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Q.Read the passage given below carefully and answer the following questions : The old system of social welfare was systematically destroyed. The withdrawal of government subsidies pushed large sections of the people into poverty. The middle classes were pushed to the periphery of society..... Besides, privatization led to more disparities.

(i) What is meant by government subsidy ?
(ii) How did the withdrawal of government subsidy lead the people into poverty ?
(iii) Do you support or oppose the policy of privatisation ? Support your answer with any two suitable arguments.
(OR)
Read the passage given below carefully and answer the following questions : The non-aligned countries were more than merely mediators during the Cold War. The challenge for most of the non-aligned countries — a majority of them were categorised as the Least Developed Countries (LDCs) — was to be more developed economically and to lift their people out of poverty. Economic development was also vital for the independence of the new countries. Without sustained development, a country could not be truly free.
(i) Name any two founder countries of Non-Aligned Movement (NAM) during the Cold War period.
(ii) Suggest any two methods to lift the people of the Least Developed Countries out of poverty.
(iii) Explain the concept of 'sustained development'.
CBSECBSE Class XII Board 2019Subjective· 5mImportance★★★★★
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Part (a): A subsidy is state support for essentials; its withdrawal raised prices and destroyed the safety net, causing poverty, and privatisation can be opposed for widening inequality and unemployment.

Part (b): India and Egypt founded NAM; LDC poverty can be tackled through education, health, infrastructure and diversification; sustained development is enduring long-term growth essential to real independence.

Part (a)

The passage describes the collapse of the old welfare system, the withdrawal of subsidies and the effects of privatisation — features of the shock-therapy economic transition.

  1. What is meant by government subsidy? A government subsidy is financial assistance provided by the state — as a direct payment, a tax concession, or a reduction in the price of a good or service — to make essential items such as food grains, fuel, fertilisers, housing, health and education cheaper and within reach of ordinary people, especially the poorer sections.
  2. How did withdrawal of subsidies lead to poverty? When subsidies were withdrawn, the prices of essential goods and services rose steeply. Large sections of people who had depended on cheap, state-supported essentials could no longer afford them. As the passage notes, the old system of social welfare was destroyed, so there was no cushion to fall back on; the middle classes were pushed to the periphery and the poor were driven deeper into poverty. …

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