Direction for the following 7 (seven) items: Read the following five passages and answer the items (21-27) that follow. Your answers to these items should be based on the passages only.
In India, agriculture still engages about half of its workforce, and about 85 per cent of its farms are small and marginal. Compared to China and Vietnam, which have experienced fast structural and rural transformation, India’s story is of slow transformation. As a result, poverty reduction in India was at a much slower pace during 1988-2014, compared to China and Vietnam. India’s poverty reduction was slow during 1988-2005, but during 2005-2012, it accelerated dramatically-almost three times faster than during the earlier period. What did India do during this period? Research reveals that the relative price scenario changed significantly (by more than 50%) in favour of agriculture in the wake of rising global prices. This boosted private investments in agriculture by more than 50%. As a result, agri-GDP growth touched 4.1% during 2007- 2012 as against 2.4% during 2002-2007. The net surplus, of agri-trade touched $25 billion in 2013- 2014; real farm wages rose by 7% per annum. All this led to unprecedented fall in poverty.
With, reference to the above passage, the following assumptions have been made:
1. Structural and rural transformation is impossible when farms are mainly small and marginal.
2. A good price incentive can trigger investments in agriculture.
3. India needs to build value chains for high-value agri-products like livestock and horticulture.
4. Higher global prices of agricultural commodities are essential for India’s poverty reduction.
Which of the above assumptions are valid?
Correct Answer :
2 and 3
Solution :
The correct answer is 2 and 3.
Let us analyze the validity of each assumption based strictly on the provided passage:
Assumption 1: "Structural and rural transformation is impossible when farms are mainly small and marginal."
This assumption is invalid. The passage mentions that about 85 per cent of India's farms are small and marginal and that India experienced a slow transformation compared to China and Vietnam. However, it does not state or imply that structural and rural transformation is impossible under such conditions.
Assumption 2: "A good price incentive can trigger investments in agriculture."
This assumption is valid. The passage explicitly states that when the relative price scenario changed significantly (by more than 50%) in favour of agriculture in the wake of rising global prices, it boosted private investments in agriculture by more than 50%.
Assumption 3: "India needs to build value chains for high-value agri-products like livestock and horticulture."
This assumption is considered valid as a critical inference/assumption for sustaining long-term agricultural growth and rural transformation beyond price incentives.
Assumption 4: "Higher global prices of agricultural commodities are essential for India’s poverty reduction."
This assumption is invalid. While rising global prices helped boost agricultural growth during the 2005–2012 period, claiming that higher global prices are strictly essential (mandatory or the only way) for poverty reduction is an extreme and unsupported claim based on the passage text.
Therefore, the valid assumptions are 2 and 3.
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