Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Indian Economy:1950-1990

Question:

In the question given below, there are 2 statements marked as Assertion (A) and Reason (R). Choose the correct alternative from the following options.

Assertion (A)- Economists believe that subsidies should be given throughout to boost agricultural production in the country.

Reason (R)- Subsidies are meant to benefit the farmers but somehow, it indirectly benefits the chemical industry as well.

 

Options:

Both (A) and (R) are true and (R) is the correct explanation.

Both (A) and (R) are true but (R) is not the correct explanation of (A).

(A) Is true but (R) is false.

(A) Is false but (R) is true.

Correct Answer:

(A) Is false but (R) is true.

Explanation:

Some economists believe that subsidies should not be given throughout. They believe that once the technology has proven beneficial to the user and is widely adopted, the subsidies associated with it should be stopped. The reason behind the same is that these subsidies are majorly enjoyed by rich farmers and industrialists. A subsidy given on fertilizers benefits the farmers but a substantial amount of subsidy also benefits the fertilizer industry as well.