Kamla, a cotton farmer, once sold her crop to a government agency at an agreed price and paid less for fertiliser. After liberalisation, farming no longer gives her a decent living. Which explanation fits this change?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Government interference in markets is opposed, so support prices and subsidies were reduced or withdrawn.
Option (1) Tariffs and import duties were raised, so the fertiliser and diesel she buys became costlier. — Incorrect. Liberalisation brings a reduction in tariffs and import duties so that foreign goods can be imported more easily. The option reverses this policy, and Kamla's costs rose because her fertiliser subsidy was cut.
Option (2) Government interference in markets is opposed, so support prices and subsidies were reduced or withdrawn. — Correct. Liberalisation is against government interference in markets, so support prices and subsidies are reduced or withdrawn. Kamla loses the agreed price for her cotton and pays more for fertiliser, so farming no longer gives her a decent living.
Option (3) Government controls over wages and prices were tightened, so her crop is sold at a fixed low price. — Incorrect. Marketisation removes government controls over wages and prices. The option reverses this, and Kamla's loss comes from losing the price at which the government agreed to buy her crop.
Option (4) Agricultural imports were stopped to protect growers, so cheaper foreign fertiliser is no longer available. — Incorrect. Under liberalisation the import of agricultural products is allowed, and Indian farmers now face competition from farmers in other countries. The option reverses this, since imports were opened up.
NCERT (2026-27): “Debate on Liberalisation – Market Versus State … |