(Download) UPSC IAS Mains Exam 2018

PUBLIC ADMINISTRATION (Paper-1)

• Exam Name: UPSC IAS Mains Public Administration (Paper-I)
• Marks: 250
• Time Allowed: 3 Hours

SECTION "A"

Q1. Answer the following questions in about 150 words each:

Q1. (a) "The scope of the discipline of Public Administration is determined by what an administrative system does." Does it mean that the scope of this discipline is boundaryless ? Explain.
(b) "The concepts of rationality and efficiency are intertwined in the bureaucratic analysis of Max Weber." Comment.
(c) “New Public Service approach is an improvement over its predecessor, New Public Management." Discuss.
(d) "A leader is a people's developer" (Napoleon). Which aspects of subordinates' development can be positively influenced by a leader ? Discuss.
(e) “Herbert Simon's book Administrative Behavior presents a synthesis of the classical and behavioural approaches to the study of Public Administration." Explain.

Q2. (a) Dwight Waldo in his book, The Administrative State emphatically mentions that the roots of administrative theory lie in political theory. Critically examine Waldo's contention.
(b) “The Phenomenological Approach advocated by the New Public Administration has obstructed the path of theory building in Public Administration." Comment.
(c) Discuss the essential characteristics of public sector-centred and market-centred perspectives in Public Private Partnerships and also compare the two.

Q3. (a) Communication represents the “Nerves of Government" (Karl Deutsch). How can the communication system in the government be made more effective, responsive and motivational ?
(b) "Political and administrative systems have reciprocal relationship.” Discuss.
(c) "An effective Management Information System (MIS) is the key to successful headquarter-field relationships."Comment.

Q4. (a) “Form of an organisation influences the success of a public enterprise, but the choice of a form has always remained problematic." Discuss the statement in the context of the comparative merits and limitations of departments, corporations, companies and boards. Give illustrations.
(b) "Chester Barnard's model of 'Contribution-Satisfaction Equilibrium' is still considered a logical model of organisational motivation." Do you agree? Give arguments.
(c) "The political approach to Public Administration stresses on the values of representativeness political responsiveness and accountability through elected officials to the citizenry" (David H. Rosembloom). Comment.

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Current Affairs MCQ for UPSC Exams - 13 June 2019

Q1. Union Cabinet has approved the Aadhaar and Other Laws (Amendment) Bill 2019 to replace Aadhaar and Other Laws (Amendment) Ordinance 2019.
Which of the following statements regarding the same are true ?

1) This will enable UIDAI to have a more robust mechanism to serve the public interest and restrain the misuse of Aadhar.
2) After the amendment, all individuals will be compelled to provide proof of possession of Aadhaar number to undergo authentication for the purpose of establishing his identity.
3) For the convenience of the general public in the opening of bank accounts, the proposed amendments will allow the use of Aadhaar number for authentication on a voluntary basis as an acceptable KYC document.

a) 1 & 2 only
b) 2 & 3 only
c) 1 & 3 only
d) all of the above

Q2. Consider the following pairs of bilateral military exercises conducted by India with the corresponding nations :

1) Mitra Shakti : Srilanka
2) Al Nagah : Israel
3) Maitree : Bangladesh
4) Ajeya Warrior : United Kingdom
5) Surya Kiran : Nepal

Which of the above pairs are correctly matched ?
a) 1,2 & 3 only
b) 1,4 & 5 only
c) 2 & 4 only
d) all of the above

Q3. Consider the following statements :

1) The impact of Climate Change on farmers, especially small and marginal ones is high in any part of the country. If the affected areas are flood-prone and drought-prone, the impact is enormous.
2) National Institute of Rural Development and Panchayati Raj (NIRDPR) has launched a training programme of Sustainable Livelihoods and Adaptation to Climate Change (SLACC) to help Rural Poor Farm Holds adapt to Climate Change and sustain their livelihoods.
3) Total 638 drought and flood-prone villages all over India will be covered as pilot basis under this first of its kind initiative.

Which of the above statements are true ?
a) 1 & 2 only
b) 2 & 3 only
c) 1 & 3 only
d) all of the above

Q4. Which of the following statements regarding the The Defence Research and Development Organisation (DRDO)’s indigenously developed Hypersonic Technology Demonstrator Vehicle (HSTDV) are true ?

1) Through the HSTDV project the idea was to demonstrate the performance of a scram-jet engine at an altitude of 15 km to 20 km, is on.
2) It can be used for launching satellites at low cost. It will also be available for long-range cruise missiles of the future.
3) In scram-jet technology, combustion of fuel takes place in a chamber in the missile at hypersonic speeds whereas in a ramjet engine air is collected from the surrounding atmosphere during the flight at supersonic speeds.

a) 1 & 2 only
b) 2 & 3 only
c) 1 & 3 only
d) all of the above

Q5. 19th Shanghai Cooperation Organization(SCO) Summit is all set to begin in Bishkek from today. Bishkek is the capital city of which of the following countries ?

a) Kazhakstan
b) Kyrgyzstan
c) Uzbekistan
d) Turkmenistan

 

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Dark side of the Moon: Chandrayaan-2 mission will enter uncharted territory, offer great scientific insight (Indian Express)

Mains Paper 3: Science and Technology
Prelims level: Chandrayaan-2
Mains level: Significance of the Chandrayaan-2 mission

Context

•  The Indian Space Research Organisation (ISRO) has finally announced the date of its much-awaited Chandrayaan-2 mission to the moon.
•  The mission will be launched on July 15, and its lander and rover will touch down on the moon’s surface either on September 5 or 6.

Background

•  The Chandrayaan-2 mission has taken a long way coming, considering that its predecessor, Chandrayaan-1, an Orbiter mission, had been sent way back in 2008.
•  According to the original schedule, Chandrayaan-2 was to be launched in 2012 itself, but at that time it was supposed to be a collaborative mission with the Russian space agency, Roskosmos, which was to provide the lander module.
•  The Russians, however, withdrew from the missions after their similarly-designed lander for another mission developed problems in 2011.
•  That left ISRO to design, develop and build the lander on its own, something it has not done earlier, which has led to considerable delay from the original schedule.

A sequel to Chandrayaan-1

•  The Chandrayaan-1 mission, which was launched in October 2008, was ISRO’s first exploratory mission to the moon, in fact to any heavenly body in the space.
•  That mission was designed to just orbit around the moon and make observations with the help of the instruments on board.
•  The closest that Chandrayaan-1 spacecraft came to the moon was in an orbit 100 km from its surface.
•  For largely symbolic reasons, though, the Chandrayaan-1 mission did make one of its instruments, called Moon Impact Probe, or MIP, a 35-kg cube-shaped module with the Indian tricolour on all its sides, to crash-land on the moon’s surface.
•  But that did not, apparently, just leave an Indian imprint on the moon’s surface. ISRO claims that while on its way, MIP had sent data that showed evidence for the presence of water on the moon.
•  Unfortunately, those findings could not be published because of anomalies in calibration of the data.
•  The confirmation for water had come through another onboard instrument, the M3 or Moon Mineralogy Mapper, that had been put by NASA.
•  Chandrayaan-2 is a logical progression on Chandrayaan-1. It is a more sophisticated mission designed to pack in a whole lot of science.

India’s first lander mission

•  Chandrayaan-2 consists of an Orbiter, Lander and Rover, all equipped with scientific instruments to study the moon.
•  The Orbiter would once again watch the moon from a 100-km orbit, while the Lander and Rover modules will separate and make a soft-landing on moon’s surface.
•  ISRO has named the Lander module as Vikram, after Vikram Sarabhai, the pioneer of India’s space programme, and the Rover module as Pragyaan, meaning wisdom.
•  Once on the moon, the rover, a six-wheeled solar-powered vehicle, will detach itself from the lander, and would slowly crawl on the surface, making observations and collecting data.
•  It will be equipped with two instruments, and its primary objective would be to study the composition of the moon’s surface near the landing site, and determine its abundance of different elements.
•  The 1471-kg lander, which will remain stationary after touching down, will carry three instruments that will mainly study the moon’s atmosphere. One of the instruments will also look out for seismic activity on lunar surface.
•  While the lander and rover are designed to work for only 14 days (1 lunar day), the Orbiter, a 2379-kg spacecraft with seven instruments on board, would remain in orbit for a year.
•  It is equipped with different kinds of cameras to take high-resolution three-dimensional maps of the surface.
•  It also has instruments to study the mineral composition on the moon and the lunar atmosphere, and also to assess the abundance of water.

Chandrayaan-2 to enter uncharted territory

•  With Chandrayaan-2, India will become only the fourth country in the world to land a spacecraft on the moon.
•  So far, all landings, human as well as non-human, on the moon have been in areas close to its equator.
•  That was mainly because this area receives more sunlight that is required by the solar-powered instruments to function.
•  Earlier this year, in January, China landed a lander and rover on the far side of the moon, the side that is not facing the earth.
•  This was the first time that any landing had taken place on that side. The Chinese mission, Chang’e 4, was designed to function for three lunar days (three periods of two-weeks on Earth, interspersed with similar two-week periods which is lunar night), but has outlived its mission life and entered its fifth lunar night.
•  Chandrayaan-2 will make a landing at a site where no earlier mission has gone, near the South pole of the moon. It is a completely unexplored territory and therefore offers great scientific opportunity for the mission to see and discover something new.
•  Incidentally, the crash-landing of the MIP from the Chandrayaan-1 mission had also happened in the same region.
•  The south pole of the moon holds the possibility of the presence of water, and this is one aspect that would be probed meticulously by Chandrayaan-2.
•  In addition, this area is also supposed to have ancient rocks and craters that can offer indications of history of moon, and also contain clues to the fossil records of early solar system.
  50 years after first human landed on moon
•  The Chandrayaan-2 mission comes very close to the 50th year of the first human landing on moon, which happened on July 20, 1969.
•  There has been a renewed interest in sending humans to moon all over again, with the United States already having announced its intention to launch a manned mission to the moon soon.

Way ahead

•  India has announced that it will launch its first human space mission, Gaganyaan, before the year 2022.
•  A human mission to the moon could be the next logical step forward, though no one is talking about it as yet.
•  A successful Chandrayaan-2 and Gaganyaan would, however, no doubt set the stage for the human mission to the moon.

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Back to Kashmir with an open heart (The Hindu)

Mains Paper 2: Polity
Prelims level: Not much
Mains level: Conducting election process

Context

•  Before the 2019 general election, Prime Minister Narendra Modi asserted that the problem in Jammu and Kashmir has been kept confined to “two-and-a-half districts” and that the panchayat polls (December 2018) were an indication of the enthusiasm in the State for democratic processes.
•  It is surprising that he has been able to make this claim unchallenged.
•  The attempt to put off the Assembly elections till after the Amarnath yatra is a piece of this distortion.

Beyond the lockdown

•  On April 4, over a month-and-a-half after the Pulwama attack (in February), an announcement was made that the National Highway between Baramulla and Udhampur would be closed to civilian traffic for two days a week to facilitate convoy movements.
•  It did not get the attention it deserved in the national media, but many security planners were aghast.
•  The highway is a lifeline for the local population, with many lateral roads and passes through more than two-and-a-half districts.
•  The armed forces are so heavily deployed and the necessity for supplies and replenishments so constant that they use the roads more than two days in a week.
•  If the ban now stands lifted, it was because it is untenable.

A sense of alienation

•  The panchayat polls, held over as many as seven phases, were marked by the absence of the mainstream political parties such as the Congress or the National Conference or the Peoples Democratic Party.
•  It is not prudent to interpret the enthusiasm here and project it on to the Assembly elections.
•  A parsing of the panchayat poll figures also shows a different reality, marked by astoundingly low polling in many wards, no representatives in hundreds of other wards, overall something that was reiterated more effectively in the Lok Sabha election.
•  In the parliamentary constituencies of Baramulla, Srinagar and Anantnag, voter turnout dipped while in the Shopian and Pulwama areas there was hardly any enthusiasm.
•  At dozens of booths no one turned out to vote, the most dismal voting figures since the late 1980s.
•  That’s how far back Mr. Modi’s policies have set the clock. Not the best advertisement for a problem that is confined merely to two-and-a-half districts.

Arresting the drift

•  Though the Prime Minister often says that he has taken the high road of his predecessor Atal Bihari Vajpayee (recall the former Prime Minister’s ‘Insaniyat, Jamhooriyat, Kashmiriyat’ formulation) there is little evidence of this on the ground and in the minds of Kashmiris.
•  Only if the stage is set for an early Assembly election can something be salvaged.
•  By not holding Assembly elections soon, the two-and-a-half district problem is not going to be halved.
•  The bulk of the Indian Army is not deployed in West Bengal because of some trifling two-and-a-half district problem.
•  It is deployed in Kashmir. If the problem was indeed so small, it should have been easy enough to have held the Lok Sabha and the Assembly elections simultaneously in J and K.
•  The results of the Lok Sabha election have confirmed the deep political divisions.

Way forward

•  It is easy enough to find reasons not to hold polls till an option suitable to New Delhi emerges: it is easy enough to cite the “tourism season” and the Amarnath yatra to put off the decision till November, when the capital shifts to Jammu.
•  In the 1990s, when Governor’s Rule was imposed for nearly seven years, militancy soared.
•  The longer the decision is put off, the more young and educated people, who are already disillusioned with the way things are going in that area, are going to drift towards militancy.
•  Now that the Prime Minister has made a conciliatory start, he should extend the same sense of inclusiveness to the Kashmir Valley, and begin anew.

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Starting at three: On RTE progress (The Hindu)

Mains Paper 2: Education
Prelims level: National Education Policy
Mains level: Highlighting the draft of National Education Policy

Context

•  India’s far-sighted Right to Education Act is making slow progress in mainstreaming equity, in the absence of a strong political commitment in several States.
•  The proposal to extend its scope to younger children through early childhood education is, however, wholly positive.

Highlights of the draft National Education Policy

•  The move suggested in the draft National Education Policy to put children three years and older in a stimulating nursery environment is a welcome logical measure.
•  The pedagogical view is that the pre-school phase is crucial to stimulate a child’s curiosity and help her prepare for schooling at age six.
•  The NEP proposal to infuse the existing child development schemes, which are primarily nutrition-oriented, with a learning component is in line with this thinking on holistic development.
•  An extension of the RTE would be a big step forward, but in the absence of measures that will deepen equity, the law cannot be transformative.
•  The Centre has to guarantee that in its totality, the Right to Education will encompass all schools bar those catering to minorities.
•  This is necessary to achieve its moral goal of bringing quality schooling to all in the 6-14 age group; adding the early childhood section, now under the Ministry of Women and Child Development, will then be meaningful. Unfortunately, the evidence indicates that only 12.7% schools comply with the law’s requirements, and at the pace seen since RTE became law in 2010, it will take decades to achieve full coverage.

Key implications

•  Giving all children aged three and above the right to an education can become a reality only if the state is willing to live up to its promise of devoting more financial resources.
•  An expenditure of 6% of GDP on education could have transformed the sector, given the large wealth generated since economic liberalisation.
•  But far less is spent for instance, 2.7% in 2017-18. The lost years have cost millions a brighter future, but the draft NEP provides an opportunity to make amends.
•  Bringing more children into the formal stream needs a well-thought-out road map.
•  The Centre has to play a leadership role to ensure that States, some of which have done a poor job of implementing the RTE Act, are persuaded to implement urgent reform.
•  The NEP’s proposal to have well-designed school complexes, where pre-primary to secondary classes will be available, is in itself an ambitious goal that will require mission-mode implementation.

Way forward

•  Shortcomings in anganwadi centres must be addressed in the expansion plan.
•  State governments will have to fill teacher vacancies and ensure that the training of recruits is aligned to scientific, child-oriented teaching methods.
•  Education reform is vital to prepare for a future in which cutting-edge skills will be necessary for continued economic progress.
•  Changes to the RTE Act that will prepare all children for a more productive schooling phase can help make India’s educational system morally fair and more egalitarian.

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Navigations in Bishkek (The Hindu)

Mains Paper 2: International Relations
Prelims level: Shanghai Cooperation Organization
Mains level: India and its neigbourhood relations

Context

•  At the 19th Shanghai Cooperation Organization (SCO) summit in Bishkek, Kyrgyzstan, India will have to navigate between two contradictory imperatives.
•  While on the one hand it must act as a willing partner of regional cooperation led by China and Russia, on the other it must avoid being seen as a part of the ‘anti-American gang’.
•  It could also be seen as a paradox that India wants to fight against terrorism through a body that includes states that pose the biggest threats to Indian security.

Trade and terrorism

•  In Bishkek, Russia and Central Asian countries are likely to express “broad support” for China in its escalating tariff fight against the U.S. India is equally concerned about this trade war, but it is unclear whether it will join the others in slamming U.S. protectionism.
•  New Delhi is seemingly confident of dealing with the U.S. without necessarily supporting China.
•  For Chinese President Xi Jinping, whipping up anti-Americanism serves to stave off mounting opposition against his anti-corruption campaign and concentration of power.
•  It is also notable that all SCO members barring India are enthusiastic supporters of the Belt and Road Initiative (BRI).
•  SCO Secretary General Vladimir Norov has hinted at adopting documents to deepen multilateral cooperation and discussing non-conventional issues such as the fight against drug trafficking, cooperation in IT, environmental protection and healthcare.
•  Terrorism is likely to be approached from the angle of improving the situation in Afghanistan and not necessarily of curbing the terrorist elements emanating from Pakistan.
•  China is sure to offer its experiences of dealing with counterterrorism, and the deradicalisation measures it has taken in Xinjiang. China’s achievement in expanding its high-speed rail network to restive Xinjiang comes with enormous economic and security implications for Eurasia.
•  China has also enhanced its military projection capabilities to meet any potential crises beyond its western frontiers.

On the sidelines

•  Prime Minister Narendra Modi’s meeting with President Xi on the sidelines of the summit will be critical, especially as Mr. Modi is now being guided by his new External Affairs Minister.
•  This meeting also comes after China’s decision to withdraw its technical hold on listing Jaish-e-Mohammad chief Masood Azhar as a global terrorist at the United Nations Security Council (UNSC).
•  The key concern for the two leaders is the impact of the U.S.-China trade war, but judging from the trends, both sides seem to be gearing up for a big settlement of pending bilateral issues.
•  Mr. Modi’s meeting with Russian President Vladimir Putin is important to save the S-400 contract deal against Washington’s mounting threat to act under CAATSA. India and Russia have an ambitious economic agenda drawn up for 2019, and Mr. Putin might reiterate his invitation to Mr. Modi to be the chief guest at the Eastern Economic Forum in Vladivostok in September.
•  It would be a good opportunity for India to explore Russia’s Far East region not just for developing economic cooperation but also for exploring the prospects of transferring skilled labourers to offset Chinese demographic threats in the region.
•  Russia is also keen that India joins the Arctic: Territory of Dialogue Forum.
  Develop cooperative and sustainable security framework
•  India seems committed to work within the SCO to develop a ‘cooperative and sustainable security’ framework, to make the Regional Anti-Terrorist Structure more effective, and participate in efforts to bring about stability in Afghanistan.
•  Even though the regional aspirations of Central Asian countries contradict India’s goals, these countries back India’s proposal for a Comprehensive Convention on International Terrorism.
•  Mr. Modi is certain to bring up India’s resolve to fight terrorism by drawing the SCO’s attention to the attacks in Pulwama and Sri Lanka.
•  But China would not like India to use the SCO to name and shame Pakistan.
•  India may stick to its position on BRI, but accelerating progress on the International North-South Transport Corridor, the Chabahar Port, the Ashgabat Agreement and the India-Myanmar-Thailand Trilateral Highway should be very much on the cards.

The Pakistan policy

•  The India-Pakistan stalemate endures but the environment has changed a little since India’s air strikes in Balakot. Pakistan Prime Minister Imran Khan has been less belligerent, but whether the Pakistani military is taking tougher measures to curb anti-India terror groups is not known.
•  Mr. Khan will have to demonstrate clearly if he wants Mr. Modi to give diplomacy a chance should they meet on the margins of the SCO meet.
•  Mr. Modi might chart a new policy course in favour of normalising ties, especially since India has scored a point with Masood Azhar being designated as a global terrorist at the UNSC.
•  Pakistan places high hopes on the SCO to regulate key regional security issues (Afghanistan and Kashmir) even though the SCO discourages bilateral disputes to be raised.
•  Its other agenda would be to sell the Gwadar Port as a potential passage to landlocked Central Asian states, besides promoting the China-Pakistan Economic Corridor for regional economic integration and security cooperation.

Conclusion

•  To be sure, none of the institutional-level measures including the joint SCO military exercises have so far entailed any satisfactory results in jointly fighting against terrorism.
•  The SCO is relevant for India to garner support for reforms of the UNSC to make the latter more representative and effective.
•  India has been lending support to the member countries’ candidatures for non-permanent membership of the UNSC for a long time.

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(Download) UPSC IAS Mains Exam 2018 - General Studies (Paper-4) Paper 
Ethics, Integrity, and Aptitude

Exam Name: UPSC IAS Mains General Studies (Paper-4)

Year: 2018

​​​​​SECTION A

Q1. (a) State the three basic values, universal in nature, in the context of civil services and bring out their importance. (150 words) 10 Marks

Q1. (b) Distinguish between “Code of ethics” and “Code of conduct” with suitable examples. (150 words) 10

Q2. (a) What is meant by public interest? What are the principles and procedures to be followed by the civil servants in public interest? (150 words) 10

Q2. (b) “The Right to information Act is not all about citizens? Empowerment  alone, it essentially redefines the concept of accountability.” Discuss. (150 words) 10

Q3. (a) What is meant by conflict of interest? Illustrate with examples, the difference between the actual and potential conflicts of interest.(150 words) 10

Q3. (b) “In looking for people is hire, you look for three qualities integrity intelligence and energy. And if they do not have the first, the other two will kill you.” – warren Buffett. What do you understand by this statement in the present-day scenario” Explain. (150 words) 10

Q4. (a) “In doing a good thing, everything is permitted which is not prohibited expressly or by clear implication.” Examine the statement with suitable examples in the context of a public servant discharging his/her duties. (150 words) 10

Q4. (b) With regard to morality of actions, one view is that means are of paramount importance and the other view is that the ends justify the means. Which view do you think is more appropriate? Justify your answer. (150 words) 10

Q5. (a) Suppose the Government of India is thinking of constructing a dam in a mountain valley bound by forests and inhabited by ethnic communities. What rational policy should it resort to in dealing with unforeseen contingencies? (150 words) 10

Q5. (b) Explain the process of resolving ethical dilemmas in Public Administration. (150 words) 10

Q6. What do each of the following quotations mean to you in the presence context?

(a) “The true rule, in determining to embrace, or reject any thing, is not whether it has any evil in it; but whether it has more evil than good. There are few things wholly evil or wholly good. Almost every thing especially of governmental policy, is an inseparable compound of the two; so that our best judgement of the preponderance between them is continually demanded.” – Abraham Lincoln. (150 words)

(b) “Anger and intolerance are the enemies of correct understanding - Mahatma Gandhi. (150 words).

(c) “Falsehood takes the place of truth when it results in unblemished common good.” – Tirukkural. (150 words).

​​​​​SECTION B

Q7. Rakesh is a responsible district level officer, who enjoys the trust of his higher officials. Knowing his honesty, the government entrusted him with the responsibility of identifying the beneficiaries under a healthcare scheme meant for senior citizens.

The criteria to be a beneficiary are the following:

• (a) 60 years of age or above

• (b) Belonging to a reserved community.

• (c) Family income of less than Rs. 1 lakh per annum.

• (d) Post-treatment prognosis is likely to be high to make a positive difference to the quality of life of the beneficiary.

One day, an old couple visited Rakesh’s office with their application. They have been the residents of a village in his district since their birth. The old man is diagnosed with a rate condition that causes obstruction in the large interstate. As a consequences he had severe abdominal pain frequently that prevents him from doing any physical labour. The couple have no children to support them. The expert surgeon whom they contacted is willing to do the surgery without charging any fee. However, the couple will have to bear the cost of incidental charges, such as medicines, hospitalization etc. to the tune of 1lakh. The couple fulfills all the criteria except criterion ‘b’. However, any financial not would certainly make a significant difference in their quality of life.

How should Rakesh respond to the situation? (250 words)

Q8. An a senior officer in the Ministry, you have access to important policy decisions and upcoming his announcements such as road construction projects before they are notified in the public domain. The Ministry is about to announce a mega road project for which the drawings are already in place. Sufficient care was taken by the planners to make use of the government land with minimum land acquisition from private parties. Compensation rate for private parties was also finalized as per government land with minimum deforestation. Once the project is announced, it is expected that there will be a huge spurt in real estate prices in and around that area.

Meanwhile, the Minister concerned insists that you realign the road in. such a way that it comes closer to his 20 acres farm house. He also suggests that he would purchase of is big plot of land in your wife's name at the prevailing rate which is very nominal, in and around the proposed mega road project. He also tries to convince you by saying that there is no harm in it as he is buying the land legally. He even promises to supplement your savings in case you do not have a sufficient funds to buy the land. However, by the act of realignment, a lot of agricultural land has to be acquired, thereby causing considerable financial burden on the government, and also displacement of the it' this is acct, enough, it will involve cutting down of a large number of trees, denuding the area of its green cover.

Faced with this situation, what will you do ? Critically examine various conflicts of interest, and explain what are your responsibilities as a public servant. (250 words) 20

Q9. It is a State where prohibition is in force. You are recently appointed as the Superintendent of police of a district notorious for illicit distillation of liquor. The illicit liquor leads to many deaths, reported and unreported, and causes a major problem for the district authorities.

The approach till now had been to view it as a law and order problem and tackle it accordingly. Raids, arrests, policies cases, criminal trails – all these had only limited impact. The problem remains as serious as ever.

Your inspections show that the parts of the district where the distillation flourishes are economically, industrially and educationally backward. Agriculture is badly affected by poor irrigation facilities. Frequent clashes among communities gave boost to illicit distillation. No major initiatives had taken place in the past either from the government’s side or from social taken place in the past either from the government’s side or from social organizations to improve the lot of the people.

Which new approach will you adopt to bring the problem under control ? (250 words)20

Q10. A big corporate house is engaged in manufacturing industrial chemicals on a large scale. It proposes to set up an additional unit. Many states rejected its proposal due to detrimental effect on the environment. But one State government acceded to the request and permitted the unit, close to a city, brushing aside all opposition.

The unit was set up 10 years ago and was in full swing till recently. The pollution caused by the industrial effluents was affecting the industrial effluents was affecting the land water and crops in the area. It was also causing serious health problem to human beings and animals. This gave rise to a series of agitations demanding the closure of the plant. In a recent agitation thousands of people took part, creating a law and order problem necessitating stern police action. Following the public outcry, the State government ordered the closure of the factory.

The closure of the factory resulted in the unemployment of not only those workers who were engaged in the factory but also those who were working in the ancillary units. It also very badly affected those industries which depended on the chemicals manufactured by it.

As a senior officer entrusted with the responsibility of handling this issue, are you going to address it ? (250 words) 20

Q11. Dr. X is a leading medical practitioner in a city. He has set up a charitable trust through which he plans to establish a super-speciality hospital in the city to cater to the medical needs of all sections of the society. Incidentally, that part of the State had been neglected over the years. The proposed hospital would be a boon for the region.

You are heading the tax investigation agency of that region. During an inspection of the doctor’s clinic, your officers have found out some major irregularities. A few of them are substantial which had resulted in considerable with holding of tax that should be paid by him now. The doctor is cooperative. He undertakes to pay the tax immediately.

However, there are certain other deficiencies in his tax compliance which are purely technical in nature. If these technical defaults are pursued by the agency, considerable time and energy of the doctor will be diverted to issues which are not so serious, urgent or even helpful to the tax collection process. Further, in all probability, it will hamper the prospects of the hospital coming up.

There are two options before you:

• (i) Taking a broader view, ensure substantial tax compliance and ignore defaults that are merely technical in nature.

• (ii) Pursue the matter strictly and proceed on all fronts, whether substantial or merely technical.

As the head of the tax agency, which course of action will you opt for and why? (250 words) 20

Q12. Edward Snowden, a computer expert and former CIA systems administrator, released confidential Government documents to the press about the existence of Government surveillance programmes. According to many legal experts and the US Government, his actions violated the Espionage Act of 1917, which identified the leak of State secrets a an act of treason. Yet, despite the fact that he broke the law, Snowden argued that he had a moral obligation to act. He gave a justification for his “whistle blowing” by stating that he had a duty to inform the public as to that which is done in their name and that is done against them.”

According to Snowden, the Government’s violation of privacy had to be exposed regardless of legality since more substantive issues of social action and public morality were involved here. Many agreed with Snowden. Few argued that he broke the law and compromised national security, for which he should be held accountable.

Do you agree that Snowden’s actions were ethically justified even if legally prohibited? Why or why not? Make an argument by weighing the competing values in this case. (250 words) 20

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Fight fake news on Facebook (Live Mint)

Mains Paper 2: Governance
Prelims level: Fake News
Mains level: Mechanism and process for curbing the fake news

Context

• The findings were made public as part of the 2019 CIGI-Ipsos Global Survey on Internet Security and Trust.
• According to a new survey of internet users globally, social media companies have emerged as the top source of user distrust on the internet.
• Seventy-five per cent of those surveyed cited Facebook, Twitter and other social media platforms for their lack of trust.
• Facebook was the most commonly cited source of fake news.

Analysing the data

• Seventy-seven per cent of the users on the social media platform said they came across fake news on the website, followed by 62% in case of Twitter and 74% for other social media users.
• Nine per cent of users on Facebook said they closed their accounts in the past year as a result of fake news.
• The survey says that in India, 14% closed their accounts in the past year on account of fake news.
• The findings were made public as part of the 2019 CIGI-Ipsos Global Survey on Internet Security and Trust.

Measures needed to be taken

• It’s evident that despite Facebook’s efforts to curb the spread of misinformation, the perception among users of the platform in this context is not favourable.
• Measures such as disrupting economic incentives, building products to tackle the issue and helping users make informed decisions when they come across fake news have their own place.
• But before blaming the company for the state of affairs, one must also consider the fact that it’s quite arguably the most popular social media platform in the world, and thus an easy target for those who wish to benefit from false propaganda or by swaying public opinion.

Conclusion

• So, it is imperative that the user exercises discretion and does not accept at face value any news feed that may be contentious.
• In fact, the user can be proactive in fighting the menace. Cross-check and even flag it to the platform, if need be.
• Let’s care before we share.

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Currency management needs an overhaul (The Hindu)

Mains Paper 3: Economy
Prelims level: Currency Management
Mains level: Overhaul for currency management

Context

• The chorus for reduction of real interest rates as the panacea for the current economic slowdown is getting louder.
• From commentators to administrators to economists, that seems the only item on the menu these days.
• The macro imbalance is a result of allowing excessive capital flows.
• As a result, the exchange rate has ceased to be competitive.

About Currency management

• Interest rates (nominal and real), inflation, forex rates and reserves, investments, capital account convertibility and foreign investment flows (all from the input or causative side) and growth, output and employment on the resultant side are intricately interconnected.
• There seems a need to look at things comprehensively and evolve a framework agreement between the RBI and the government.
• The actual rates post facto have consistently been lower (far lower) than the forward rates (rates quoted today for dollar that will be delivered say three, six months later).
• The first one is determined based on the difference in inflation rates over the period concerned, and the second one based on difference in nominal interest rates.
• If the real interest rates are deducted from nominal, then the movement in both should be determined by difference in inflation, provided there are no excess capital flows vis-a-vis the CAD.

Overhaul for currency management

• The persistence of actual rate being way less than forward rate represents a serious imbalance and causes problems in domestic competitiveness, flow of foreign currency, investment absorptive capacity, etc.
• For example, if apples (representative of a basket of goods) are selling at Rs 50 in India and $1 overseas, then exchange rate should be ideally 1$ = Rs 50.
• Say, next year Indian apples have suffered an inflation of 10 per cent and have gone up to Rs 55. But apples overseas have suffered an inflation of 2 per cent and gone up to $1.02.
• Then the exchange rate should be Rs 55/1.02 = 53.93.
• But if the exchange rate is kept at say Rs 51, then the Indian exporter will get 1.02$ X 51 = 52.02 Rs /apple while he is able to get Rs 55 selling it domestically.
• Why would he export? To overcome this, we should allow the Re to correct.
• This will happen if we match the $ supplies into India with its net exports.

Contours of a new framework

• The framework pact between the government and the RBI should cover all essential variables, not just one or two in isolation. Such an agreement should cover the following.
• Limits on forex inflows: The inflows should be calibrated to match the absorptive capacity of the economy and its investment needs. While capital account convertibility can remain, RBI has to limit the quantum either at total levels or under each major source of inflow. Reserves are a costly loss-making insurance asset (much like gold with individuals) whose costs are far more than the difference between interest earned and paid. IThe limits can be +/- 1-2 per cent of what is required to plug the CAD or 6 months’ imports +/- 2 weeks.
• Maintenance of competitiveness: Competitiveness comprises two elements — the physical and the currency. Physical competitiveness comes from technology, scale, skills, IPRs, and natural resource endowments over which neither the RBI nor the government may have control. Currency, distorted by capital flows, needs to stay competitive which can be achieved only if it floats freely to reflect the inflation differential.
• Forex rates: RBI should be mandated to maintain the REER values (now the exchange rate is far lower than the REER value). The present massive divergence can be settled now on a one-time basis, with no more than 2-3 per cent deviation being permitted subsequently.
• Recalibrating REER values: Again, instead of using the general inflation numbers of the countries to arrive at an REER band, it should be the inflation of major input costs (including interest costs) of goods and services traded between India and its major trading partners.
• There are real dangers of currencies as a whole being governed by factors other than what determines competitiveness.
• Real interest rates:Real interest rates should be mandated to be within 5-10 bps spread over interest rates in competing countries and those investing into India. High real interest rates and overvalued currency may encourage debt flows more than investments in real assets and FDIs.
• Inflation: Divergence between estimated actuals and realised actuals after the end of period is difficult to control even for items like forex rates. It’s time we move on to inflation targets for 3-4 major groups. Food inflation is more politically sensitive and socially damaging than white goods or real estate.
• Stability of laws: The last 4-5 years have seen sudden sharp changes in rules governing provisioning, NPAs, default status, etc. and levels of support to distressed assets even those which are clean but facing stretched cash flows. Changes should factor in reasonable adjustment period.

Quid Pro Quo

• If these are corrected, governments should undertake to do the following:
• To stay within the 3-4 per cent fiscal deficit targets,
• To smoothen MSP increases based on fundamentals rather than subject to political whims and fancies,
• To curtail interest declared on mandated savings like PF, PPF etc.,and
• Not to announce arbitrary minimum wages.

Conclusion

• The current economic impasse is arising out of highly overvalued currency, uncompetitive real interest rates and inflows far in excess of absorptive capacity.
• The entire burden of spurring growth and employment hence falls on the government which has to substitute for the private sector, rendered uncompetitive due to these imbalances.
• An agreement on the above lines would go a long way in kick starting growth and employment.

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Giving solar power a leg-up (The Hindu)

Mains Paper 3: Economy
Prelims level: Rooftop solar
Mains level: Renewable energy resources

Context

• India’s renewables transition has so far been a success story, with the share of renewables capacity increasing sharply in recent years.
• Today, wind and solar account for about 20 per cent (70 GW) of the total installed capacity of about 350 GW, of which solar’s share is 27 GW (it was just 3 GW in 2014).
• In another remarkable inflection point, addition in renewables capacity has outstripped that of thermal generation in recent times.
• Of the 16 GW capacity added in 2018, solar accounted for nearly 70 per cent, with coal accounting for 28 per cent and wind 14 per cent.

Background

• Clearly, with the falling costs of panels and battery storage, solar lies at the centre of the renewables turnaround.
• However, the creation of solar capacity has largely occurred in the utility solar space, with rooftop capacity accounting for just 5 GW.
• While it is a fact that utility solar is able to sell power at ₹2-2.5 a unit, against ₹4-4.5 in the case of rooftop solar, a shift in the mix towards the latter is desirable on many counts.
• Rooftop solar is decentralised, it empowers ordinary people and communities, and does not require land acquisition.
• It will provide smaller units in particular with a cheap, reliable source of electricity.
• Discoms and the power regulator merely need to ensure that installation standards are met.

Reasons behind promoting rooftop solar

• Discoms are averse to promoting rooftop solar for at least three reasons.
• First, with utility solar, they are able to cross subsidise in a bigger way.
• Second, besides, the current net metering formula in many States does not offer any gains to Discoms.
• Third, rooftop solar also threatens to further destabilise their finances.
• To open access purchase and captive generation already account for a rising share of total power purchase by large-scale commercial consumers, putting the Discoms’ cross-subsidy model in jeopardy.
• If rooftop solar gains ground, it will lead to a further exodus of buyers.
• This will hurt both the availability as well as the cost of electricity for agriculture users and poor consumers. Clearly, cross-subsidisation cannot carry on.
• As experts have observed, Discoms need to overhaul their business model by separating their functions of wiring and providing electricity.
• Short-term open access, that often throws Discoms’ power purchase plans out of gear, should not be encouraged.
• Net metering rules for rooftop solar should be tweaked to make them attractive for Discoms as well.
• As with renewable purchase obligations, the Discoms should be given tangible net metering targets.

Conclusion

• The argument that excessive solar feed-in will destabilise the grid is somewhat overblown, as the grid can be strengthened to deal with the situation.
• The long-term gains, environmental and economic, will offset such an investment. Germany’s renewables transition has been driven by rooftop solar.
• With a bit of policy incentive, grid-connected rooftop solar can become a major force in sunshine-abundant India as well.

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A welcome verdict: On Kathua rape case (The Hindu)

Mains Paper 2: Polity
Prelims level: Kathua rape case
Mains level: Judiciary process

Context

• The trial court verdict finding three men guilty of the horrific gang-rape and murder of an eight-year-old girl in Jammu and Kashmir’s Kathua district last year must be seen as the victory of justice over communal propaganda.
• It is the answer that due process has given to sectarian interlopers who sought to derail the investigation and trial by projecting the heinous crime against a girl belonging to the nomadic Bakerwal tribe as a plot to implicate Hindus.
• It is also a triumph for the justice system, as the Pathankot district and sessions court has lived up to the faith reposed in it by the Supreme Court last year, when the case was transferred from J and K to Punjab for a fair trial.

Highlighting the judgments

• The apex court had taken note of the hindrances to a fair trial in the jurisdictional court, especially the hostile atmosphere against the prosecution.
• The formation of a group called the Hindu Ekta Manch in support of those arrested and the role played by members of the Bharatiya Janata Party, including two Ministers in the then J and K government, had whipped up communal frenzy.
• It is commendable that the Crime Branch of the J and K Police and the prosecutors have brought home the guilt of Sanji Ram, Parvesh Kumar and Deepak Khajuria, who have been sentenced to life for murder and 25 years in prison for gang-rape.
• Further, the role of some police personnel in trying to destroy evidence has also been exposed.
• Sub Inspector Anand Dutta, Special Police Officer Surender Verma and Head Constable Tilak Raj get a five-year term for washing some blood-stained clothes, concealing the victim’s necklace and hair band, and misleading the investigating police team about the place of occurrence of the crime.

About the investigation process

• The investigation had been fairly quick, and the charge-sheet was prepared in two months.
• The trial lasted a year, and the verdict has been delivered within 17 months of the occurrence.
• Appeals by the convicts are only to be expected, and the Judge Tejwinder Singh’s approach and the manner in which he appreciated the evidence would be determined by higher courts.
• Even the prosecution may appeal against the acquittal of one of the accused, whose alibi that he was appearing in an examination in Uttar Pradesh at the time of the incident has been accepted.
• Some may question the verdict for not imposing the death penalty in what was presented as a crime aimed at dislodging the Bakerwal community from the territory.

Conclusion

• However, it is a needless cavil, as what matters is that criminal liability has been established and a life term, which ought to mean the remainder of the convicts’ natural life, has been awarded.
• The larger takeaway is that efficient investigation, diligent prosecution and judicial sensitivity can ensure speedy justice in all cases, and more particularly in cases of ghastly crimes that cause widespread revulsion and outrage. It is indeed a judgment that will inspire confidence in the justice system.

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Squandering the gender dividend (The Hindu)

Mains Paper 2: Governance
Prelims level: Periodic Labour Force Survey
Mains level: Reason behind declining WPR ratio

Context

• If labour force survey data are to be believed, rural India is in the midst of a gender revolution in which nearly half the women who were in the workforce in 2004-5 had dropped out in 2017-18.
• The 61st round of the National Sample Survey Office (NSSO) recorded 48.5% rural women above the age of 15 as being employed either as their major activity or as their subsidiary activity but this number dropped to 23.7% in the recently released report of the Periodic Labour Force Survey (PLFS).

Incremental decline

• Before we turn to examining these changes, it is important to note that the drop in work participation by rural women is not sudden.
• The latest data from the PLFS simply continue a trend that was well in place by 2011-12.
• Worker to population ratio (WPR) for rural women aged 15 and above had dropped from 48.5% in 2004-5 to 35.2% in 2011-12, and then to 23.7% in 2017-18.
• In contrast, the WPR for urban women aged 15 and above declined only mildly, changing from 22.7% in 2004-5 to 19.5% in 2011-12, and to 18.2% in 2017-18.

Review of Worker to population ratio

• If the WPR is declining due to rising incomes, we would expect it to be located in richer households with higher monthly per capita expenditure and among women with higher education.
• A comparison of rural female WPRs between 2004-5 and 2017-18 does not suggest that the decline is located primarily among the privileged sections of the rural population.
• Between 2004-5 and 2017-18, women’s WPR declined from 30.6% to 16.5% for the poorest expenditure decile, and from 31.8% to 19.7% for the richest expenditure decile.
• More importantly, most of the decline in the WPR has taken place among women with low levels of education.
• For illiterate women, the WPR fell from 55% to 29.1% while that for women with secondary education fell from 30.5% to 15.6%.
• This broad-based decline with somewhat higher concentration among the least educated and the poorest is consistent with the industries and occupations in which it has occurred.
• Decomposing the 24.8 percentage point decline in women’s WPR between 2004-5 and 2011-12, the decline in work on family farms and allied activities contributed the most (14.8 percentage points), followed by casual wage labour (8.9 percentage points) and in work on family enterprises in other industries (2.4 percentage points).
• These were counter-balanced by a 0.7 percentage point increase in regular salaried work and a 0.5 percentage point increase in engagement in public works programmes such as Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
• Most of the decline 23.1 percentage points out of 24.8 came from reduced participation in agriculture and allied activities.

Men’s participation in agriculture

• Among men aged 15 and above, 56.1% participated in agriculture in 2004-5, while only 39.6% did so in 2017-18.
• However, men were able to pick up work in other industries whereas women reduced their participation in other industries as well as agriculture resulting in a lower WPR.
• Therein lies the conundrum for rural women. Mechanisation and land fragmentation have reduced agricultural work opportunities for both men and women.
• Other work opportunities, except for work in public works programmes, are not easily open to women.
• This challenge is particularly severe for rural women with moderate levels of education.
• A man with class 10 education can be a postal carrier, a truck driver or a mechanic; these opportunities are not open to women.
• Hence, it is not surprising that education is associated with a lower WPR for women; in 2016-17, 29.1% illiterate women were employed, compared to only 16% women with at least secondary education.

Raising questions from the survey

• The NSSO and PLFS survey design relies on two questions.
• First, interviewers assess the primary activity in which respondents spent a majority of their prior year.
• Then they note down the subsidiary activity in which individuals spent at least 30 days.
• If individuals are defined as working by either primary or subsidiary criteria, they are counted among workers.
• This is a categorisation that serves well in cases where agriculture is the primary activity and various agriculture-related tasks can be grouped together to comprise the 30-day threshold.
• But as demand for agricultural work declines and women engage in diverse activities, their work tends to become fragmented.
• A woman who spends 15 days on her own field during the sowing period, 10 days as a construction labourer and 15 days in MGNREGA work should be counted as a worker using the subsidiary status criteria, but since none of the activities exceed the 30 days threshold, it is quite possible that interviewers do not mark her as being employed.
• On-going experimental research at the National Council of Applied Economic Research’s National Data Innovation Centre (NCAER-NDIC) suggests a tremendous undercount of women’s work using standard labour force questions, particularly in rural areas.
• This is not to suggest that fixing the problem of undercount in surveys is the solution to declining WPRs.
• The undercount is a symptom of the unfulfilled demand for work.
• Although women try to find whatever work they can, they are unable to gain employment at an intensive level that rises above our labour force survey thresholds.
• This suggests an enormous untapped pool of female workers that should not be ignored.

Possible solutions

• Establishment of the Cabinet Committee on Employment and Skill Development is a welcome move by the new government.
• It is to be hoped that this committee will take the issue of declining female employment as seriously as it does the issue of rising unemployment among the youth.
• Not all policies need to be gender focussed.

Conclusion

• One of the most powerful ways in which public policies affect rural women’s participation in non-agricultural work is via development of transportation infrastructure that allows rural women to seek work as sales clerks, nurses and factory workers in nearby towns.
• If the cabinet committee were to focus on multi-sectoral reforms that have a positive impact on women’s work opportunities, the potential gender dividend could be far greater than the much celebrated demographic dividend.

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Current Affairs MCQ for UPSC Exams - 11 June 2019

Q1. India has called upon the G-20 countries to urgently fix the issue of taxing profits made by digital economy companies in countries where they do not have significant physical presence. Which of the following statements with respect to the above context are true ?

1) The aim is to bring offshore companies with significant economic presence in India into the tax net to address the shortcomings in taxing the digital economy.
2) Offshore digital companies such as Facebook, Google and Netflix have little presence in India, taxing their profits is not possible.
3) This prompted the government to roll out equalization levy as a tax deducted at source on payments made to them by Indian firms with effect from April 2018.

a) 1 & 2 only
b) 2 & 3 only
c) 1 & 3 only
d) all of the above

Q2. Which of the following countries constitutes the Nordic countries ?

1) Iceland
2) Russia
3) Norway
4) Georgia
5) Denmark

a) 1,2 & 3 only
b) 3,4 & 5 only
c) 1,3 & 5 only
d) all of the above

Q3. Which of the following statements regarding the National cyclone risk mitigation project (NCRMP) are true ?

1) The Government of India has initiated the National Cyclone Risk Mitigation Project (NCRMP) with a view to address cyclone risks in the country.
2) The overall objective of the Project is to undertake suitable structural and non-structural measures to mitigate the effects of cyclones in the coastal states and UTs of India.
3) National Disaster Management Authority (NDMA) under the aegis of Ministry of Home Affairs(MHA) will implement the Project in coordination with participating State Governments and the National Institute for Disaster Management (NIDM).

a) 1 & 2 only
b) 2 & 3 only
c) 1 & 3 only
d) all of the above

Q4. Consider the following statements regarding the ethical concepts of adoption of Artificial Intelligence :

1) AI has several positive applications, but the capability of AI systems to learn from experience and to perform autonomously for humans makes AI the most disruptive and self-transformative technology of the 21st century.
2) Given the importance of intention in India’s criminal law jurisprudence, it is essential to establish the legal personality of AI (which means AI will have a bundle of rights and obligations), and whether any sort of intention can be attributed to it.
3) Germany has come up with ethical rules for autonomous vehicles stipulating that human life should always have priority over property or animal life.

Which of the above statements stands true ?
a) 1 & 2 only
b) 2 & 3 only
c) 1 & 3 only
d) all of the above

Q5. India is set to adopt the “Osaka summit declaration” in near future. The declaration pertains to which of the following ?

a) To adopt the climate change resolutions put forwarded in Paris summit.
b) Deliberations on trade, investment and digital economy.
c) For the conservation of archaeological sites in the routes of swadesh darshan scheme.
d) To promote artificial intelligence in the banking as well as insurance sectors.
 

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Artificial Intelligence, the law and the future (The Hindu)

Mains Paper 3: Science and Tech
Prelims level: Artificial Intelligence
Mains level: Artificial Intelligence challenges and laws if disputes arises

The merits of a free ride (The Hindu)

Mains Paper 1: Society
Prelims level: Not Much
Mains level: Gender equality and promotion of public transport

Foreign policy challenges five years later (The Hindu)

Mains Paper 2: International Relations
Prelims level: BIMSTEC, SAARC
Mains level: India’s foreign policies and challenges

Neighbours first (Indian Express)

Mains Paper 2: International Relations
Prelims level: Nishan Izzuddin
Mains level: India and its neighbourhood relations

A new India for farmers (Indian Express)

Mains Paper 3: Economy
Prelims level: Regional Comprehensive Economic Partnership
Mains level: Improving agricultural programmes

From Plate to Plough: The farm-factory connect (Indian Express)

Mains Paper 3: Economy
Prelims level: agri-GDP growth
Mains level: Situation of Indian factories related to farming

Context

•  As per the last report of National Statistical Office (NSO) released on May 31, the Gross Value Added (GVA) at basic prices (2011-12 prices) for the fourth quarter (Q4) of 2018-19 has slumped to 5.7 per cent for the overall economy, 3.1 per cent for manufacturing, and -0.1 percent for agriculture, forestry and fishery.
•  However, for the entire financial year, FY19, GVA growth is more respectable 6.6 per cent for the economy, 6.9 per cent for manufacturing and 2.9 per cent for agriculture.
•  Incidentally, for the Narendra Modi government’s first five-year stint (2014-15 to 2018-19), agri-GDP grew at 2.9 per cent per annum. Many experts believe that agriculture cannot grow at more than 3 per cent per annum on a sustainable basis.

Situation of Indian factories related to farming

•  Indian industry is today complaining that the rural demand is collapsing.
•  Tractor sales are down by 13 per cent, two-wheeler sales are down by 16 per cent, car sales are down by similar percentage, and even FMCG (fast move consumer goods) sales are down in April 2019 over April 2018.
•  One of the reasons is that India has never had any major agri-reforms and farmers’ incomes have remained very low.
•  But there have been periods, reasonably long enough, when agri-GDP has grown well above 3 per cent.
•  In fact during the 10 years of UPA from 2004-05 to 2013-14, agri-GDP grew at 3.7 per cent per annum.
•  This dropped to 2.9 per cent during the NDA’s stint between 2014-2019.
•  When the masses do not gain, the demand for manufactured goods remains limited, slowing down the wheels of industry.
•  During UPA-2, agri-exports more than doubled, from $18.4 billion in 2009-10 to $43.6 billion in 2013-14. B
•  ut during Modi 1.0, they declined, going down to $ 33.3 billion in 2015-16 and then recovering to $ 39.4 billion by 2018-19 but still below the peak of 2013-14.

Steps required boosting up agri-trade

•  Officials managing agri-trade need to pay heed to this massive failure as it has implications not only for overall agri-GDP growth, but also for slowing down of manufacturing growth due to sluggish demand for industrial products in rural areas.
•  There is ample evidence that much of Indian agriculture is globally competitive. But our restrictive policies constrain the private sector from building direct supply chains from farms to ports, which bypass the mandi system. This leads to a weak infrastructure for agri-exports.
•  The net result of all this is that Indian farmers do not get full advantage of global markets. Further, an obsessive focus on inflation targeting by suppressing food prices through myriad controls works against the farmer.
•  If these policies continue, Prime Minister Modi’s target of doubling farmers’ real incomes by 2022-23 will remain a pipe-dream.
•  It has to be noted that any attempt to artificially prop up farmers’ prices through higher minimum support prices (MSPs), especially in relation to global prices, can be counterproductive.
•  MSPs remain largely ineffective for most commodities in larger parts of India.
•  But even if they are operational through massive procurement operations, a policy of high MSPs can backfire when it goes beyond global prices.

Rice production and export scenario

•  India is the largest exporter of rice in the world, exporting about 12 to 13 MMT of the cereal per year.
•  If the government raises the MSP of rice, by say 20 per cent, rice exports will drop and stocks with the government will rise to levels far beyond the buffer stock norms. It would be a loss of scarce resources.
•  Besides, it would create unnecessary distortions adversely impacting the diversification process in agriculture towards high-value crops. This needs to be avoided.
  Global competitiveness in agriculture
•  Our global competitiveness in agriculture can be bolstered by investment in agri-R&D and its extension from lab to land, investment in managing water efficiently and investment in infrastructure for agri-exports value chains.
•  Today, India spends roughly 0.7 per cent of agri-GDP on agri-R&D and extension together. This needs to double in the next five years.
•  The returns are enormous. The meagre investments in Pusa Basmati 1121 and 1509, for example, have yielded basmati exports between $ 4 and 5 billion annually.
•  The returns from the sugarcane variety Co-0238 in Uttar Pradesh are similarly impressive.
•  The recovery ratio has increased from about 9.2 in 2012-13 to more than 11 per cent today.

Conclusion

•  Massive investments are also needed in managing our water resources more efficiently, to produce more with less.
•  But augmenting productivity alone without pushing for export markets can lead to glut at a home and depress farm prices, shrinking their profitability.
•  So, first think of markets and then give a push to raise productivity and exports simultaneously.

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Manufacturing sector’s ‘missing middle’ (The Hindu)

Mains Paper 3: Economy
Prelims level: India’s industrial policy
Mains level: Highlights of the India’s industrial policy

Context

•  The contribution of manufacturing to GDP in 2017 was only about 16 per cent, stagnating since the economic reforms began in 1991.
•  In India, manufacturing has never been the leading sector in the economy other than during the Second and Third Plan periods.
•  But no major country managed to reduce poverty or sustain growth without manufacturing driving economic growth. India needs an Industrial Policy, which it has not had since 1991.

Features of the India’s industrial policy

•  India’s manufacturing sector has been characterised by the missing middle: a concentration of small/micro firms at one end of the spectrum, and some large firms in each sector at the other.
•  One purpose of an industrial policy is for the government to encourage scale economies, by encouraging growth of small firms into bigger ones to fill the missing middle.
•  India has almost 5,000 clusters spread across the country where most unorganised segment manufacturing employment is concentrated.
•  It accounts for 40 per cent of manufacturing GDP and over 50 per cent of exports.

Policy fragmentation

•  Also, cluster programmes are administered by several ministries (Textiles, Leather, Food, MSME, Heavy Industry (auto)) under different terms and conditions.
•  This fragmentation of policy must end. Serious planning for clusters requires industrial planning, both at the Central and State levels.
•  There are at least four sets of actions required for cluster programmes by the Centre technology upgradation, skill development, market information facilitation, and design improvement.
  Stimulation cell
•  The Planning Commission (2013), in the 12th Plan, made an excellent recommendation to set up a Cluster Stimulation Cell at the apex level in the MSME Ministry, that will work to promote cluster associations.
•  But this kind of cell will need replication at the State level, and mechanisms to make them operationally effective at the district level.
•  This requires funds. Effective cluster development has been very important to China’s industrial development (as well as in late-industrialiser Italy).
•  There are as many as 100 clusters in China only producing socks!
•  About 1,234 manufacturing clusters are in urban locations mostly, and as unorganised segment enterprises.
•  In addition, there are others: handicrafts and other manufactures 3,110; handloom 573, thus a total of 4,917.
•  They are mostly in small towns (< 0.5 million population) or in small (0.5-1 million) and medium cities (1-4 million).

Cluster Development programme

•  India’s Cluster Development programme, which took off only in 2005, will need much more than the ₹1,000 crore per annum, the budget of the Ministry of Micro, Small and Medium Enterprises, for the 5,000 clusters in India.
•  Also notable is the biased nature of the MSME Ministry’s incentives, financial and non-financial which favour micro and small capital investment enterprises to the detriment of their growth into medium-sized enterprises.
•  The modern industry clusters will need much greater access to institutional sources of credit. The limited resources of the Small Industries Development Bank of India (SIDBI) cannot suffice.

The skills factor

•  To raising cluster productivity requires skills. At local cluster level there are few vocational or training centres available.
•  If new vocational education/training were focussed at cluster level, newly educated youth will get employment at cluster level, close to their homes.
•  This equally applies to girls, as for cultural reasons their parents will not let them live away from home; gender parity at secondary level with GER at 80 per cent now requires a new focus on vocational training at cluster level to make these boys and girls employable.
•  With rising education levels, the government should promote other opportunities.

Online trade

•  These brownfield clusters could benefit hugely from the spread of internet and online sales to utilise the educated youth in rural/semi-urban areas. Online trade is an example of how technology shapes the geography of jobs. Technology can enable clusters of business to form in under-developed and rural areas.
•  For instance, in China, rural micro e-tailers began to emerge in 2009 on Taobao.com Marketplace, one of the largest online retail platforms in China owned by Alibaba.
•  These clusters referred to as “Taobao Villages” spread rapidly, from just three in 2009 to 2,118 across 28 provinces in 2017. India’s 50,500-odd clusters can benefit from similar activities.
•  India’s smartphone users are upwards of 350 million at present, and e-commerce can enable MSMEs to access larger markets and source cheaper inputs.
•  Apart from Central interventions, States with an Industrial Policy (Karnataka, Andhra Pradesh, Kerala, Telangana, Tamil Nadu, Chhattisgarh, Punjab, Madhya Pradesh, Uttar Pradesh) should focus on job creation through cluster development.

Way forward

•  However, the shares of agriculture and industry in the credit by commercial banks declined from the 1990s onwards.
•  As a share of non-food gross bank credit, lending to SSIs fell from 15.1 per cent in 1990-91 to 6.5 per cent in 2005-06, 5.7 per cent in 2010-11, and only 4.9 per cent in 2017-18.
•  This is over and above the high cost of interest (11 per cent versus 4 per cent in China).
•  But government needs to employ blockchain technology to help SMEs in such clusters in financing.
•  Thus Mahindra Finance, currently uses blockchain in SME financing by connecting suppliers, OEMs, and financiers for sharing data securely over the network chain to request and approve transactions.

  Online Coaching for UPSC PRE Exam