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Economics · 2024 · 6 marks
Liberalisation, Privatisation and Globalisation: An AppraisalLiberalisation6 marksAnalyselong answer
CBSE 2024 · Region 1 · Set 1 · Q33
(a) (i) “Under the liberalisation measures taken by the Government of India, regulation of industrial sector was extremely crucial.” Reject or…
(i)
“Under the liberalisation measures taken by the Government of India, regulation of industrial sector was extremely crucial.”
Reject or support the given statement with valid arguments.
(ii)
“Despite the implementation of Green Revolution, $\displaystyle 65$ per cent of India’s population continued to be engaged in the agriculture sector till the 1990s.”
Justify the given statement with valid explanation.
(i)
“Every coin has two sides — debate over farm subsidies is one such classic example of the same.”
Justify the given statement with two arguments each in favour of and against the continuation of the farm subsidies.
(ii)
State the importance of “Growth with equity” as the objective of Indian economic planning.
Marking-scheme solution
(i)
The given statement is rejected. As the liberalisation measures curtailed many restrictions on the industrial sector.
Industrial licensing was abolished for almost all except for three industries. Many goods produced by Small Scale Industries were dereserved. In most of the industries, market has been allowed to determine the prices independently. This was necessitated by the slower industrial growth rate under the pre-reform period.
(ii)
Some economists argue that Green Revolution did not make much impact on the occupational structure of the country, as $\displaystyle 65$% of India’s population continued to find its livelihood in agriculture. A major reason for this fairly large proportion of population in agricultural sector as the industrial and service sector were not able to absorb the people working in the agricultural sector.
(i)
The introduction of farm subsidies had been an opinionated step taken by the Government of India.
Arguments in favour of continuing farm subsidies:
Eliminating subsidies may increase inequalities of income between rich and poor farmers.
Most farmers (small and marginal) may not be able to afford expensive agricultural inputs without subsidies.
Arguments against farm subsidies:
It is often argued that farm subsidies have helped the fertilizer industry much more than helping the needy farmers.
Economists argue that subsidies are a huge burden on government’s finances.
(ii)
For a nation, both growth of Gross Domestic Product (GDP) and equity in distribution of income are equally important. Growth refers to an increase in a country’s capacity to produce goods and services. Equity refers to reductions in inequality of income and wealth.
Growth with equity ensures that the fruits of economic development are enjoyed by all sections of society equitably. Hence, achieving equitable growth is an important objective that was taken into consideration in the Indian economic planning.
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