CBSE 2025, Compartment, Set 1

Question

"Subsidies in the agriculture sector have been a debated question for long."
Validate the argument that subsidies should be gradually phased out in the agriculture sector.

Edvaya · Accepted Answer

The correct answer is Subjective. The continuation of massive agricultural subsidies is strongly debated. Many economists argue that they should be gradually phased out based on the following valid grounds: 1. **Misallocation of Benefits:** Empirical evidence indicates that subsidies (such as fertilizer subsidies) have inadvertently helped the massive fertilizer manufacturing industry much more than they have helped the actual needy, target farmers. 2. **Regional Inequality:** Farm subsidies have overwhelmingly benefited the rich, large-scale farmers operating in already prosperous regions (like Punjab and Haryana), rather than genuinely uplifting the poor and marginal farmers across the country. 3. **Fiscal Burden:** Agricultural subsidies have proven to be an enormously unsustainable burden on the overall finances of the government, drastically widening the fiscal deficit and leaving fewer funds for critical capital investments in rural infrastructure.

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Economics > Indian Economic Development > Development Experience 1947 1990

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