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?

Solution

i) Subsidy is the help usually provided by the government to keep the price of a product or service low as compared to the open market price.

ii) Collective farming was to be replaced by private farming which meant food grains to be purchased from the open market. The government had no control over the prices as well as the stock. This created loss of food security.

iii) (a) This passage is associated with Russia.

(b) The government started importing food due to scaracity of food grains and privatization of agriculture.

Some More Questions From Politics of Planned Development Chapter

Match the following:

What were the major differences in the approach towards development at the time of Independence ? Has the debate been resolved ?

What was the major thrust of the First Five Year Plan ? In which ways did the Second Plan differ from the first one?

What was the Green Revolution ? Mention two positive and two negative consequences of the Green Revolution.

State the main arguments in the debate that ensued between industrialisation and agricultural development at the time of the Second Five Year Plan.

“Indian policy makers made a mistake by emphasising the role of state in the economy. India could have developed much better if private sector was allowed a free play right from the beginning”. Give arguments for or against thisproposition.

Read the following passage and answer the questions below:
“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 ?

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Politics Of Planned Development

Some More Questions From Politics of Planned Development Chapter

Match the following:

What were the major differences in the approach towards development at the time of Independence ? Has the debate been resolved ?

What was the major thrust of the First Five Year Plan ? In which ways did the Second Plan differ from the first one?

What was the Green Revolution ? Mention two positive and two negative consequences of the Green Revolution.

State the main arguments in the debate that ensued between industrialisation and agricultural development at the time of the Second Five Year Plan.

“Indian policy makers made a mistake by emphasising the role of state in the economy. India could have developed much better if private sector was allowed a free play right from the beginning”. Give arguments for or against thisproposition.

Why did the Orissa government sign Memorandum of Understanding with both international and domestic steel makers ?

What was the fear of the environmentalists about setting up of POSCO plant in Orissa ?

Why does the Central government insist on setting up of industry in the State of Orissa ?

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