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Secure 2015

General Studies IIITopic-wise Compilation

Insights on IndiaMarch


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General Studies III March

Contents

Indian economy and issues relating to planning, mobilization of resources, growth, development

and employment .......................................................................................................................... 8

1. It is said that the most recent union budget has introduced a few excellent moves that could work

towards ushering in a new era in the financial sector in India. Write a note on them. (200 Words) ........... 8

2. Recently the Reserve Bank of India (RBI) and the union government signed Monetary Policy

Framework Agreement between them which are hailed as historic. Examine its highlights and this pact’s

importance to Indian economy. (200 Words) ............................................................................................... 8

3. Do you think the new monetary policy framework signed between government of India and the RBI

will help the latter get more autonomy? Critically examine. (200 Words) ................................................... 9

4. Critically examine the importance of findings and recommendations of the Interim Report of the

Bankruptcy Law Reform Committee for Indian economy. (200 Words) ..................................................... 11

5.

What is the importance of ‘Great Compression’ in American history? Do you think India too canexperience ‘Great Compression’? If so, suggest what policy measures need to be implemented by the

government. (200 Words) ........................................................................................................................... 11

6. In recent union budget, the union government has announced that it would amend criminal codes and

introduce stringent provisions to punish tax evaders in an attempt to curb black money. Do you think

such measures will help in curbing circulation or stashing of black money in foreign accounts? In your

opinion, ideally what should be government’s approach? Critically examine. (200 Words) ...................... 12

7. When RBI cuts key interest rates, the Sensex soars and the move is welcomed by the corporate world.

How ill such rate cuts affect common man? Critically examine. (200 Words) ............................................ 13

8. “While inflation targeting has some rationale in advanced economies, where food’s contribution to

the CPI and consumption expenditures is barely 20 per cent, and agricultural markets are far more

organised, there is an inherent danger of it creating an anti-farmer policy bias in a country like India.” In

the light of recent monetary policy framework signed between RBI and the government, critically

comment on the statement. (200 Words) .................................................................................................. 13

9. Do you think increased importance on building physical infrastructure either by involving private or

public means since independence is adversely affecting growth of human capital in India? Critically

evaluate. (200 Words) ................................................................................................................................. 14

10.

What do you understand by ‘net neutrality’? Do you think regulating internet has negative

consequences? Examine. (200 Words) ........................................................................................................ 15

11.

In recent spectrum auction by the government, it was seen that the 900-MHz band was in more

demand than other frequencies of the spectrum. Critically examine why. Also examine what can be

possible fallout of this spectrum auction on consumers. (200 Words) ...................................................... 16

12.

Even after the formation of NITI Aayog, the Plan and non-Plan expenditure distinction still continues

– as seen in recent union budget – to guide government’s expenditure. Why do you think so? What are

the benefits of removing such distinction as recommended by a committee previously? Examine. (200

Words) ......................................................................................................................................................... 17

13.

“Unless India improves productivity, its demographic profile could become a burden rather than abenefit.” Critically discuss. (200 Words) ...................................................................................................... 18

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14.

Average Indian prefers to invest his/her money in gold rather than in stock market or in mutual

funds. This is seen as having deleterious effect on the economy. Critically examine why. Also examine

what should be the role of government in this regard. (200 Words) ......................................................... 19

15.

The recent union Budget has proposed setting – up of the Micro Units Development Refinance

Agency (MUDRA) Bank. Examine why it is being set-up with what objectives. (200 Words) .................... 20

16.

“If economic growth will not automatically translate into improved life chances, air pollution will also

hamper economic growth.” In the light of increasing air pollution in Indian cities, critically comment on

the statements and provide suggestions to improve the air quality. (200 Words) .................................... 20

17.

Critically comment on various fears expressed due to increasing use of robots in day to day tasks.

(200 Words) ................................................................................................................................................. 22

18. What do you understand by Employment Elasticity? Critically examine how and why it has varied

during the post – liberalisation period in India. (200 Words) ..................................................................... 23

19.

Economic Survey – 2014-15 argues that the momentum of decline in food prices is likely to persist

because of three striking developments in three areas that signal a structural shift in the inflationary

process in India: crude-oil, agriculture, and inflation expectations. Examine how. (200 Words) .............. 23

20.

It is often argued that labour reforms are the way to unlock double-digit growth in India. Discuss why

and examine what policy challenges exist in bringing labour reforms in India. (200 Words) .................... 24

21. “For any skill development effort to succeed, markets and industry need to play a large role in

determining courses, curriculum and relevance. In the light of various efforts made so far by various

governments towards skill development in the country, critically comment on the statement. (200

Words) ......................................................................................................................................................... 25

22. Critically comment on the significance of the Mines and Minerals (Development and Regulation)

Amendment Bill, 2015 and the Coal Mines (Special Provisions) Bill, 2015 for Indian economy. (200 Words) ..................................................................................................................................................................... 26

23. India’s FRBM Act as well as the Kelkar Committee (2012) established the principle of aiming to bring

the centre’s fiscal deficit down to 3 percent of GDP. Why utmost importance is given to this principle in

India? Examine how the recent Economic Survey seeks to achieve this target. (200 Words).................... 27

Government budgeting .............................................................................................................. 28

1. In the light of recent reports of government’s thrust on ‘Make in India’ campaign and some pressing

problems being faced by the navy and army, critically comment on India’s defence budget and its

performance in recent years. (200 Words) ................................................................................................. 28

Major crops cropping patterns in various parts of the country, different types of irrigation

and irrigation systems; storage, transport and marketing of agricultural produce and issues and

related constraints; e-technology in the aid of farmers .............................................................. 29

1. As a District Collector, you are asked to come with solutions to recharge defunct borewells and

irrigation tanks in your district. What measures will you take? Explain. (200 Words) ............................... 29

2.

What do you understand by the aeroponics technique of growing plants? Discuss its applications and

advantages for Indian agriculture. (200 Words) ......................................................................................... 29

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Issues related direct and indirect farm subsidies and minimum support prices; public distribution

system- objectives, functioning, limitations, revamping; issues of buffer stocks and food security;

technology missions; economics of animal-rearing .................................................................... 31

1.

Critically examine what effect the ban on cow slaughtering by some of the states in India will have on

economy and society of India. (200 Words) ................................................................................................ 31

2.

Some argue that the report of the Shanta Kumar committee on food management contains several

cogent recommendations and they should be implemented to make PDS efficient. Analyse these

recommendations and comment if they should indeed be implemented. (200 Words) ........................... 32

3. Critically examine what measures have been taken by the Indian government to aid the farmers

through the e-governance mechanism. Do you think these measures are helping an average farmer?

Also, comment. (200 Words) ....................................................................................................................... 33

4. Analyse the merits and demerits of banning cow slaughter. (200 Words) ............................................. 33

5.

Critically discuss India’s concerns regarding Bali Ministerial Decisions and examine how they have been

addressed by the WTO. (200 Words) .......................................................................................................... 346.

Leakages seriously undermine the effectiveness of product subsidies and recently the Prime Minister

stated that leakages in subsidies must be eliminated without reducing the subsidies themselves. Analyse

why leakage is a serious issue in public distribution system in India. (200 Words) .................................... 35

7.

India is facing challenges on bridging the demand-supply gap in milk production. In this regard some

experts have suggested that India should follow Chinese model of milk production to meet the demand.

Examine the features of both the models and suggest which suits better for India. (200 Words) ............ 36

Land reforms in India ................................................................................................................. 37

1. It is said that most industrial projects in India, which are either stalled or cancelled, is due to land

acquisition problem in India. Do you agree with this assessment? Critically examine. (200 Words) ......... 37

Effects of liberalization on the economy, changes in industrial policy and their effects on

industrial growth ........................................................................................................................ 38

1.

It is now widely accepted that the participation of private sector is important in the transformation of

the defence industrial base in the country. Critically examine, what are the challenges that private sector

faces and what needs to be done by the government in this regard. (200 Words) ................................... 38

2.

In recent years, imposing tax with retrospective effect on private companies has become a major

concern with the foreign investors. Critically examine this issue and opine if retrospective taxation is a

necessary instrument in resource mobilization. (200 Words) .................................................................... 39

3.

How successful have been the measures taken during last two years to improve exports from the

country and revive investors interest in India? Critically examine. (200 Words) ....................................... 39

4. Critically analyse merits and demerits of the Right to Fair Compensation and Transparency in Land

Acquisition, Rehabilitation and Resettlement (Amendment) Ordinance, 2014. In your personal opinion,

what constitutes ‘Fair Compensation’ to the farmer? Also, Comment. (200 Words) ................................ 40

Infrastructure: energy, ports, roads, airports, railways etc. ........................................................ 42

1.

According to Census 2011, 80.7 million households in India live without electricity and of these about

75 million households are in rural areas. Critically examine the reasons behind such disparity betweenurban and rural households and critically comment on government’s policy in addressing the issue of

energy poverty. (200 Words) ...................................................................................................................... 42

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2.

“Dirty track and piles of garbage alongside not only present an ugly sight to travellers but also pose

serious safety problems to the Railways.” Examine why and what measures are needed to address this

issue. (200 Words) ....................................................................................................................................... 43

3.

It is observed that newly constructed roads in India do no last longer and they frequently fail the

quality test. Critically examine the reasons and suggest what measures you will take as an administrator

to ensure the construction of quality roads. (200 Words) .......................................................................... 43

4.

The government has made it clear that some important sectors need public investment instead of

private investment to boost their growth. Critically examine why there is change in attitude, from where

will the funds come and the merits and demerits of this change in approach. (200 Words) ..................... 45

5. Economic Survey 2014-15 argues that by eliminating the exemptions in the countervailing duties (CVD)

and special additional duties (SAD) levied on imports, India can revive its manufacturing sector and boost

‘Make in India’ campaign. Critically examine how. (200 Words) ................................................................ 46

6. The rate of growth of gross fixed capital formation in India now languishes around zero and stalling of

“projects,” a term synonymous with large economic undertakings in infrastructure, manufacturing,

mining, power, etc., is widely accepted to be a leading reason behind this decline. Critically analyse

causes behind stalling of projects and their impact on the Indian economy. (200 Words) ....................... 47

7. The Economic Survey 2014-15 has called for restructuring the public private partnership (PPP) model

of investment to boost the infrastructure projects in India. Critically examine the problems it has

identified in PPP model and the solutions it has suggested to restructure the model. (200 Words) ......... 47

8.

“The problem of land acquisition needs to be recast as the problem of efficient use of land, including

the reclamation of unutilized land, the optimal alignment of complementary inputs, and the honest

discharge of social responsibility aided by technology.” In the light of ongoing debate on land acquisition

and challenges therein, critically comment on the statement. (200 Words) ............................................. 48

9.

Examine the salient features of National Telecom Policy – 2012 and evaluate its performance in

meeting its objectives. (200 Words) ............................................................................................................ 49

10. There are many schemes which government of India has introduced to provide electricity to all

villages as part of its rural development agenda. Critically analyse these schemes. (200 Words) ............. 50

11.

Write a note on the objectives, key components and potential of newly proposed Sagar Mala project

of the union government. (200 Words) ...................................................................................................... 51

Investment models ..................................................................................................................... 53

1. The most recent union budget and the economic survey have pointed out that many big infrastructure

projects under PPP model are stalled thanks to variety of reasons. They suggest revisiting and revitalising

PPP model to complete stalled and new projects in a time-bound manner. In this regard, what

amendments have been proposed to PPP model? What challenges these amendments would face?

Examine. (200 Words) ................................................................................................................................. 53

2. It is said that the proposal to transfer risk away from the private sector to the government under PPP

model essentially returns India to a pre-2000 model for investment. Examine the Pre-2000 model of

investment and why this model is despised by some economists. (200 Words) ........................................ 54

Science and technology - developments and their applications and effects in everyday life ....... 56

1.

What do you understand by Big Data? Discuss some of its applications. (200 Words) .......................... 56

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2.

It is said that that AC supply for basic domestic and commercial power needs, rather than DC, is a

highly inefficient way of using energy in the present times. Explain why. Also examine if it is possible to

use DC supply to provide round the clock power using solar source. (200 Words).................................... 56

Achievement of Indians in science and technology; indigenization of technology and developing new

technology.............................................................................................................................................. 58

1.

Critically discuss India’s policy on science and technology. (200 Words) ............................................... 58

Awareness in the fields of IT, Space, Computers, Robotics, Nanotechnology, Biotechnology and

Issues related to intellectual property rights .............................................................................. 59

1. Write a note on different scientific theories on origin of life. Recent experiments by NASA suggest that

life might have evolved ‘abiologically’. Examine how. (200 Words) ........................................................... 59

2. Fifteen years after it rose and went limp, the biotech sector, globally, as well as in India has seen a bull

run of sorts and India has become the world’s 12th biggest biotechnology economy having the second

highest number of USFDA-approved plants. Examine the factors responsible for this rise and also

examine if this run is sustainable in coming years. (200 Words) ................................................................ 60

3. A woolly mammoth has been discovered in a very well preserved state. If scientists want to to

‘recreate’ a live mammoth at present, what possible technologies would they use to do so? Explain the

procedure. (200 Words) .............................................................................................................................. 61

4.

What do you understand by ‘agroecology’? Why do some scientists advocate harnessing agroecology

for safe and sustainable agriculture? Examine. (200 Words) ..................................................................... 61

5.

Recently scientists have proposed that natural tunnels known as lava tubes could safely house

permanent bases on the Moon. Examine the rationale behind this proposal. (150 Words) ..................... 62

6.

Write a critical note on cooperation between USA and Russia in Space exploration. Also examine ifstraining relations between two countries have any bearing on their mutual cooperation in future space

missions. (200 Words) ................................................................................................................................. 62

7. Critically comment on the salient features of the Protection of Plant Varieties and Farmers’ Rights

(PPV&FR) Act of India 2001. (200 Words) ................................................................................................... 63

Conservation, environmental pollution and degradation, environmental impact assessment .... 64

1. It is said that India has a de facto Carbon Tax. Critically examine how this tax is imposed, what are its

objectives and if these objectives have been met. (200 Words) ................................................................ 64

2.

Write a critical account on the measures taken by the government to conserve natural vegetation and

wildlife in India. (200 Words) ...................................................................................................................... 64

3.

“Recently it has been pointed out that India has moved from a carbon-subsidisation regime to the one

where carbon spewing is taxed i.e. the shift from a negative price to a positive price on carbon

emissions.” Elaborate and examine advantages and disadvantages of this shift in policy on climate

change. (200 Words) ................................................................................................................................... 65

4. It is said that fight against harmful emissions affects industrial growth which in turn affects economic

development. Critically discuss what strategies need to be adopted by countries to fight environmental

pollution without affecting economic development. Also comment, if it is worth to let economic growth

take a beating at the cost of measures taken to mitigate environmental pollution. (200 Words) ............ 66

5.

What do you understand by Black Carbon? Examine its impact on ecosystem. (200 Words) ............... 67

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6.

Recently, the Union Ministry of Environment, Forest and Climate Change (MoEF&CC) issued guidelines

on access and benefit sharing (ABS) of biological resources. Examine the objective behind these

guidelines and their impact on traditional medicines manufacturing industry. (200 Words) .................... 68

7.

Critically highlight the hazards of indoor air pollution. Suggest what measures are needed to address

this issue. (200 Words) ................................................................................................................................ 68

8.

Many species of plants and animals are endangered in India. Explain why and evaluate if policies taken

by the government are effective in protecting these species. (200 Words) ............................................... 69

9.

A recent study report has concluded that the Indian thermal power plants are way behind the global

best in terms of performance. Critically analyse the major issues with coal based thermal power plants

and what and why urgent actions are needed to improve their efficiency and performance. (200 Words)

..................................................................................................................................................................... 70

10.

In recent years, municipal corporations prefer ‘scientific closure’ over ‘bioremediation’ for garbage

recycling process. Examine why. (200 Words) ............................................................................................ 71

11.

Examine the institutional mechanism that India has set – up to conserve its wildlife. Do you think this

set-up has succeeded in conserving wildlife? Critically evaluate. (200 Words) .......................................... 71

Disaster and disaster management ............................................................................................ 73

1.

The UN Office for Disaster Risk Reduction (UNISDR), in a report, has said as much as US $314 billion

will have to be spent every year to meet annual average losses from just earthquakes, tsunamis, tropical

cyclones and river flooding. Critically discuss why it’s imperative for governments to invest in disaster

managements and risk reduction strategies and the cost of neglecting these measures. (200 Words) .... 73

2.

Critically analyse how the Disaster Management Act, 2005, has performed in meeting its main

objectives since its enactment. (200 Words) .............................................................................................. 73

3.

Critically comment on the existing disaster response mechanism in India and critically examine the

role, objectives, structure and performance of the National Disaster Response Force (NDRF). (200 Words)

..................................................................................................................................................................... 74

Challenges to internal security through communication networks, role of media and social

networking sites in internal security challenges, basics of cyber security; money-laundering and

its prevention ............................................................................................................................. 75

1. The Reserve Bank of India (RBI) is likely to adopt a zero tolerance policy on Know Your Customer (KYC)

and Anti-Money Laundering (AML) norms. Examine what this zero tolerance policy entails and why there

is such strict policy against above mentioned violations by banks. (200 Words) ....................................... 75

2.

Critically comment on the intent and content of the Undisclosed Foreign Income and Assets

(Imposition of New Tax) Bill, which was recently cleared by the cabinet to introduce it in the Parliament.

(200 Words) ................................................................................................................................................. 75

3. Critically analyse the approach adopted by India to secure its Cyber Space. (200 Words) .................... 76

4.

Critically examine the role of social media websites such as twitter in creating challenges to internal

security. Do you think blocking these sites is a solution if they pose security threat? Justify. (200 Words)

..................................................................................................................................................................... 77

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Security challenges and their management in border areas; linkages of organized crime

with terrorism ............................................................................................................................ 78

1. The United States with cooperation from other Western countries is increasingly depending on

eliminating top leadership of terrorist organisations as counter-strategy to fight terrorism and weaken

those organisations. Do you think this is a sound strategy? Critically analyse. (200 Words) ..................... 78

2.

India is yet to sign the Mine Ban Treaty which has been signed by eighty percent of the governments

worldwide. Critically examine why there is growing argument against the use of anti-personnel landmine

and why is India still reluctant to sign the treaty. (200 Words) .................................................................. 79

Various Security forces and agencies and their mandate ............................................................ 80

1. Write a note on the structure and mandate of Indo-Tibetan Border Police (ITBP). (150 Words) .......... 80

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Indian economy and issues relating to planning, mobilization of

resources, growth, development and employment

1. It is said that the most recent union budget has introduced a few excellent moves that could work

towards ushering in a new era in the financial sector in India. Write a note on them. (200 Words)

Business Standard (Reworking the financial sector)

Answer:

To meet the ambitious development targets, a vibrant financial sector is the need of the hour. Many

welcome steps have been taken in this budget which gives genuine reason for cheer.

1) Capital infusion to PSBs- around 8000 cr. will be pumped into PSBs to meet BASEL 3 norms. Although this

is inadequate considering NPA issues, more revenue is likely to be generated through reducing government

share.

2) SARFARESAI to NBFCs- given much importance to NBFCs to fund SMEs, it was prudent to incorporate

them in this act for better debt recovery and reducing court disputes.

3) Sector neutral financial redressal agency- a one stop consumer complaint and grievance redressal forum

against all financial service providers. (Recommended by FSLRC)

4) Merging FMC with SEBI- SEBI with its experience and trustworthy track record, better equipped to deal

with malpractice and chaos prevailing in future commodity market.

5) Revamping bankruptcy code- since existing legal provision are not adequate to deal with this. A

simplified law will bring legal certainty, speed and keep away rogue borrowers.

6) MUDRA (Micro Finance Development Refinance Agency) will strengthen financially the micro finance

institutions and extend their reach.

7) An autonomous bank board bureau- for appointment of persons in high posts of PSBs without any

political interference.

Proper implementation of these will make room for further reforms and the ride to our great

developmental ambition will be smooth.

2. Recently the Reserve Bank of India (RBI) and the union government signed Monetary PolicyFramework Agreement between them which are hailed as historic. Examine its highlights and this pact’s

importance to Indian economy. (200 Words)

The Indian Express (Historic change in policy)

The Hindu (Pact binds RBI to inflation target)

Answer:

For past few years, India has been fighting against price rise at monetary level, not with much success. This

time addressing few structural constraints partially in budget, government has strengthened its monetaryfront by entering into a pact with RBI. Key highlights are:

Insights on India 8

http://www.business-standard.com/article/opinion/reworking-the-financial-sector-115030201365_1.htmlhttp://www.financialexpress.com/article/economy/after-2-decades-rbi-and-finance-ministry-agree-to-biggest-change-in-monetary-policy/49378/http://www.financialexpress.com/article/economy/after-2-decades-rbi-and-finance-ministry-agree-to-biggest-change-in-monetary-policy/49378/http://www.thehindu.com/todays-paper/pact-binds-rbi-to-inflation-target/article6953008.ecehttp://www.thehindu.com/todays-paper/pact-binds-rbi-to-inflation-target/article6953008.ecehttp://www.thehindu.com/todays-paper/pact-binds-rbi-to-inflation-target/article6953008.ecehttp://www.financialexpress.com/article/economy/after-2-decades-rbi-and-finance-ministry-agree-to-biggest-change-in-monetary-policy/49378/http://www.business-standard.com/article/opinion/reworking-the-financial-sector-115030201365_1.html


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• Reasserting that monetary policy will be solely handled by RBI pre-empting long standing friction

between FM and RBI governor.

• Setting clear inflation target- by January 2016, CPI would be contained below 6% and following years, it

will vary between a 2% band. This will bring taming inflation to forefront for RBI giving secondary priority to

interest rate cut, thus somehow resolving the growth-inflation dilemma.

• Accountability- criteria have been set that will determine when RBI missed the target. In such case it has

to explain to government the causes and state remedial measures that will be taken. It will publish a

biyearly document explaining people the source of inflation.

• Its inflation forecast for next 6-8 months will give an officials estimate enabling many to form strategies

accordingly.

• A monetary policy committee will bring in more objectivity avoiding the view of RBI governor alone.

Importance to Indian economy:

1) Huge relief to common men

2) Increase in expenditure by people boosting growth

3) Increase in saving rate making more capital available for investment.

4) No more gold rush- no more CAD deficit and unstable exchange regime

5) With better investment avenues no need to look only for real estate inflating it price to unacceptable

level- a good sign for government’s housing for all by 2022 scheme. And yes less black money in this sector.

Such institutionalized measure to battle inflation has given more confidence but government must do more

to address the structural issues like supply chain constrains.

3.

Do you think the new monetary policy framework signed between government of India and the RBI

will help the latter get more autonomy? Critically examine. (200 Words)

Business Standard (New monetary policy framework to give more autonomy to RBI)

Business Standard (The pros and cons of inflation targeting)

Answer:

[1]

Based on Urijit Patel Committee recommendations, government and the Reserve Bank of India (RBI) are

agreeing over a new monetary policy framework with the primary objective of containing inflation. Many

people feel it will give more autonomy to RBI which is in sync with the central banks of many world big

economies.

The agreement says, once inflation reaches beyond the comfort zone, both at high and low levels, RBI

should use whatever in its command to bring it to the comfort zone. This basically gives autonomy to RBI.

RBI act will be amended for the formation of a five-member monetary policy committee (MPC) headed by

the RBI governor. Out of the five members, three were suggested to be from RBI (the deputy governor andthe executive director in-charge of monetary policy).

This composition of committee will reflect the independence of RBI, it should have experts as members and

Insights on India 9

http://www.business-standard.com/article/finance/new-monetary-polcy-framework-to-give-more-autonomy-to-rbi-115030301157_1.htmlhttp://www.business-standard.com/article/finance/new-monetary-polcy-framework-to-give-more-autonomy-to-rbi-115030301157_1.htmlhttp://www.business-standard.com/article/opinion/setting-goals-115030301430_1.htmlhttp://www.business-standard.com/article/opinion/setting-goals-115030301430_1.htmlhttp://www.business-standard.com/article/opinion/setting-goals-115030301430_1.htmlhttp://www.business-standard.com/article/finance/new-monetary-polcy-framework-to-give-more-autonomy-to-rbi-115030301157_1.html


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should not have government nominee as members.

India in past has paid price for not having clear monetary policy. So this step should improve the situation

and also ease pressure on RBI to pursue a particular course of policy.

In general, this mechanism is welcome - since it brings to India the formal accountability and transparency

about future actions that is the hallmark of modern central banking but there are still few areas where RBI

cannot still do much.

As, RBI targets CPI where the weight of food items if around 50% but food inflation in India is mostly

dependent on non-monetary factors such as production and supply chains, rains, harvest etc. In this case,

RBI may signal intent but it will not have much impact on ground and RBI will find hard to achieve inflation

target .Also, RBI don’t have any control over fiscal responsibility or debt control which government breach

again and again. So again, RBI can't do much here as well.

This step is a much welcome step and will definitely improve the situation in India with respect to monetary

policy but we need to be cautious and government also need to contain fiscal deficit and control its debit.

[2]

Urijit Patel led MPC's recommendation is now the framework for the new pact signed between the union

government and the RBI. In this RBI will be accountable and responsible for its in directional Inflation

targeting approach in the spectrum band of 2-6%. In case if it missed it will be liable to report to the centre

about the causal failure accompanied with the redressal mechanism. I general Autonomy long desired is

thus imparted to the central banks

Some of the stake holders have argued about the Nominated external members to be nominated by Govt

or RBI. As Bureaucrats by govt nomination will be taking govt side and Autonomy may again be

compromised .While it has been suggested nomination to be made by dy. governor and Governor .One

must note that it will not matter who shall nominate as long as the basic framework for containing the

inflation is achieved

Some Opposition to this framework

1 Inflation targeting has been long done away, after Lehman case 2008. Targeting nominal GDP seems

plausible

2Also Supply side bottlenecks are reason for inflation especially food inflation for which Infra and

government policies are required

3 FrBM and govt debt line, that is Fiscal responsibilities are frequently challenged or crossed. In this sense

targeting inflation may be an issue

4 Until now debt management was under RBI domain , setting independent office under govt will reduce

autonomy and create a milieu of conflict of interest as govt is important player in bond market

5 Besides the interest rates control no other possible means of controlling the financial market seems

visible . Fiscal irresponsibilities may cause forever tight monetary regime hurting Investor sentiment.

Government support & faith in MPC shall be welcomed and Regarding Indian economy ,it is the new

economy and from past experiences what worked abroad has not succeeded here ,Thus suitable time for

experimenting ,trial and error shall be imparted to the Diligent institution for greater Public interest

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4.

Critically examine the importance of findings and recommendations of the Interim Report of the

Bankruptcy Law Reform Committee for Indian economy. (200 Words)

The Hindu (Bankruptcy law reform needed)

Answer:

Indian laws are often termed as the toughest laws for the running of businesses in India. To improve

business condition in the country, Bankruptcy Law Reform Committee was setup by the government in Aug,

2014. Some of the recommendations of the committee which submitted its report are-

1. Early recognition of financial distress in company and timely intervention by the government to rescue

the organization

2. Liquidate un-viable company as soon as possible

3. Allow secured creditors apply for the rescue of the company, earlier it was filled after the company have

been

defaulted by 50 per cent of its outstanding debt

4. Unsecured creditors representing 25 per cent of the debt be allowed to initiate rescue proceedings

against the debtor company

5. Recommendation on individual solvency

Effect of recommendation if implemented-

Positive effect-

1. Improve the rank of India on ease of

doing business

2. Easy exit policies are one of the criteria considered by entrepreneurs before setting any organization

3. Early intervention by the government will save the organization from liquidation

Negative effect-

1. Various provisions which deal with the early intervention by the government to save organization from

being defaulted in already available under various laws, ineffective implementation of existing laws are

major problems

2. Many small businesses and micro enterprises are managed by people who do not have much knowledge

about laws and are largely illiterate, thus, without required knowledge of existing laws, proper

implementation seems to be a distant dream

3. In lieu of getting subsidies and tax benefits through state intervention, entrepreneurs may show a well

running organization as a sick organization

5.

What is the importance of ‘Great Compression’ in American history? Do you think India too can

experience ‘Great Compression’? If so, suggest what policy measures need to be implemented by the

government. (200 Words)

Business Standard (Walmart's visible hand)

BusinessWeek (The Great Compression)

Answer:

Great Compression {GC} was period Post WW2 till 70's which took the form of Great divergence {GDI}. GC

was the used as US govt policy to narrow the Gini index [ reduce the income inequalities, wealth


http://www.thehindu.com/todays-paper/tp-opinion/bankruptcy-law-reform-needed/article6956698.ecehttp://www.thehindu.com/todays-paper/tp-opinion/bankruptcy-law-reform-needed/article6956698.ecehttp://www.business-standard.com/article/opinion/paul-krugman-walmart-s-visible-hand-115030301418_1.htmlhttp://www.business-standard.com/article/opinion/paul-krugman-walmart-s-visible-hand-115030301418_1.htmlhttp://www.businessweek.com/finance/occupy-wall-street/archives/2011/12/the_great_compression_how_war_and_taxes_made_us_all_middle_class--and_why_thats_changed.htmlhttp://www.businessweek.com/finance/occupy-wall-street/archives/2011/12/the_great_compression_how_war_and_taxes_made_us_all_middle_class--and_why_thats_changed.htmlhttp://www.businessweek.com/finance/occupy-wall-street/archives/2011/12/the_great_compression_how_war_and_taxes_made_us_all_middle_class--and_why_thats_changed.htmlhttp://www.business-standard.com/article/opinion/paul-krugman-walmart-s-visible-hand-115030301418_1.htmlhttp://www.thehindu.com/todays-paper/tp-opinion/bankruptcy-law-reform-needed/article6956698.ece


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concentration] ,which included measures viz. unionisation, legislation for minimum wages ,Overall the view

was take the slice of income from best paid and giving it to the worst Paid. Indeed this Economic policy was

way ahead for various other countries.

In context to India which recently in its Economic survey 2015 had theme "creating opportunities [of

economic growth] and reducing vulnerabilities [economic inequalities] had similar stance, though in the

milder format. In India economic inequalities are relatively high as shown in the Gini Index which is 33.4% [

mean 33% people have greater control over resources ]

GDI adopted by US government was ,to weaken social security net and support the already best paid , have

created wide disparities among the people as shown in 2010 GINI index which is 41% .

Progressive taxation which means taxing more to rich, is a way which was used by US back then, is similar

to Recent Budget 2015-16, where no populism or reduction is tax slabs was made. Also similar stance of

progressive taxation and cess on items which are generally used by Upper middle class or rich class can be

seen in same Light

This policy may work, provided the effective implementation and, Leakage prove transmission of suchfunds from rich to the Social welfare. For this Though Govt have sought leak-less JAM trinity number, it will

be time and space which will decide the outcome of policies.

6. In recent union budget, the union government has announced that it would amend criminal codes and

introduce stringent provisions to punish tax evaders in an attempt to curb black money. Do you think

such measures will help in curbing circulation or stashing of black money in foreign accounts? In your

opinion, ideally what should be government’s approach? Critically examine. (200 Words)

Business Standard (The wrong approach)

Answer:

Black money has evolved into a major political issue and with wild surmises about its amount, it has

captured our imagination. The SC had ordered formation of a Special Investigation Team on this issue. In

the union budget of 2015, the central government announced some measures like more rigorous

punishment for tax evasion, stronger laws for benami transactions and not allowing offenders to approach

the Settlements Commission. But these steps leave much desired for more focussed action plan:

1. They do not address the inefficiency and corruption in our taxation regime and put more discretionary

powers in hands of taxmen. As our experience shows, this will lead to more harassment and litigations.

2. While we need to act to simplify our rules and regulations, promote more ease of doing business and

uncomplicated procedures for investment, we are merely prescribing punishments without understanding

why black money is generated.

3. Certain sectors lay real estate or gold trading act as parking for unaccounted money that needs to be

addressed.

Ideally the government should take following steps:

1. Simplify rules and regulations of investment and further liberalize economy.

2. Demonetize higher currency notes.

3. Just as USA PATRIOT ACT, all transactions by or with Indians, above a threshold, must get reported.

4. Introduce amnesty for voluntary surrender of black money, set up a Tax Tribunal and increase

punishment in tax evasions.

5. Round tripping of black money is a major issue s it distorts market and boosts up assets prices. Tax

deductible at source and closing off traditional routes of inflow like, Mauritius route need to be done.


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6. More international cooperation in areas of money laundering and benami transactions.

7. To exhibit its seriousness, government should, ideally, legislate to force disclosure of assets, income and

expenditure of political parties and bring them under RTI.

7. When RBI cuts key interest rates, the Sensex soars and the move is welcomed by the corporate world.

How ill such rate cuts affect common man? Critically examine. (200 Words)

The Hindu (RBI move will ease your EMI burden)

Business Standard (RBI cuts rate, banks set to follow suit)

Answer:

The recent rate cut by RBI of repo rate from 7.75% to 7.5% has been welcomed by corporate world and has

sent Sensex to new heights. It has various implications for a common man:

1. Banks can borrow loans from RBI at reduced rates and so will have to lower their own bank rates. This

means more loans cam be doled out and that too cheaper ones. So, cheaper education, home or car loans

and smaller Equated Monthly Instalments, is good news for our middle class.2. Business can avail easier loans so bring down their costs, expand enterprise and generate more

employment.

3. Inflation can be checked.

4. More expenditure than savings by people so drive up the growth and demand.

5. More trading in markets and speculations will build upon trust.

However, there are some negative affects also:

1. Reduced savings and more demand will pump up the prices of various goods.

2. Loans given out may cause an economic bubble to form and this may burst as in US in 2008.

3. Depreciation of rupee will result. Currently oil prices are in check so no issue. But volatility of rupee to

crude oil prices is large and geopolitical issues are disturbing trends. Seasonal changes in food prices are

also an issue.

4. Banks may have to suffer from issues of non-performing assets and their own margins.

So the present situation brings cheers to common man but continuous monitoring is required by RBI.

8. “While inflation targeting has some rationale in advanced economies, where food’s contribution to

the CPI and consumption expenditures is barely 20 per cent, and agricultural markets are far more

organised, there is an inherent danger of it creating an anti-farmer policy bias in a country like India.” In

the light of recent monetary policy framework signed between RBI and the government, critically

comment on the statement. (200 Words)

The Indian Express (Against the grain)

Answer:

The recent monetary policy framework agreement between RBI and government institutionalizes the

inflation control measures and a welcome sign. But there are some issues:

a) RBI determines its monetary policy based on CPI figures where food and non-alcoholic beverage has

about half the weightage (45.86%). Their price are more controlled by weather condition, supply chain

management, market structure etc. and less by monetary policy tools like interest rate.


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b) Food and fuel price drives the CPI and mostly it depends on external factors like volatility of oil producing

region, adverse weather etc. RBI can only react by increasing interest rate which will dampen growth and

wont tame inflation either.

c) RBI can only give a buffer time to the government to address the core issues and safeguards the

economy from drastic change in macro-economic indicator but for temporarily. In this case, making the RBI

answerable for explaining the reasons for missing inflation target does not make sense.

d) In the advanced economies, food commodities share barely 20% of inflation index and agriculture

market is organized which makes it responsive to the monetary policy of central banks.

How this will create anti-farmer policy bias?

The pressure of limiting inflation to the set figures will make government frequently resort to 1. Not

increasing MSP regularly 2. Imposing export ban 3. Duty-free import. This will affect the agriculturalists and

workforce dependent on agriculture.

Both fiscal and monetary policies are needed to rein in inflation. Instead of throwing this completely on RBI,government should think over structural reforms which cause inflation.

9. Do you think increased importance on building physical infrastructure either by involving private or

public means since independence is adversely affecting growth of human capital in India? Critically

evaluate. (200 Words)

The Hindu (Nehruvian budget in the corporate age)

Answer:

Human Capital also known as Human Resource is the skill, knowledge and experience of individual,organisation or nation. A nation’s biggest asset is Human Resource development which needs better

physical infrastructure (roads, education institutes, bridges, electricity) and invisible infrastructures

(services, education, sanitation) for realisation of full potential.

Physical infrastructure needs huge investment which led to focus on public and PPP investment on this

sector and ignored Human Capital development as for election and political advantages visible

infrastructure holds more value. Also, for providing mass scale employment and developing new urban

areas, physical infrastructure was boosted since Independence. India’s education system also produced

more than enough to qualify for domestic job requirement. Most of the high-tech research and

technologies we directly buy from foreign nations at considerate price. Also, primary sector of economywhich caters largest employment to nation doesn’t need skill and education expertise. All such factors

summarises to lesser focus on Human capital development. International organisation like World Bank, IMF

and ILO also never focussed on skill development for India, rather they only asked for trade transparency,

EXIM policy, cheap loans for infrastructures etc. because, the deficit in infrastructure was matching up with

deficit in Human capital.

A Developed HR will be of no use if there is no physical infrastructure and vice-versa. Both HR and physical

infrastructure have gestation period and takes time to mature and become beneficial.

Hence, balanced attention to both is needed.


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10.

What do you understand by ‘net neutrality’? Do you think regulating internet has negative

consequences? Examine. (200 Words)

The Hindu (‘Net neutrality’ myths)

Answer:

[1]

---Net neutrality is the concept, according to which the ISPs and the govt should consider every internet

equally, and not to differentiate in it broadcast on the basis of user, content, site or platform.

---It basically prevents the govt or other entities from blocking any content, which may be opposing their

personal views, or can be considered as criticism of their policies.

---Regulation of any information on the internet is certainly undesirable, as it prevents the citizens from

forming a wholesome view regarding an aspect.

---The corporates may bribe the ISPs to channelize their content more preferably, as compared to other

sites and users. This can be detrimental to freelance writers, who do not have enough financial backing to

equal that of the wealthy individuals.

---It is also possible that the citizens don’t get to know the other side of the truth, and they are forced into a

biased opinion by the ISPs.

---On the other hand, the freedom of speech also has some limitations, as enumerated in Article 19(1) (a) of

our constitution, according to which, any information which tends to disturb public health, public morality,

international relations, etc. can be veiled in favour of the nation.

---In such cases, it becomes necessary to regulate such content on the internet. So we can say that net

neutrality is not a holistic concept which has to be followed in every situation. It is up to the wisdom of the

govt, to allow/ disallow some content from broadcasting, while keeping the public wellbeing in

consideration.

[2]

Net Neutrality: In internet traffic every data irrespective of its origin is equal and its transport over network

must be considered equally without giving some preferences to some. Net neutrality is core of internet

governance over various networks that ISPs should not discriminate.

Effect of Regulating Internet:

Internet traffic in various countries is regulated by their law of the land; Like China imposes ban on multiple

websites. Similarly India too has started to interfere in such matters in recent times. Government's

contentions on Public safety and national security are valid; however there must be clear cut guidelines and

laws to manage and implement such bans. For example recently Supreme Court of India asked to ban all

porn websites in India on argument that porns are increasingly responsible for rapes in India. Such flawed

and arbitrary argument to ban some traffic is against the principle of net neutrality and it will cause a

debilitating impact on internet business and freedom of speech. So regulation of internet traffic must be

carried out in spirit of striking a balance between freedom of speech and some restrictions of freedom of

speech (as it is not unlimited).


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11.

In recent spectrum auction by the government, it was seen that the 900-MHz band was in more

demand than other frequencies of the spectrum. Critically examine why. Also examine what can be

possible fallout of this spectrum auction on consumers. (200 Words)

Business Standard (Artificial scarcity)

Answer:

[1]

In general, Mobile communication is supported over 900MHZ and 1800MHZ frequency bands. In India,

union government conducts

periodic auction of these frequency bands through which telecom operators will buy license to provide

service. The latest call for bids to get the license of 900 MHZ has seen an unprecedented demand. This can

be attributed to

1. As per the laws of physics, for the same strength, low frequency signals can travel more distance than

high frequency signals. Hence the number of intermediate base stations required to increase the strengthof signal will be less in case of 900MHZ frequency band service. It will reduce the installation costs.

2. Wide availability and lower costs of essential devices and network equipment required to support

communication service in 900 MHZ than in 1800 MHZ.

3. Introducing 4G services by exploiting the better technical standards of 900MHZ band is easier compared

to less evolved standards of 1800MHZ band.

4. The present license holders could build up large consumer base through their consistent service in 900

MHZ band for 20 years. Loss of license, without alternative band to support, means losing the established

customer base to competitor.

Though the increased demand can bring high revenues to the government, it may have the following

possible fallouts:

1. Service providers will most likely to pass the costs to customer by increasing the call tariff

2. Without proportionate increase in tariffs, stress on the balance sheets of private firms may lead to

default. It causes increase in Non-performing assets of banks which lent credit to them.

Government would do well to take measures to allow

service over alternative bands to reduce the pressure on existing bands. 15MHZ band, in 2100MHZ

frequency range, that was agreed by armed forces for civilian use can come handy.

[2]

An electrical engineer's view point

Why 900 MHZ??

(1) Mobile Wireless communication in India is basically based on 2 Generations of technology i.e. 2G and

3G. Recently 4G (LTE) is also coming... 2G Technology has two variations which are CDMA (Works on 800

MHZ) and GSM (900 MHZ). While 3G (WCDMA Technology) works at 2100 MHZ. In recent auctiongovernment is auctioning spectrum for all the 3 technologies i.e. CDMA (800MHZ), GSM (900MHZ) and

WCDMA (2100MHZ). While GSM and WCDMA technologies are popular in India however CDMA based


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technology is rapidly losing its base in India. The reason for loose of CDMA base in India is because of its

higher initial costs as compared to GSM. Therefore there are only 2 operators (Tata Indicom, Reliance

CDMA) of CDMA in India and they have heavily invested in technology so they can't leave. Therefore when

bidders are not there so from where will the demand come? Secondly 3G in India is not as much popular as

2G is. As telecom companies mostly are getting their revenues from voice operations so they are not that

much interested in data (IIN may be an exception: P).

2) Reliance Jio is making speculations and Idea is getting crazy (so are the people who use IIN: P). So a

competition for Internet hegemony in India is started b/w them and nobody is ready to step out. Govt. is

benefitting from this competition or rivalry :).

Critical Analysis: PM is talking about digital India and internet to mass is very imp. However, telecom

operators are not interested in 3G (2100 MHZ) band. They simply want to maximize their profits from 2G-

GSM (900MHZ).

Fall out of spectrum auction on consumers: Bidders are bidding at too much high cost. All this has to be

passed on customers in future.

Suggestions: 1) Govt. should to vacate more spectrum has in 2100 MHZ band. There are huge possibilities

there. Too much spectrum is lying vacant with defence. Govt. should take it and auction it so 3G services

can get more bandwidth and hence there rates also reduces. Then only mission of PM digital India will

materialise.

12. Even after the formation of NITI Aayog, the Plan and non-Plan expenditure distinction still continues

– as seen in recent union budget – to guide government’s expenditure. Why do you think so? What are

the benefits of removing such distinction as recommended by a committee previously? Examine. (200

Words)

Business Standard (Unplanned Plan)

Answer:

1. The plan and non-plan distinction was introduced to distinguish between spending on schemes under

FYP and other expenditure.

1. 12th plan is already in the middle. Most of the schemes and states budgets are planned according to

that. Even NITI aayog is going to take midterm appraisal of plan. So it is being continued.

Adverse impacts of distinction:

1. Non-plan expenditure is seen as non-productive and pruned. For instance, recently the budget of

ministry of health is pruned to meet fiscal deficit target, whereas health has already low allocations.

2. Appraisal is being done only on plan expenditure, thus, there is no appraisal and improvements in non-

plan expenditure.

3. Already created assets under plan expenditure in previous plans are being neglected, as they form non-

pan expenditure now. For instance, water shed maintenance is being neglected.

Because of these adverse impacts, the distinction should be down away with.


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13.

“Unless India improves productivity, its demographic profile could become a burden rather than a

benefit.” Critically discuss. (200 Words)

Livemint (Realizing the Indian dream)

Answer:

[1]

With relatively young population and most of the people in the working age group, India demographics are

better than China and any other major economies of the worlds in terms of their economic importance and

all of this would mean nothing unless India invest efficiently and wisely in improving its skilled manpower

and productivity otherwise the boon is likely to convert into bane for it.

Features and advantages of demographic profile in India:

1.Roughly two third of the population is in the working age group( 15 to 60 years) .This provides the

potential for huge man power capable of being employed and meet the labour demand. No country in the

world has such demographic advantage like India .Major economy like China and Japan have increasingaging population thus ,presenting potentially huge shortage of labour in upcoming future.

2. The average age of population in India is 27 year and this is expected to reduce further to 24-25 by 2020.

3. A lager young population means huge domestic consumer base for produced goods and services that

makes Indian market more lucrative with huge growth potential and economic activities. India’s economic

growth would not be dependent on exports and thus would remain largely insulated from decreased

demands internationally in crisis.

Why improving productivity is key:

1.Productivity must increase to generate more and more employments by creating huge number of new

jobs otherwise most of the young working population would remain unemployed in absence of proper andsufficient jobs. Thus, demographic advantage of having large working age population would turn from a

benefit into a huge financial and social burden.

2. Adequate imparting of skills through increased education and training is essential to make the young

population employable and fit to meet the requirement of jobs.

In absence of all these, India would end up becoming an under achiever.

[2]

India Economy is having various Positive developments in both macroscopic Stability and Demography of

Country. In the case of former , Lower oil import bill Slowing Beijing ,Brazil Economy and US , Russia ,Chinawillingness to cooperate with India While in case of Latter it is Young labour force 15-64 ,that is lower

dependency ratio vis a vis to China ,Japan, UK etc.

Harassing the Human capital by providing skill even at cost of greater fiscal deficit can help economy glide

in the Long run. Success of Services can well be emulated in other sectors as well. Dependency on Imports,

technologies, can be reduced by various S&T, R&D programmes like Atal innovation scheme, INSPIRE,

STRAW. Linkage between IIT /NITS with MSME/villages to solve their daily life problems is another good

step to reap the dividends. Some other steps LIKE MOOC of IIT Bombay , NSDC , Women entrepreneurship,

USTAAD, SFURTI, Seeko or Kamao , Nai UDAAN , STEAM .Collateral free Loans to minorities/Women/SC/STs

etc. can further give fillip to the Economy


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However if irregularities, and lackadaisical attitude prevailed then it may be burden too Such as younger

generation in drudgery, Crime, rape, Prostitution etc. Increased Health, poverty, disease eradication of

Government will cause fewer funds for Investment in Projects for Economy.

A Golden Window, of such features shall not we wasted, Rather Greater focus on Youth Policy and

implementing above schemes to be Prioritised.

14. Average Indian prefers to invest his/her money in gold rather than in stock market or in mutual

funds. This is seen as having deleterious effect on the economy. Critically examine why. Also examine

what should be the role of government in this regard. (200 Words)

Business Standard (India's gold obsession needs a correction)

Answer:

The retail investors affinity for buying gold is a result of various reasons

1.Indian's cultural obsession for gold leading to imports as India doesn't mine gold substantially.

2. The lack of attractive alternate financial instruments which are both safe and ensure good returns.3. The lack of awareness among people about other saving and debt instruments and a low level of

financial inclusion.

The deleterious effects on economy are:

1. High import of gold leads to Current Account Deficit (CAD) which hurts rupees strength which creates a

vicious cycle of continuous CAD.

2. Any hike in import duty drives gold market into Black leading to loss to exchequer and raise of criminal

activities.

3. Had the expenditure on gold otherwise invested in financial instruments would have helped financing

many public projects especially infrastructural.

Governments role in tackling this issue:

1. The recent budget announced following

(a). Gold Monetisation Scheme: where people can earn interest or take loan by depositing their gold.

(b). Sovereign Gold Bond: which is a paper-replica of metal gold. One can buy this and earn interest rate

and redeem at market price of gold.

(c). Indian government minting its one gold coin to decrease imports especially.

2. Decision to develop debt market will attract retail investors to invest as they are not generally interested

in equity markets.

3. A well-functioning and well regulated financial system should be maintained to attract investors away

from gold.

4. Tax incentives or less lock-in periods can be provided prudentially.

Thus government has to take a multi-pronged approach of discouraging imports, offering attractive

financial sector and bring awareness and among people to tackle this problem and gain resources for much

needed investments.


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15.

The recent union Budget has proposed setting – up of the Micro Units Development Refinance

Agency (MUDRA) Bank. Examine why it is being set-up with what objectives. (200 Words)

Business Standard (MUDRA Bank: A catalyst for India's 10% GDP growth)

Answer:

Majority of the marginalised and poor in India are employed in the informal sector which is often dubbed

as the “parallel economy”. To achieve the goal of social inclusion and make strides in Human development

there is an urgent need to look at the requirements of this sector.

Micro Units Development Refinance Agency (MUDRA) Bank, will be set up to help microfinance firms to

lend more mainly because:

• only 4 per cent have access to institutional credit, with loans between Rs 50,000 - 10 lakh almost

impossible, forcing them to go to moneylenders.

• The sector faces stiff competition from larger firms, lack of infrastructure and access to easy credit.

• Inadequate finance for purchase of machinery, equipment or raw materials.

The 'change' to our economic architecture could be deep and transformational because:

1. It involves funding the unfunded and encouraging entrepreneurship

2. Development tool for SCs, STs and OBCs who own almost 60% of all enterprises in this sector.

3. Would expand the tax-GDP ratio and government revenues.

4. Will increase liquidity and so lower their borrowing costs.

However, some critiques have raised the question whether India really needs another banking agency since

many others like payment banks etc. have been recently mooted. Digging deeper, its scope of work will be

much larger:

• it will be a statutory body responsible for regulating and refinancing all MFIs • will also rate MFIs, formulate a code of conduct for the industry

• promote right technology solutions for the last mile,

• Will run a credit guarantee scheme

Also, Similar agencies have been successful in other countries like Bangladesh PKSF (Palli Karma-Sahayak

Foundation)

This highlights a step in the right direction and the new economic philosophy of supporting enterprise

wherever there is a desire for that in our economy, while continuing with better targeted and well-

conceived social security framework for the poor and needy and better social inclusion.

16. “If economic growth will not automatically translate into improved life chances, air pollution will also

hamper economic growth.” In the light of increasing air pollution in Indian cities, critically comment on

the statements and provide suggestions to improve the air quality. (200 Words)

Business Standard (Competitive pollutionism no good)

Answer:

[1]

Development encompasses the growth, increased life chances, equitable share to everyone. So mereeconomic growth perspective will only cause the shift of balance causing various issues such as pollution,

inequitable growth, and decreased life chances. Air pollution In Indian cities is clearly evident from stance


http://www.business-standard.com/article/opinion/rajeev-chandrasekhar-mudra-bank-a-catalyst-for-india-s-10-gdp-growth-115031600018_1.htmlhttp://www.business-standard.com/article/opinion/rajeev-chandrasekhar-mudra-bank-a-catalyst-for-india-s-10-gdp-growth-115031600018_1.htmlhttp://www.business-standard.com/article/opinion/arunabha-ghosh-hem-himanshu-dholakia-competitive-pollutionism-no-good-115031601230_1.htmlhttp://www.business-standard.com/article/opinion/arunabha-ghosh-hem-himanshu-dholakia-competitive-pollutionism-no-good-115031601230_1.htmlhttp://www.business-standard.com/article/opinion/arunabha-ghosh-hem-himanshu-dholakia-competitive-pollutionism-no-good-115031601230_1.htmlhttp://www.business-standard.com/article/opinion/rajeev-chandrasekhar-mudra-bank-a-catalyst-for-india-s-10-gdp-growth-115031600018_1.html


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of Buying Air purifier ahead of US President Visit. Approach towards such pertinent issue shall be based on

cause and remedial measures rather debating and comparing over numbers [pollutants] Vis a Vis to other

nations and cities.

Causes of Air pollution in Indian capital and Northern India

~ Burning the rice husk to clear off the fields quickly in PB and HR, This decreased the visibility and

increased air pollution in India's Capital

~ Old vehicles, Non PUC compliance

~ Low level of instrumentation to monitor which causes neglect of Air pollution

~Approaching pollution as distinct matter, thus unable to connect with Economic and Health consequences.

WHO 2009 stated Air pollution cost 1.7% of GDP to nation

~Increased vehicular traffic , low rates of CNG which were made to encourage over petrol has actually been

offset by sky rocket rise of Vehicles on roads

Remedial

~Delhi govt and Union govt can pay farmers not to burn rice Husk. Same could be used for Bio -fuel

provided if Govt support given to them

~strict compliance with PUC, Aiming for BS6 rather BS5 by 2030

~Hand held divide as recommended by CSE along with IiTM SAFAR app can sensitise people and show the

real time monitoring based on new Air quality ‘One Number- One Colour-One Description’

~Behaviour change along can help in achieving the target. Ahmedabad model of using of bus/public

transport by Upper class can serve example

~Carbon credit , emission trading instrument ,polluter pay principle, green bonds, Green buildings code

Process based rather product based, green rating [ GRIHA etc.] for different sector can pave in

In sum it shall be wholesome and multi-faceted approach which can turn the Sky colour Blue.

[2]

Air Pollution in many Indian cities have crossed the safe limits which can also be seen from the fact the 13

Indian cities are placed in the top 20 polluted cities in the world. This heavy pollution not only has severe

consequences to the individuals and the society but also impact the country in economic terms. According

to a report India loses 1.7% of its GDP because of air pollution.

Causes of this includes:-

1) Continuous and increasing use of non-renewable sources of energy, heavy dependence of fossil fuels

2) Rapidly increasing population

3) Rapid industrialization, industrial activities and urbanization. With lack of effective regulation on

emission the situation worsens.

4) Rising vehicular population added with low quality of diesel, petrol and other fuels like kerosene used in

vehicles for economic benefits

5) Uses of fuelwood and biomass burning. Also some agricultural practices like burning of rise husks also

cause pollution.

All these lead to a vicious cycle of increasing pollution every day. This has severe consequences in the form

of chronic respiratory diseases which can also impact the life expectancy. Further it restricts individual’s

capacity and productivity having an adverse impact on country's GDP and growth along with economic

burden on the society as well as the country in terms of health services.

Solutions:-

1) More focus on renewable sources of energy. Governments' plan to produce 100GW of solar energy by



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2022 is a welcome step. Proactive steps are needed to achieve this dream.

2) Government has implemented Euro IV norms for metro cities. Further greener fuels like CNG or

hybrid/electric cars needs to be promoted. Motivating people to take public transport along with improving

upon it so that people uses it.

3) Curb of adulterated fuels. Also removal of subsidies from diesel is a welcome step. Further a pollution

cess can be thought of.

3) Providing LPG connections to those who don't have them

4) A more proactive role needs to be played by the pollution control boards both at the central and the

state levels.

Unfortunately Pollution have not been a political issue, as a result it didn't received desired attention from

the political class. But now seeing its adverse impact and toll on individual, society and the country there is

an urgent need to revamp the air

levels in the country by improving upon the pollution aspects. Synergy between the governments at

central, state and local levels and civil society along with improved coordination between various agencies

working in this direction is the way forward

17. Critically comment on various fears expressed due to increasing use of robots in day to day tasks.

(200 Words)

The Hindu (Who’s afraid of robots?)

Answer:

Robots are Abiotic, created by man for various operations and activities. With advancement in technologies

they were able to pass the Turing test [test for Human like intelligence]. Since advent of Industrialisation,

Mechanisation, people who were unable to compete, ousted are Luddite to any such technological

advancements. Various people have feared the technological unemployment that is machine in place of

man for the same work .it may appear to be true when looked on the place where changes occurred

However if comprehensive picture, along with ecosystem if analysed, such above fears will appear

exaggerated, illogical. For instance a branch of bank where there were previously 25 people working , But

now only 5 people are working post Computerisation. This if looked at branch level will appear as

technological encroachment But , if we take another perspective like Computer have software designed by

team of software development which are obviously huge in quantity . Along with back end support team

for day to day issues employed for all branches. In a way machines has created more jobs rather decreasing

them.

Fears that Haunts People

~Job loss ,unemployment

~Increased competition

~Skills becoming redundant

~ Mgmt. rationale view Robots vis a vis Worker

One must note that robots/machines are only causing taking over jobs that are repetitive in nature, low

skill based However Such machines are still in control of Man


http://www.thehindu.com/todays-paper/tp-opinion/whos-afraid-of-robots/article7000963.ecehttp://www.thehindu.com/todays-paper/tp-opinion/whos-afraid-of-robots/article7000963.ecehttp://www.thehindu.com/todays-paper/tp-opinion/whos-afraid-of-robots/article7000963.ece


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18.

What do you understand by Employment Elasticity? Critically examine how and why it has varied

during the post – liberalisation period in India. (200 Words)

Economic Survey – 2014-15, Chapter 1

Livemint (India’s employment elasticity almost zero)

Answer:

Employment elasticity is the growth of employment relative to growth of Economy. Reforms of 1991 are a

shift in era in Indian economic realm. Post Liberalization the major change occurred is the shift in

population from agriculture to Manufacturing and Services. India traditionally being an agrarian economy,

the low growth and heavy population pressure on land, disguised unemployment have led to people

waiting for opportunity to change to a rapid growth environment and liberalisation provided a medium.

Despite aspiring for an Industrial economy during Nehruvian era, there was a marginal growth which could

not sustain momentum resulting in low productivity in manufacturing as well. Post liberalization period

gave an opportunity for people to turn to services with the growth of banking, financial sector, BPOindustry, coming of internet. Though new employment opportunities have come but the rapid rise of

population, urbanisation has made it mandatory to raise the employment growth. So, unlike expected post

liberalisation has led to stagnation in employment growth. With deregulation of sectors and removal of

licenses, emergence of private sector and employment in trade and tourism etc. also tried to provide

employment. But overall Employment Elasticity in India has been flexible till 1991 and post liberalization

has made it rigid and sectorial composition to GDP of the country changed especially with rapid growth in

services sector and marginal growth in manufacturing, and not much change in agriculture. The low

employed industry of services is contributing maximum share to GDP is an evidence that employment

elasticity is rigid posing a challenge to the current Indian government and revival of manufacturing through

'Make in India' could be a great opportunity to meet the growing requirements.

19.

Economic Survey – 2014-15 argues that the momentum of decline in food prices is likely to persist

because of three striking developments in three areas that signal a structural shift in the inflationary

process in India: crude-oil, agriculture, and inflation expectations. Examine how. (200 Words)

Economic Survey – 2014-15, Chapter 1

Answer:

With greater emphasis and thought towards “inflation targeting”, in recent times there has been a

structural shift in inflationary pressures in India. The decline in food prices, much to the cheer of the

common man, is likely to persist because.

1. Crude oil prices:

Persistence of moderated prices due to:

• weaker global demand-due to slow growth in major global economies

• increased supplies- increased crude oil and shale gas production in US and decline in power of OPEC

• Global monetary liquidity environment – prospect of future rise in interest rates in US favour oil

extraction now

2. Agriculture:• Expected decline in global agricultural prices -likely to have an impact in moderating increases in domestic


http://www.livemint.com/Opinion/zAcuIvXlzIfML7N2Q10L2H/Employment-elasticity-almost-zero.htmlhttp://www.livemint.c

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