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Economics · 2026 · 6 marks
CBSE 2026 · Region 1 · Set 3 · Q34
(i)“Although the subsidies play a crucial role in giving incentive to farmers to adopt modern agricultural technologies, they simultaneously impose a significant fiscal strain on the resources of the Government.”Justify the given statement with valid argument.(ii)“The strategic sale of a public sector undertaking and the minority sale of its equity are both established instruments of disinvestment.”Defend or refute, the given statement with valid arguments.(i)“The Industrial Sector has performed poorly in the reform period ($\displaystyle 1991$).”Justify the given statement with valid argument.(ii)Mr. Ravi, an IT entrepreneur from Bengaluru, observed that several MNC’s prefer India as their outsourcing Hub for services like software development, customer support, data management etc.His friend Priya believes this is due to certain inherent advantages of the Indian economy.In your opinion, state and explain any two factors that make India a preferred outsourcing destination.
(i)
“Although the subsidies play a crucial role in giving incentive to farmers to adopt modern agricultural technologies, they simultaneously impose a significant fiscal strain on the resources of the Government.”
Justify the given statement with valid argument.
(ii)
“The strategic sale of a public sector undertaking and the minority sale of its equity are both established instruments of disinvestment.”
Defend or refute, the given statement with valid arguments.
(i)
“The Industrial Sector has performed poorly in the reform period ($\displaystyle 1991$).”
Justify the given statement with valid argument.
(ii)
Mr. Ravi, an IT entrepreneur from Bengaluru, observed that several MNC’s prefer India as their outsourcing Hub for services like software development, customer support, data management etc.
His friend Priya believes this is due to certain inherent advantages of the Indian economy.
In your opinion, state and explain any two factors that make India a preferred outsourcing destination.
Marking-scheme solution
(A)(i) Subsidies play a vital role in encouraging farmers to adopt modern agricultural technologies as small and marginal farmers may not be able to afford expensive agricultural inputs without subsidies. However, subsidies also impose a heavy fiscal burden on the government. Large expenditure on subsidies diverts the resources available for other developmental activities like infrastructure, education and health.
(ii)
The given statement is defended. Both strategic and minority sale are the methods of disinvestment used by the government to reduce its ownership and encourage private participation. It leads to improved efficiency and better performance of public sector enterprises. Strategic sale involves transferring a significant share of government ownership along with management control to a private entity. Although minority sale refers to selling a limited portion of shares while the government retains control.
OR(B)(i) Industrial sector performed poorly in the reform period because of decreasing demand for industrial products due to various reasons such as cheaper imports, etc. Cheaper imports have, thus, replaced the demand for domestic goods. Moreover, the infrastructure facilities including power supply, remained inadequate due to lack of investment.
(ii)
India has emerged as a preferred outsourcing destination because of:
Expansion of Information Technology and Communication: Growth of fast modes of communication, particularly the growth of Information Technology (IT).
Availability of skilled manpower: Efficient and skilled manpower is available at a relatively affordable cost.
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CBSE Class 12 Economics past-paper question from the 2026board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.