The economic cost of food grains to the Food Corporation of India is Minimum Support Price and bonus if any) paid to the farmers plus
- A transportation cost only
- B interest cost only
- C procurement incidentals and distribution cost
- D procurement incidentals and charges for godowns
Show Answer
The correct answer is C.
Transportation cost only:
- Transportation is only one component of economic cost to FCI. As per the FCI Annual Report, it also incurs costs on storage, handling, interest etc.
Interest cost only:
- While interest cost is part of economic costs, FCI also incurs major operational expenditures like handling, storage and distribution where substantial public resources are utilized.
Procurement incidentals and distribution costs:
- As per the latest FCI Annual Report, after MSP its major expenditures are on procurement incidentals and distribution costs like loading, unloading, packaging etc. These reflect key operational costs.
Procurement incidentals and godown charges:
- Godown/storage charges are separate from incidentals as per FCI expenditure accounting norms.

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