The value of the ruble declined dramatically. The rate of inflation was so high that people lost all their savings. The collective farm system disintegrated leaving people without food security, and the government started to import food. The old trading structure broke down with no alternative in its place. The old system of social welfare was systematically destroyed. The withdrawal of government subsidies pushed large sections of the people into poverty.

Read the above passage carefully and answer the following questions:

(i) What is meant by subsidy ?

(ii) How did the disintegration of collective farm system lead to the loss of food security?

(iii) This passage is associated to which country? Why did the government start importing food?

“In the early years of Independence, two contradictory tendencies were already well advanced inside the Congress party. On the one hand, the national party executive endorsed socialist principles of state ownership, regulat ion and control over key sectors of the economy in order to improve productivity and at the same time curb economic concentration. On the other hand, the national Congress government pursued liberal economic policies and incentives to private investment that was justified in terms of the sole criterion of achieving maximum increase in production. ” — Francine Frankel

(a) What is the contradiction that the author is talking about ? What would be the political implications of a contradiction like this ?

(b) If the author is correct, why is it that the Congress was pursuing this policy ? Was it related to the nature of the opposition parties ?

(c) Was there also a contradiction between the central leadership of the Congress party and its State level leaders ?