Consider the following statements about the debate over agricultural subsidies in India:
(A) Critics say that fertiliser subsidies are a huge burden on the government’s finances.
(B) Some economists say that a substantial amount of the fertiliser subsidy also benefits the fertiliser industry.
(C) Critics of subsidies say that, among farmers, the subsidy largely benefits farmers in the poorer regions.
(D) Supporters of subsidies say that if subsidies mostly benefit big farmers, the subsidies should be abolished.
(E) Critics say that the fertiliser subsidy does not benefit the target group.
How many of the above statements are correct?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Three
Some economists want fertiliser subsidies ended; others want them kept but aimed at poor farmers.
(A) Critics say that fertiliser subsidies are a huge burden on the government’s finances. — Correct. This is one of the critics’ points.
(B) Some economists say that a substantial amount of the fertiliser subsidy also benefits the fertiliser industry. — Correct. The money does not reach farmers alone.
(C) Critics of subsidies say that, among farmers, the subsidy largely benefits farmers in the poorer regions. — Incorrect. It largely benefits farmers in the more prosperous regions.
(D) Supporters of subsidies say that if subsidies mostly benefit big farmers, the subsidies should be abolished. — Incorrect. Supporters say the answer is not to abolish them but to make sure only poor farmers benefit.
(E) Critics say that the fertiliser subsidy does not benefit the target group. — Correct. Industry and richer farmers take much of it.
So (A), (B) and (E) are correct: three statements.
NCERT (2026-27): “2.3 Agriculture … Further, subsidies are meant to benefit the farmers but a substantial amount of fertiliser subsidy also benefits the fertiliser industry; and among farmers, the subsidy largely benefits the farmers in the more prosperous regions. Therefore, it is argued that there is no case for continuing with fertiliser subsidies; it does not benefit the target group and it is a huge burden on the government’s finances (see also Box 2.6). On the other hand, some believe that the government should continue with agricultural subsidies because farming in India continues to be a risky business. Most farmers are very poor and they will not be able to afford the required inputs without subsidies. Eliminating subsidies will increase the inequality between rich and poor farmers and violate the goal of equity. These experts argue that if subsidies are largely benefiting the fertiliser industry and big farmers, the correct policy is not to abolish subsidies but to take steps to ensure that only the poor farmers enjoy the benefits. …” |