Social Science (087) — AI-generated practice question

The government buys wheat and rice from farmers at a fair price (above market rate) and sells it at a subsidised rate to consumers through ration shops (fair price shops). This single policy serves two groups simultaneously:

• Farmers receive a guaranteed fair price for their produce, protecting them from market fluctuations and ensuring continued production.
• Consumers, especially the poor, get food grains at affordable prices, ensuring food security.

The government bears the financial cost — the difference between the purchase price and the subsidised selling price — as a food subsidy.

This is a public sector responsibility because:

• Private sector is profit-driven and would not sell below cost.
• Such large-scale subsidised distribution requires heavy spending beyond private capacity.
• It is the government's duty to support the poorest sections and ensure basic food and nutrition for all.

Source: Sectors of the Indian Economy, Ownership: Public and Private Sectors

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Examiners look for: (1) how farmers benefit, (2) how consumers benefit, (3) the concept of food subsidy as the government's financial burden, and (4) why private sector won't do this (profit motive vs. public welfare). Keep the answer structured — two to three tight paragraphs or bullet points work well. Avoid vague lines like "it helps everyone"; be specific about the mechanism (buy high, sell low, bear the difference). The source passage explicitly states "the government has to bear some of the cost" and "the private sector will not provide at a reasonable cost" — use these ideas directly.