which of the following is/are a commercial crop in India?

  1. Mustard
  2. Tobacco
  3. Jute
  4. Wheat

Select the correct code:

(a) 2 and 3 only

(b) 1 and 2 only

(c) 1, 2 and 3 only

(d) 2, 3 and 4 only

Ans:  c


A commercial crop is an agricultural crop which is grown for sale to return a profit. It is typically purchased by parties separate from a farm.

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