(i) "As per a few scholars, fertilizer subsidies should now be phased out, as they have served their purpose." Do you agree with the given statement ? Justify your answer with valid arguments. (ii) State any two ways by which the government can execute the step of disinvestment. (i) "During the 1991 economic reforms, the Government undertook a range of financial sector reforms which made a significant impact in the years to follow." Justify the given statement with valid arguments. (ii) State the name of any one Maharatna and any one Navratna company.

Question

Accepted Answer

(i) **I agree that fertilizer subsidies should be phased out.** Justification:

**Arguments in Favour:**
- Subsidies have served their purpose of promoting Green Revolution
- They impose significant fiscal strain on government resources
- Lead to overuse and environmental degradation
- Benefit mainly large farmers, not small/marginal farmers
- Create market distortions

**Arguments Against:**
- Small farmers depend on subsidies for affordable inputs
- Removing subsidies may increase cost of production
- Could affect food security
- May lead to social unrest

**Recommendation:** Subsidies should be gradually phased out for large farmers while maintaining support for small/marginal farmers.

(ii) **Disinvestment Policy:**
- Transfer of ownership/management of public sector companies to private sector
- Selling part of equity of PSUs to public
- Purpose: Improve financial discipline and facilitate modernisation
- Methods: Strategic sale, minority stake sale, IPO
- Impact: Generated revenue, improved efficiency, but also concerns about undervaluation