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Question

Q.Describe any four consequences of Shock Therapy.

(OR)
Describe any two features of India's policy of non-alignment. How did this policy help India to serve its own interests ?
CBSECBSE Class XII Board 2019Subjective· 6mImportance★★★★★
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Part (a): Shock Therapy brought industrial collapse and unemployment, oligarchy and inequality, hyperinflation that destroyed savings, and the breakdown of welfare with falling social indicators.

Part (b): Non-alignment was an active, independent policy that served India by winning aid from both blocs, protecting its security and autonomy, and giving it global leadership.

Part (a)

Shock Therapy was the model of transition, influenced by the World Bank and IMF, by which Russia and other former communist states moved abruptly from a state-controlled to a capitalist market economy in the 1990s. Its consequences were severe:

  • Collapse of state industry and mass unemployment. The entire structure of the old economy was dismantled almost overnight; state-owned industries were privatised and sold off, and most could not survive open competition, so factories closed and millions lost their jobs.
  • Rise of oligarchs and extreme inequality. The valuation and sale of state assets was among the largest 'garage sales' in history; a handful of well-connected individuals bought them cheaply and became immensely rich, while the old middle class was virtually wiped out and inequality soared.
  • Hyperinflation and the destruction of savings. Price controls were removed suddenly, prices rocketed, and the rouble lost most of its value, so people's lifelong savings became worthless and, in many regions, barter replaced money. …

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