Welcome to the NCERT Solutions for Class 11 Economics - Indian Economic Development - Chapter Indian Economy 1950-1990. This page offers a step-by-step solution to the specific question from Exercise 1, Question 14: . With detailed answers and explanations for each chapter, students can strengthen their understanding and prepare confidently for exams. Ideal for CBSE and other board students, this resource will simplify your study experience.
While subsidies encourage farmers to use new technology, they are a huge burden on government finances. Discuss the usefulness of subsidies in the light of this fact.
Subsidy means availing some important inputs to farmers at a concessional rate that is much lower than its market rate. During the 1960s, in order to adopt new technology HYV seeds and use of modern fertilisers and insecticides, farmers were provided inputs at a subsidised rate. Thus, the public sector role was needed to invest heavily, so as to raise the income of people that will in turn raise the demand and so on. The following arguments are given in favour of subsidy:
1) Subsidy is very important for marginal land holders and poor farmers who cannot avail the essential farm inputs at the ongoing market rate.
2) Subsidy in the 1960s was basically an incentive for the farmers to adopt modern techniques and vital inputs like fertilisers, HYV seeds, etc. The subsidy was mainly of convincing and lucrative nature so that the farmers do not hesitate to use these modern techniques.
3) Subsidy is generally provided to the poor farmers with the motive of reducing inequality of income between rich and poor farmers and to promote an egalitarian distribution of income.
4) It is argued that the adoption of new technology and techniques are not risk free and only daring farmers are only willing to adopt them.
The following arguments are given against subsidy:
1) It is generally argued that subsidy favours and benefits fertiliser industries more than the farmers. Subsidies provide a protective shield against the market conditions and, consequently, these industries need not to bother about their market share and competition.
2) Subsidies are also enjoyed by the potential farmers who do not need them. This often leads to the misallocation and wastage of the scarce resources.
3) Subsidies, if provided at a much lower rate than the market rate may lead to the wastage of resources. For example, subsidised electricity leads to the wastage of energy.
4) There is a general consensus that in order to assess the benefit and feasibility of a particular technique, subsidy should be provided but once the performance has been judged subsidies should be stopped. Hence, based on the above pros and cons, we can conclude that although subsidies are very useful and necessary for poor farmers and to overcome uncertainties associated with farming, it put an excessive burden on the scarce government finances. Thus, a proper planning, suitable reforms and allocation of subsidies only to the needy farmers is required.
Match the following:
|
1. Prime Minister 3. Quota 4. Land Reforms 5. HYV Seeds 6. Subsidy |
A. Seeds that give large proportion of output C. Chairperson of the planning commission D. The money value of all the final goods and services produced within the economy in one year. E. Improvements in the field of agriculture to increase its productivity F. The monetary assistance given by government for production activities. |
NCERT questions are designed to test your understanding of the concepts and theories discussed in the chapter. Here are some tips to help you answer NCERT questions effectively:
Stay updated with our latest educational content and study tips
Parent-Teacher Meetings (PTMs) are more than quick updates on marks — they’re a chance to build a real partnership between home and school. A good Parent-Teacher Meeting conversation helps parents see beyond grades. It opens up insights about a child’s strengths, struggles, emotions and even hidden talents. When parents participate actively, they don’t just track […]
Read MoreIn today’s world of endless information , knowing how to think is more important than knowing what to think . From school projects to real – life decisions , critical thinking helps students question ideas , analyze facts and form logical conclusions . But what exactly does critical thinking mean ? Simply put , it’s […]
Read MoreEvery student dreams of better grades , stronger focus and more study time – but the real challenge isn’t starting, it’s staying consistent . Building productive study habits is not about studying all day , it’s about studying smart . In today’s fast – paced digital world, distractions are everywhere – from endless phone notifications […]
Read MoreOnline gaming has rapidly become one of the most popular pastimes among children. Whether it’s multiplayer mobile games , PC adventures or console challenges , kids are spending more time than ever in the virtual world . On the surface, gaming seems entertaining and even educational – improving hand- eye coordination , teamwork and problem […]
Read MoreWelcome to the NCERT Solutions for Class 11 Economics - Indian Economic Development - Chapter . This page offers a step-by-step solution to the specific question from Excercise 1 , Question 14: While subsidies encourage farmers to use new technology, they are a huge burden on government financ....
Add Comment