General Studies Model Test Paper for IAS Mains Exam - 2013

1. 'The permanent solution to the poverty problem in India lies in improving the performance of the agricultural sector.' Elucidate the statement with special reference to MGNREGA and argue whether recent changes in the programme are capable of strengthening the above linkages. (10 marks, 200 words)

•  Indian poverty is primarily rural in character and is largely dependent onagriculture.

•  Urban poverty is an outgrowth of rural poverty to a great extent.

•  Programmes like MGNREGA can help in reducing rural poverty and hence check its spread to urban sector also.

•  Recent changes can both be beneficial and problematic.

•  Linking MGNREGA to agriculture can be good as it would both create employment and develop agriculture.

•  But, its limitation to the most backward districts may only worsen the earlier benefits of the scheme as it goes against self selecting features of the scheme.

2. 'The Indian economic growth till 2008 was primarily because of significant increase in foreign capital inflows and its reversal after 2008 can be blamed on the outflows of foreign capital'. Do you agree? Comment with reference to the supply side constraints being seen in the Indian economy recently. (10 marks, 200 words)

•  While the statement is generally regarded to be true, it can be debated on some counts.

•  Foreign capital inflows had an important role in growth till 2008, but growth was also due to better fiscal discipline and increase in Savings and Investment rate.

•  Post- 2008 situation is even less related to foreign capital movement.

•  The initial slowdown coincides with foreign capital outflows but continuation of slowdown despite enough foreign capital in the country has been seen.

•  Role of supply side constraints important as growth went together with higher inflation. Some such constraints are higher prices of crucial inputs like coal, higher food grains prices which has kept cost of production higher in economy thereby impacting growth.2

3. 'Employment growth in India in the post 1991 period has been dismal both in quantitative and qualitative terms.' Do you agree? Give arguments with reference to increasing informal sector and gender bias in employment distribution in India.
(10 marks, 200 words)

•  1990s has been a decade of jobless growth as GDP growth rate far exceeded the employment growth rate.

•  Situation improved in the first half of 2000s but from 2004 to 2009 employment growth has been even more dismal.

•  Most of the employment that has been generated has gone in Informal sector. Construction sector, which mainly employs informal labour has contributed mainly to employment creation. NSSO claims that more significant fall has taken place in Female Labour force and Male Labour force has either remained the same or declined marginally.

4. 'Land reforms have become obsolete in the context of contemporary agricultural development in India.' Comment and argue about the relative importance of land, labour and capital related reforms in the Indian agricultural sector. (10 marks, 200 words)

•  Land reforms not obsolete as relation between the farmers and land still important for agricultural growth.

•  Labour related reforms closely related to land reforms as once labour given rights over land, automatically the problem of agricultural labour gets solved to an extent.

•  But these reforms must be complemented with other reforms to make it work.

•  Labour needs to be skilled. Farmers should know about proper use of fertilizers, water etc. and should have information about price changes.

•  Capital reforms should be in Irrigation infrastructure, but merely building capital is not important. Farmers should have working knowledge of using capital through programmes like agricultural extension.

5. 'Crude oil price deregulation policy in India after 1991 has been designed to suit the government's priorities and not as a comprehensive focus on the market mechanism.' Elucidate the statement with some arguments on how a balance between crude oil pricing and welfare can be achieved in India. (10 marks, 200 words)

•  Deregulation has taken place when crude oil prices have been declining as consumers face lower market prices. But when market prices go up the government faces criticism and tends to bring down prices.3

•  Petrol prices deregulated in 1990s when market price was lower but later with higher market prices, it brought criticism.

•  Similarly diesel price getting deregulated now as lower market prices.

•  We need a long term strategy and a transparent way to determine price of these products and also ensure welfare.

•  Once deregulated, oil marketing companies should be charging less mark up rather comparing it with import parity price.

•  Also, the price of substitutes in certain sectors like electricity in agriculture should be priced properly so that there should be level playing field.

6. 'India's stand on food security in WTO is counter-productive to both Indian free trade policy and sustainable agricultural growth.' Do you agree? Give arguments to support your answer. (10 marks, 200 words)

•  Free Trade Policy argues for lower subsidy to agriculture as it impacts the welfare of the farmers of other countries.

•  Domestically, it is biased in favour of the farmers who are getting subsidy compared to those who are not.

•  Higher subsidies like MSP encourage farmers to cultivate crops not suited to the geographical conditions.

•  It also depletes the precious resources like water and costly inputs like electricity. This goes against sustainable agricultural development.

•  However, an argument against the above statement is that poor farmers in India need support when such support is available in other ways to the farmers of developed countries.

7. Financial Inclusion is necessary for inclusive growth. Discuss. (10 marks, 200 words)

•  Inclusive growth implies participation as well as sharing the benefits from the growth process. In this way inclusive growth is both an outcome and a process. Financial Inclusion is considered to be an important determinant for social inclusion of poor and vulnerable. It is one of the essential conditions for reduction of poverty and socio-economic inequalities in the society.

•  Financial Inclusion is perceived as a public good in most of the developing countries. A public good is non-rival in consumption and non-excludable.

•  The positive externalities associated with financial inclusion are
  1. The value of the entire national financial system increases it.4
  2. The fuller participation by all in the financial system makes monetary policy
  more effective and thus enhances the prospects of non-inflationary growth.

•  Discuss measures taken by RBI and GOI for Financial Inclusion

•  Financial inclusion in India can be facilitated by following ways:
  1. Restructuring financial architecture fitting to the needs of inclusive growth
  2. Usage of Mobile Banking
  3. More use of Business Facilitator and Business Correspondent
  4. Micro Finance Institutions
  5. Active role of educational institutes for furthering financial inclusion

•  Conclusion

8. Bring out the importance of food processing industries in India. What measures have been adopted in recent years to promote this sector? (10 marks, 200 words)

•  Vital linkages and synergies that it promotes between the two pillars of our economy, industry and agriculture

•  Improvement in the value addition chain

•  Food security

•  Diversity in Cropping Pattern

•  Elimination of post-harvest losses

•  Improve the income levels of the farmers

•  Impetus to Economy and creation of jobs

•  Controlling Inflation - Indirect Effect Steps taken by the government:

•  In line with this policy the Department of Food Processing Industries has launched concessional finance schemes. The schemes cover the entire spectrum of activities involved with food processing such as post-harvest infrastructure including cold chain, food quality and safety, packaging, research and development and promotion of processed food.

•  Export-oriented units are permitted to import raw materials and capital goods free of duty. Zero duty import is also permitted, for capital goods. Export earnings are exempted from corporate tax.

•  Automatic approval for foreign investment up to 51 per cent is allowed. Even where investment is more than 51 per cent, approval is given on a case-to-case basis by the Foreign Investment Promotion Board (FIPB)

•  Deregulation of the sector and No need of any licenses except in the case of alcoholic beverages5

•  FDI limits have been relaxed, Excise duties have been reduced, export subsidies given

•  National mission on food processing, Vision2015 for food processing,

•  New schemes for mega food parks, cold chain etc.

•  Many states have reformed their outdated APMC laws.

9. What is meant by monetary stimulus? What has been the impact of expansionary monetary policy adopted by advanced nations on the emerging market economies like India? (10 marks, 200 words)

Monetary Stimulus - An attempt by a government to make the economy grow
faster by increasing the money supply (the amount of money in the economy).
Impact of Expansionary Monetary Policy on Emerging market economies like
India –

• Inflationary effects

•  Risk of asset volatility as Quantitative Easing (QE) by advanced nations may throw up such a risk

•  Currency fluctuations

•  Impact on CAD

•  Boost domestic consumption

10. Explain the concept of all-India Goods and Services tax (GST). How will it benefit the economy at large? (10 marks, 200 words)

•  GST is a value added tax to be levied on both goods and services (except for a list of exempted goods and services), at both the centre and state level (Central GST and State GST respectively). This is a single tax which will be levied on the product or service which is sold.

• The system allows the set-off of GST paid on the procurement of goods and services against the GST which is payable on the supply of goods or services. However, the end consumer bears this tax as he is the last person in the supply chain.

•  Experts say that GST is likely to improve tax collections and boost India's economic development by breaking tax barriers between States and integrating India through a uniform tax rate.

•  GST is expected to be a critical reform in spurring growth in the economy. When introduced, GST will not only make the tax system simpler, but will also help in 6 increased compliance, boost tax revenues, reduce the tax outflow in the hands of the consumers and make exports competitive. Simpler tax structure
      Increased tax revenues
      Competitive pricing
      Boost to exports

11. What is meant by inflation targeting? Discuss the feasibility of adopting this as a major objective of RBI’s monetary policy. (10 marks, 200 words)

•  Inflation targeting is an economic policy in which a central bank estimates and makes public a projected, or "target", inflation rate and then attempts to steer actual inflation towards the target through the use of interest rate changes and other monetary tools.

•  Discuss the need for Inflation targeting as a major objective of RBI to analyse its feasibility.

•  Cite the recommendations of Urijit Patel committee on inflation targeting and its recommendation like CPI as the main anchor for inflation and not WPI as was being done, Repo rate to be higher than CPI, Main objective of RBI to control inflation, Role of monetary policy Committee

12. Why are NPAs of banks rising? What measures can be adopted to address this problem? (10 marks, 200 words)

•  As per the economic survey, Increase in NPAs of banks is mainly accounted for by switchover to system-based identification of NPAs by PSBs (public sector banks), and aggressive lending by banks in the past, especially during good times

•  Increase was sharp in case of infrastructure; Infrastructure, iron and steel, textiles, aviation and mining are five main sector that are stressed and the reasons are different for all the five sectors. Policy initiatives, Litigation, Scams(Coal Scam), pricing of raw materials, Land Acquisition issues etc…

•  Slowing economic growth and high interest rates have crimped the ability of many borrowers to repay their debts, causing bad loans to pile up at banks.  Priority Sector lending: One of the main causes of NPAs in the banking sector is the Directed loans system under which commercial banks are required to supply 40% percentage of their credit to priority sectors.
  Measures to overcome:7
  Various steps have been taken by the government and RBI to recover and reduce NPAs. The strategies that the banks can take are –
  1. Preventive management – To avoid a situation that an asset turns into NPA using Early Warning Signals; Financial warning signals; Management related warning signals; Banking related signals; Creating a list of Willful Defaulters
  2. Curative management – These are steps that can be taken once a loan has turned into NPA - One Time Settlement Schemes; Lok Adalats; Debt Recovery Tribunals (DRTs); Securitization and SARFAESI Act
  The government can bring about policy reforms for bringing in growth in the five sectors which account for the major share of NPAs. Sector specific reforms to boost growth, lowering tariffs, Tax reforms etc could be some. Revival of economy is very vital for the recovery of NPAs. Also on the cards is recapitalization by disinvesting its stakes in the public sector banks.

13. Write short notes on
(10 marks, 200 words)

(a) APMC Act The APMC have been made specifically responsible for:

(a) ensuring complete transparency in pricing system and transactions taking place in market area;
(b) providing market-led extension services to farmers;
(c) ensuring payment for agricultural produce sold by farmers on the same day;
(d) promoting agricultural processing including activities for value addition in agricultural produce; and
(e) publicizing data on arrivals and rates of agricultural produce brought into the market area for sale.
(f) Setup and promote public private partnership in the management of agricultural markets.
(g) Provision made for the appointment of Chief Executive Officer of the Market Committee from among the professionals drawn from open market.

(b) India Food Park

•  Union Government has approved 17 food parks across the country over the next few months with each park estimated to attract a minimum investment of about Rs 125 crore. Two have already become operational - one at Haridwar in Uttarakhand and another at Chittoor in Andhra Pradesh.

•  Four more parks, one each at Tumkur in Karnataka, Fazilka in Punjab,
  Murshidabad in West Bengal and Khargone in Madhya Pradesh will be
  completed by the end of 2014.

•  The Mega Food Park Scheme is based on cluster approach and are based on hub and spoke model. It aims at facilitating the establishment of a strong food processing industry backed by an efficient supply chain, which includes 8 collection centres, central processing center (CPC) and cold chain infrastructure.
  (c) RuPay RuPay provides a platform for e- transactions and offers enhanced security measures in addition to the RBI mandated 2-Factor authentication viz. registration, OTP, image based authentication and anti-phishing measures.

•  Highly secure with unique anti-phishing properties

•  User friendly and smooth adaptability

•  Simplified architecture & transaction flow reduces transaction time, resulting in faster transaction processing and reduction in drop-outs

•  Customer Experience: During the online payment the cardholder’s authentication data is collected in a secured manner. Further, with help of a bank themed
  (Looks exactly similar to the card that the customer is holding) PIN pad the cardholder has to enter the PIN number while making the payment. The pad shuffles each time a digit is entered as an additional security measure.

14. What do you understand by superbugs in public health? List out the superbugs found in India. Suggest a roadmap to tackle the challenges of emergence of such superbugs. (10 marks, 200 words)

Superbugs are resistant bacteria, virus and fungus which are able to withstand attack by antimicrobial medicines such as antibiotics, antivirals and antifungals. Superbugs in India
MDR – TB (Multidrug resistant TB) and XDR – TB (Extensively drug resistant)

MRSA – Methicillin resistant staphylococcus aureus.

NDM – 1: New Delhi Metallo Beta Lactamase enzyme producing bacteria like

Escherichia coli.

Tackling Superbug

Prevent irrational use of antimicrobial medicine both in humans and animal.

Monitoring system and creation of surveillance system for antibiotic resistance.

15. Discuss the features and significance of Zero Liquid Discharge (ZLD). (10 marks, 200 words)

Zero Liquid Discharge is a process that is beneficial to industrial and municipal organizations as well as the environment because it saves money and no effluent, or discharge, is left over. ZLD systems employ the most advanced wastewater treatment technologies to purify and recycle virtually all of the wastewater produced. Also Zero liquid discharge technologies help plants meet 9 discharge and water reuse requirements, enabling businesses to treat and recover valuable products from waste streams.

 The goal of any well – designed ZLD system is to minimize the volume of wastewater at source that requires treatment and practice wastewater recycling and reuse it in an economically – feasible manner. The technologies include reverse – osmosis, multiple effective crystallization or solvent stripping. A cheaper alternative can be engineered, tailor-made for industries producing a particular type and concentration of effluent waste.

 Benefits of ZLD Installing ZLD technology is beneficial for the plant’s water management; encouraging close monitoring of water usage, avoiding wastage and promotes  recycling by conventional and far less expensive solutions. High operating costs can be justified by high recovery of water (>90-95%) and recovering of several by-products from the salt. A more sustainable growth of the industry while meeting most stringent regulatory norms. Possibility of use of sewage for recovery of water, for industrial and municipaluse, using ZLD technologies. Reduction in water demand from the industry frees up water for Agriculture and Domestic demands.

16. What is the key ingredient of blue LED? How white LED light is produced? Discuss the role of LED lamps in combating climate change. (10 marks, 200 words)

The key ingredient is Gallium Nitride. Red, Green and Blue coloured LED mixed together produce white LED. Nobel Prize in Physics for 2014 was awarded to Isamu Akasaki, Hiroshi Amano and Shuji Nakamura for the invention of efficient blue LED With 20 percent of world’s electricity used for lighting, it has been calculated that optimal use of LED lighting cam reduce this to 4 percent. Energy efficient LED lamps form an important part of the effort to help slow carbon dioxide emission worldwide.

17. Nanotechnology has the potential to revolutionize the field of agricultural sector. Elucidate. (10 marks, 200 words)

Nanosensors linked to precision farming help detect soil moisture condition, crop growth, pest infestation in crops.10 Nanoscale fertilizer and pesticides are absorbed at a faster rate by plant roots. Increase in surface area to volume ratio reduces wastage and enhances their utilization efficiency reducing the input cost and increases crop yield. GPS linked nanosensors will increase quality of decision making enabling weed control, pest control and fertilizer application site specific, precise and effective.

18. What do you understand by Net Zero Building? Enumerate the steps taken by India to ensure Net Zero Building. (10 marks, 200 words)

The concept of a Net Zero Energy Building (NZEB), one which produces as much energy as it uses over the course of a year, recently has been evolving from research to reality. Currently, there are only a small number of highly efficient buildings that meet the criteria to be called “Net Zero”. As a result of advances in construction technologies, renewable energy systems, and academic research, creating Net Zero Energy building is becoming more and more feasible.

 The Indira Paryavaran Bhavan It is India’s first net zero energy building that has been constructed with adoption of solar passive design and energy-efficient building materials. The Indira Paryavaran Bhavan is one of the first buildings in India to have deployed energy efficiency and renewable energy technologies at a large scale. It is one of the exemplary projects to be rated under Green Rating for Integrated Habitat Assessment (GRIHA) and has set standards that can be emulated by upcoming buildings in the region.

 The building boasts an earthquake – resistant structure with a total plinth area of 31,488 sq.m. It covers only 30 percent of the total area, while more than 50 percent area outside the building is a soft area with plantation and grass. The building has a robotic parking system in the basement that can accommodate 330 cars. Thin – client networking system has been provided instead of conventional desktop computers to minimise energy consumption. “Buildings have an enormous impact on environment, human health and economy. The energy used to heat and power our buildings leads to consumption of large amounts of energy, mainly from burning of fossil fuels, oil, natural gases and coal, which generate significant amounts of carbon dioxide, the most widespread greenhouse gas. The successful adoption of green building strategies can maximise both the economic and environmental performances of buildings”.

The building has received GRIHA 5-star (provisional) rating for the following features: The design allows for 75 percent of natural daylight to be utilised to reduce energy consumption.

The entire building has an access friendly design for differently – abled persons.11 With an installed capacity of 930 kW peak power, the building has the largest rooftop solar system among multi- storied buildings in India.

The building is fully compliant with requirements of the Energy Conservation Building Code of Indian (ECBC). Total energy savings of about 40 percent have achieved through the adoption of energy efficient chilled beam system of air – conditioning. As per this, air – conditioning is done by convection currents rather than airflow through air handling units, and chilled water is circulated right up to the diffuser points unlike the conventional systems.

Green materials like fly ash bricks, regional building materials, materials with high recyclable content, high reflectance terrace tiles and rock wool insulation of outer walls have been used.

Use of renewable bamboo jute composite material for doorframes and shutters. UPVC windows with hermetically sealed double glass. Calcium Silicate ceiling tiles with high recyclable content and grass paver blocks on pavements and roads.

Reduction in water consumption has been achieved by use of low-discharge water fixtures, recycling of waste water through sewage treatment plant, use of plants with low water demand in landscaping, use of geothermal cooling for HVAC system, rainwater harvesting and use of curing compounds during construction.

19. What is Thirty Metre Telescope (TMT)? Discuss the significance of TMT and contributions of Indian scientists to TMT. (10 marks, 200 words)

First ground based astronomical telescope designed with adaptive optics. As the name of the instruments suggest, it has 30 meter diameter primary mirror. Adaptive optics help to make fine adjustments to its focus to account for the blurring effects of the earth’s thick atmosphere. USA, Canada, India, Japan and China are participating this project at Mount Kea, Hawai in U.S.A. TMT will be used to collect data on stars, planets and galaxies including evolution of universe. India is providing sophisticated components like actuators, edge sensors and segment support assembly for active optics.

20. What do you understand by gene patent? Discuss the judgement of US Supreme Court for myriad genetics for BRCA gene patent. (10 marks, 200 words)

GENE PATENTS A gene patent is a patent on a specific isolated gene sequence, its chemical composition, the processes for obtaining or using it, or a combination of such claims.12 The U.S Supreme Court ruled that “naturally occurring” human genes cannot be patented because they are a “product of nature” meaning that they cannot be claimed as a human invention.

 But it also permitted patents based on laboratory reconstructions of human DNA, known as complementary DNAs, or cDNAs. “Myriad did not create anything, and it found an important and useful gene, but separating that gene from its surrounding genetic material is not an act of invention.” And “groundbreaking, innovative, or even brilliant discovery does not by itself satisfy” the requirements for winning a patent. Overall, the ruling is a victory for two New York City advocacy groups that have waged a long campaign to get the patents knocked down: the American Civil Liberties Union (ACLU) and the smaller Public Patent Foundation (PUBPAT), which initiated the effort.

It was a defeat for the diagnostics firm Myriad Genetics of Salt Lake City. Five of its many patent claims on the human genes BRCA1 and BRCA2 have been gutted, although other claims remain intact. Myriad was using its patents to sue clinics and wrongly prevent them from doing independent diagnostic tests. Backed by many geneticists and medical groups, the advocates sought to have Myriad’s patents invalidated so that any lab could test without fear of a lawsuit for BRCA genes linked to breast and ovarian cancer.

The impact of the decision on other companies may depend on exactly how gene patent claims are worded. While the court ruled out “natural” DNA patents, it also permitted cDNA patents. Although” cDNA retains the naturally occurring exons of DNA ... it is distinct from the DNA from which it was derived and as a result, DNA is not a ‘product of nature’ and is patent eligible.

21. In light of Santosh Hegde Commission’s recommendations, established on the issue of Manipur encounter deaths due to imposition of AFSPA, examine the broader suggestions made to make AFSPA more humane and accountable. (10 marks, 200 words)

•  Commission was constituted to probe six encounter deaths in Manipur

•  Commission has suggested a three month timeframe to the government to decide whether to prosecute security personnel engaged in extra-judicial killings in insurgency hit areas.

•  Commission noted AFSPA was an impediment to establishment of peace in places like Kashmir.

•  Commission recommended review of the laws after every six months to see whether its implementation is actually necessary in that area or not.\

22. “The problem of Left Wing Extremism can only be tackled through the policy of balanced regional development”. – Examine. (10 marks, 200 words)

•  Problem of Naxalism was accentuated due to imbalanced regional development13

•  Failure of land reforms led to further disenchantment in the minds of the people

•  The government since 2003 Chief Minister’s conference has tried to bring development as a policy

•  Today development of physical infrastructure is coupled with investments in human development

•  A comprehensive national policy on Naxalism is needed where focus should be le-link security & development.

23. “The financial inclusion programmes have increased money laundering in the country.” Analyse the relationship with potential solutions. (10 marks, 200 words)

•  Under financial inclusion drive, people are encouraged to open bank accounts

•  Zero balance accounts are encouraged under the latest initiative of the government

•  These accounts further reduce the threshold for a launderer to do placement of her illegitimate wealth

•  Wealth placed in the bank is now integrated in the economy as part of integration

•  Mandatory PAN cards for all transactions of cash deposits in a bank and

• Customer Due Diligence will help curb the menace

24. The Assam – Nagaland border dispute, instigated by insurgent groups, is an instance of oil rivalry. Examine the dispute and suggest policy interventions for prevention. (10 marks, 200 words)

•  Border dispute originated since creation of Nagaland in 1963

•  In the last two decades geological studies have proven presence of oil in the Disturbed Area Belt

•  The recent conflict in Golaghat has re-ignited the issue and was instigated by insurgent groups.

•  Preventive strategy is First, fast-track and resolve the disputed Assam-Nagaland border.

•  Second, create specific list of land records and strengthen local administrative mechanisms that deal with land disputes.

•  Third, involve local social and tribal councils; the significance of tribal councils acting as facilitators and disabling violent response was starkly visible in the role played by the Ao Senden in 2007.

•  Fourth, disarm armed groups on both sides of the border. So long the state fails to enjoy monopoly over organized violence in these vulnerable areas; violence will continue to raise its ugly head.

25. To prevent terrorism, the access of financing to terror groups needs to be curbed. Suggest strategies that can be adopted to curb the menace of terrorism. (10 marks, 200 words)

•  Ratification and implementation of UN instruments

•  Criminalizing the financing of terrorism and associated money laundering

•  Freezing and confiscating terrorist assets

•  Reporting suspicious transactions related to terrorism

•  International cooperation amongst countries

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