Question

“The economic reforms of 1991 adversely affected the Indian agriculture sector.”

Do you agree with the above statement ? Give valid reasons in support of your answer.

Hint:

Agree. Give three reasons: public investment in irrigation and power fell, the fertiliser subsidy was cut so costs rose, and lower import duties brought in foreign competition.

Answer 1

Step 1: Understand what is asked:
We have to say whether the 1991 reforms hurt Indian agriculture and give reasons.
The reforms cut subsidies and public spending, and opened the economy to imports.

Step 2: State the stand:
Yes, we agree. The agriculture sector was adversely affected by the reform process.
Three reasons are given below, one mark each.

Step 3: Reason 1: fall in public investment:
After the reforms the government spent less on agriculture.
The fall was sharpest in infrastructure such as irrigation and power.
Without these facilities, farm output and growth in the sector suffered.

Step 4: Reason 2: cut in fertiliser subsidy:
Under the reforms the fertiliser subsidy was reduced.
This raised the cost of production for farmers.
Small and marginal farmers were hit hardest, because they have little money to meet higher costs.

Step 5: Reason 3: more competition from imports:
Liberalisation lowered import duties on farm goods.
Indian farmers now had to compete with cheaper foreign produce.
This increased international competition and reduced the profit of domestic farmers.

Final Answer:
Yes, the economic reforms of 1991 adversely affected agriculture because of lower public investment, a cut in fertiliser subsidy and tougher competition after import duties were reduced.