(i) "Although the subsidies play a crucial role in giving incentive to farmers to adopt modern agricultural technologies, they simultaneously impose a significant fiscal strain on the resources of the Government." Justify the given statement with valid argument. (ii) "The strategic sale of a public sector undertaking and the minority sale of its equity are both established instruments of disinvestment." Defend or refute, the given statement with valid arguments. (i) "The Industrial Sector has performed poorly in the reform period (1991)." Justify the given statement with valid argument. (ii) Mr. Ravi, an IT entrepreneur from Bengaluru, observed that several MNC's prefer India as their outsourcing Hub for services like software development, customer support, data management etc. His friend Priya believes this is due to certain inherent advantages of the Indian economy. In your opinion, state and explain any two factors that make India a preferred outsourcing destination.

Question

Accepted Answer

(i) **Fertilizer Subsidies:**

**In Favour:**
- Incentivize farmers to adopt modern agricultural technologies
- Reduce cost of production for farmers
- Increase agricultural productivity
- Ensure food security

**Against:**
- Impose significant fiscal strain on government resources
- Lead to overuse and wastage
- Benefit mainly large farmers
- Create market distortions
- Reduce incentive for efficient use

**Recommendation:** Subsidies should be targeted towards small and marginal farmers and gradually reduced for larger farmers.

(ii) **Commercialisation of Agriculture:**
- Growing crops for sale in market rather than for self-consumption
- Shift from subsistence farming to commercial farming
- Production of cash crops for export market
- Led to rise in prices of food grains
- Increased income for farmers but also increased vulnerability to market fluctuations