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Economics · 2026 · 6 marks
CBSE 2026 · Region 4 · Set 1 · Q33
(a) (i) “As per a few scholars, fertilizer subsidies should now be phased out, as they have served their purpose.” Do you agree with the given…
(a)(i)
“As per a few scholars, fertilizer subsidies should now be phased out, as they have served their purpose.”
Do you agree with the given statement ? Justify your answer with valid arguments.
(ii)
State any two ways by which the government can execute the step of disinvestment.
OR
(b)(i)
“During the $\displaystyle 1991$ economic reforms, the Government undertook a range of financial sector reforms which made a significant impact in the years to follow.”
Justify the given statement with valid arguments.
(ii)
State the name of any one Maharatna and any one Navratna company.
Marking-scheme solution
(i)
Yes. Subsidies are meant to benefit the farmers but a substantial amount of fertiliser subsidy also benefits the fertiliser industry; and among farmers, the subsidy largely benefits the farmers in the more prosperous regions. This limits the effectiveness of subsidies in reaching the intended beneficiaries. Additionally, such subsidies impose a heavy fiscal burden on the government. Therefore, phasing them out and adopting better-targeted support measures would be more efficient and equitable.
(ii)
The government can execute the step of disinvestment by:
withdrawal of the government from the ownership and management of the public sector companies.
outright sale of public sector companies.
(i)
The financial sector in India witnessed a major revamp under the economic reforms of 1991. The role of Reserve Bank of India (RBI) was changed from regulator to facilitator. This means that the financial sector was allowed to take decisions on many financial matters without consulting RBI. The policy changes led to the establishment of private sector banks, both Indian as well as foreign. Thus, these reforms enhanced efficiency, competitiveness and global integration of the Indian financial sector, contributing significantly to the overall growth and stability of the economy.
(ii)
Maharatna – Steel Authority of India Ltd. (SAIL)
Navratna – Hindustan Aeronautics Ltd. (HAL)
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CBSE Class 12 Economics past-paper question from the 2026 board exam, with the answer as CBSE’s own marking scheme gives it. Where our answers come from.