With reference to the "Dual Pricing" reform process in China, consider the following statements: 1. It meant fixing prices in two ways: one for farmers and another for industrial units. 2. Farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs at government-fixed prices. 3. Transactions beyond the fixed quantities were conducted at market prices. Which of the statements given above is/are correct?

The correct option is 2 and 3 only. Explanation The "Dual Pricing" or "Dual-Track System" was a crucial economic reform introduced in China starting in the late 1970s. It served as a transitional mechanism to shift from a rigid central command economy to a market-oriented economy. The core principle was to maintain stability through state control while incentivizing production through market forces. Statement-wise Analysis: - Statement 1 is Incorrect. The term "Dual Pricing" does not refer to fixing different prices for farmers versus industrial units. Instead, it refers to the coexistence of two distinct pricing mechanisms-state-fixed prices and market-determined prices-applicable to both sectors. The duality was based on the quantity of output (quota vs. surplus), not the sector (agriculture vs. industry). - Statement 2 is Correct. Under this system, both farmers and state-owned industrial units were obligated to produce and sell a specific mandatory quota of inputs and outputs at prices fixed by the government. This ensured the stability of the planned economy and guaranteed supply for essential sectors. - Statement 3 is Correct. To encourage efficiency and higher production, the reform allowed farmers and industrial units to sell any output produced above the mandatory government quota at market prices. This introduced profit incentives and gradually exposed producers to market dynamics. Key Takeaway: China's Dual Pricing reform involved a two-track approach: a planned track (fixed quotas at state prices) to ensure stability, and a market track (surplus production at market prices) to stimulate growth and efficiency.

With reference to the "Dual Pricing" reform… - NCERT Class 11 Economics MCQ

NCERT Class 11 Economics — Chapter 9: Comparative Development Experiences of India and its Neighbours

mcqhard

With reference to the "Dual Pricing" reform process in China, consider the following statements:

It meant fixing prices in two ways: one for farmers and another for industrial units.
Farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs at government-fixed prices.
Transactions beyond the fixed quantities were conducted at market prices.

Which of the statements given above is/are correct?

NCERT textbook question

From NCERT Indian Economic Development · Page 136

Options

A1, 2 and 3
B1 and 2 only
C2 only
D2 and 3 only

Did you get this right?

Solution

The correct option is 2 and 3 only.

Explanation

The "Dual Pricing" or "Dual-Track System" was a crucial economic reform introduced in China starting in the late 1970s. It served as a transitional mechanism to shift from a rigid central command economy to a market-oriented economy. The core principle was to maintain stability through state control while incentivizing production through market forces.

Statement-wise Analysis:

Statement 1 is Incorrect. The term "Dual Pricing" does not refer to fixing different prices for farmers versus industrial units. Instead, it refers to the coexistence of two distinct pricing mechanisms-state-fixed prices and market-determined prices-applicable to both sectors. The duality was based on the quantity of output (quota vs. surplus), not the sector (agriculture vs. industry).
Statement 2 is Correct. Under this system, both farmers and state-owned industrial units were obligated to produce and sell a specific mandatory quota of inputs and outputs at prices fixed by the government. This ensured the stability of the planned economy and guaranteed supply for essential sectors.
Statement 3 is Correct. To encourage efficiency and higher production, the reform allowed farmers and industrial units to sell any output produced above the mandatory government quota at market prices. This introduced profit incentives and gradually exposed producers to market dynamics.

Key Takeaway:
China's Dual Pricing reform involved a two-track approach: a planned track (fixed quotas at state prices) to ensure stability, and a market track (surplus production at market prices) to stimulate growth and efficiency.

Your note

More from Chapter 9: Comparative Development Experiences of India and its Neighbours

With reference to the introduction of the Green Revolution in Pakistan, consider the following statements: 1. It led to mechanisation in select areas. 2. It resulted in an increase in public investment in infrastructure. 3. It caused a decline in the production of foodgrains due to a focus on cash crops. Which of the statements given above is/are correct?

medium

With reference to the reasons for China's economic reforms in 1978, consider the following statements: 1. The leadership was unhappy with the slow pace of growth under Maoist rule. 2. They felt that the vision of self-sufficiency and shunning foreign technology had failed. 3. The reforms were driven by a severe balance of payments crisis similar to India's. Which of the statements given above is/are correct?

medium

Which of the following is NOT considered a "Liberty Indicator"?

easy

What was the primary factor responsible for the significant decline in China's population growth rate in the late 1970s?

easy

Consider the following statements regarding the pre-reform achievements in China: 1. There was a massive extension of basic health services in rural areas. 2. The commune system ensured a more equitable distribution of food grains. 3. These interventions created a strong support base for subsequent reforms. Which of the statements given above is/are correct?

medium

Keep practising Chapter 9: Comparative Development Experiences of India and its Neighbours

Work through every question from this NCERT chapter.

Browse all NCERT Class 11 Economics chapters