Economic Development

Answer : The principal policy objective of food management is to ensure food security, particularly for the vulnerable, through timely and efficient procurement and distribution of food grains. This involves procurement of food grains from farmers at remunerative prices, building up and maintenance of buffer stocks, storage, movement, and distribution of food grains to consumers at affordable prices, and stability of food grains’ prices. The price instruments used are MSP and central issue price (CIP). The nodal agency that undertakes open-ended procurement, distribution, and storage of food grains is the Food Corporation of India (FCI) with other central and state agencies. Coarse grains are procured by state governments and their agencies. The National Agricultural Cooperative Marketing Federation of India Limited (NAFED), National Cooperative Consumers’ Federation of India Limited (NCCF), CWC, and SFAC are the central nodal agencies that undertake procurement of oilseeds and pulses under the Price Support Scheme (PSS) when the market rates of these commodities fall below MSP. However, procurement operations are found to be successful largely for rice and wheat and that too only in a few states like Punjab, Haryana, Andhra Pradesh, and Madhya Pradesh.

• State of food processing in India: Even though India is the largest producer of several agricultural commodities, there are high levels of losses in the supply chain. A study conducted by the Central Institute of Post-Harvest Engineering and Technology (CIPHET) in 2010 put the losses in the range of 0.8 per cent to 18 per cent and attributed them to several factors including non-availability of facilities for aggregation, packaging, storage, transportation, and cold chain and low level of processing of agricultural produce. In an emerging country like India, where growth with equity is a primary policy thrust, the development of the food-processing sector will address several concerns such as disguised unemployment in agriculture, rural poverty, food security, food inflation, improved nutrition, and prevention of wastage of food. Towards this end, the government is supporting creation of modern enabling infrastructure and efficient processing facilities. These initiatives include setting up of (i) mega food parks, (ii) cold chain, value addition and preservation infrastructure, (iii) new and modernization of existing abattoirs.

Answer : Indian agriculture, in spite of it declining share in the total GDP, has remained the backbone of the country’s economy. The contours of Indian agriculture started showing improvement after the Green Revolution with the introduction of High Yielding Varieties of agro-infrastructure such as irrigation, input supply, storage, marketing and distribution of food-grains.

• The revolution, however, was biased towards irrigated regions and the benefit from this was not shared equally among all the stakeholders across the country. Not with standing India’s journey of economic reforms since 1991, lack of availability of quality inputs coupled with less vibrant and deficient institutional reforms have continued to plague the Indian agriculture. Thus, the need of the hour is to map the existing agricultural infrastructure in the country and to find out issues & challenges for their speedy resolution.

Answer : The NBS roll out was flawed since urea was kept out of its ambit which has defeated the objective of balanced use of nutrients. While urea consumption has increased from 59 per cent to 66 per cent of total consumption in 2012-13 over 2010-11, per hectare consumption of fertilizer had declined from 140 kg to 128 kg over the same period. Current trends in agricultural output reveal that the marginal productivity of soil in relation to the application of fertilizers is declining. 8.28 Under the NBS, as of March 2014, farmers pay 61 to 75 per cent of the delivered cost of P and K fertilizers and the rest is subsidised by the centre. Fertilizer subsidy was 67,971 crore in 2013-14 (revised estimates—RE), an increase of 11 per cent over 2009-10. While the quantum of fertilizer subsidy is increasing, subsidy as a percentage of GDP has been declining since 2010.

Answer : The RBI set up the Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households (CCFS) in September 2013 under the Chairmanship of Dr Nachiket Mor. The Committee’s Report was released on 7 January 2014. Some of the key recommendations of the CCFS include:

• Universal Electronic Bank Account for every resident to be made available at the time of issuing the Aadhar number.
• Licensing, with lowered entry barriers but otherwise equivalent treatment, more functionally focused banks, including payment banks, wholesale consumer banks, and wholesale investment banks.
• Developing risk-based supervision processes for regional banks and strengthening existing ones before creating new regional banks.
• Reorienting the focus of NABARD, SIDBI, and NHB to be market-makers and providers of risk-based credit enhancements.
• Consolidating NBFC definitions into two categories: Core investment companies and other NBFCs. Restore permission of NBFCs-ND to act as business correspondents.
• On priority sector lending, while the Committee acknowledged that the current focus of the policy, on small farmers, small businesses, and weaker sections, was well placed, it recommended an approach that incentivizes each provider to specialise in one or more sectors of the economy and regions of the country. Government subsidies to be channeled as direct benefit transfers (DBTs) rather than as subventions or waivers.
  • All financial firms regulated by the RBI are required to have an internal process to assess suitability of products prior to advising clients with regard to them.
• Initiatives taken by the RBI for financial inclusion: The objective of financial inclusion is to extend financial services to the large hitherto unreserved population of the country to unlock its growth potential. To extend the reach of banking to those outside the formal banking system, various initiatives are undertaken by the Government of India (GoI) and RBI from time to time. PSBs opened 7840 branches in 2013-14 as compared to 4432 in 2012-13. They had a total of 96,853 automated teller machines (ATMs) by January 2014 as compared to 69,652 at the end of 2012-13.
• Pradhan Mantri Jan Dhan Yojana: This is a National Mission on Financial Inclusion encompassing an integrated approach to bring about comprehensive financial inclusion of all the households in the country. The plan envisages universal access to banking facilities with at least one basic banking account for every household; financial literacy, access to credit, insurance and pension facility. In addition, the beneficiaries would get RuPay Debit card having inbuilt accident insurance cover of ‘1 lakh. The plan also envisages channeling all Government benefits (from Centre / State / Local Body) to the beneficiary’s accounts and pushing the Direct Benefits Transfer (DBT) scheme of the Union Government.

Answer : In comparison with previous years, inflation showed signs of receding with average wholesale price index (WPI) inflation falling to a three-year low of 5.98 per cent during 2013-14. Consumer price inflation, though higher than the WPI, has also exhibited signs of moderation with CPI (new-series) inflation declining from 10.21 per cent during 2012-13 to about 9.49 per cent in 2013-14. Food inflation, however, remained stubbornly high during FY 2013-14. As inflation remained above the comfort level of the Reserve Bank of India (RBI), the tight monetary policy stance was maintained by the Central Bank. The depreciation of the rupee, following the taper indication by the Federal Open Market Committee (FOMC) in May 2013, also impacted the inflation situation.

However, the government and the RBI were quick to respond and announced immediate measures to arrest volatility and quell speculation. The RBI has since stuck to its commitment to bringing down inflation levels and maintained high rates in Q4 2013-14. Going forward, both wholesale and consumer price inflation in India is expected to inch downwards, paving the way for monetary easing, although, there are risks to the outlook for inflation from a possible sub-normal monsoon during 2014-15 as predicted by the IMD on account of El-Nino effect, possible step up in the pass-through of international crude oil prices, and exchange rate volatility.

Suggestive measures in this regard

The strategy to control inflation has to take into account the following factors:

• Move to market prices: It is important to be cognizant of the fact that deregulation of diesel prices, power–sector reforms, and generally the move from administered to market-determined prices will release suppressed inflation in the short run. Nevertheless, the consequent reduction in subsidy and fiscal deficit will have the salutary effect of reducing inflation.
• Improving efficiency of public programmes and breaking the wage-price spiral: The projects selected for schemes like the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) do not improve the productivity of the agricultural sector commensurately. The increasing wages under such schemes have reportedly created shortage of labour in the agricultural sector as well as caused a wage-price spiral. The solution lies in selection of productivity enhancing projects for ambitious public policy programmes like the MGNREGS.
• Rationalization of government support to farmers: If the policy of supporting farmers through MSP and procurement is to continue, the MSP should be scrupulously linked to the cost of production. Procurement should not be open-ended, and the practice of some state governments of charging as high as 14-15 per cent mandi fee/tax and paying high bonuses over and above the MSP must be discouraged. Experience has shown that the Food Corporation of India (FCI) has not been able to release enough stocks in the market to soften cereal prices while recovering its economic cost. While farmers can be incentivized by gradually removing restrictions on exports, the FCI can learn to procure stocks from markets more efficiently and manage risks through the futures market.
• Role of APMC Acts: The State Agricultural produce marketing committee (APMC) Acts has created monopolies and distributional inefficiencies. They constitute a major roadblock in the way of creating a national market for agricultural commodities. Apart from breaking the monopoly and dissuading state governments from treating the APMCs as liberal sources of revenue, substantive efforts have to be made to create alternative trading platforms in the private sector where it is possible to reduce the layers of intermediation. Since this may take time, fruits and vegetables should be taken out of the purview of the APMC Acts immediately. A processor should be able to buy directly from farmers without having to pay any mandi fee/tax to the APMC.
• Role of public deficits: Fiscal deficit should be brought down by setting stringent time-bound targets under the Fiscal Responsibility and Budget Management (FRBM) Act.

Answer : The patent system is a social policy tool that aims to stimulate innovation. Internationally, patent protection is governed by the World Trade Organization (WTO) Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. TRIPS do not establish a uniform international law, but sets out minimum standards of patent protection that must be met by all WTO members.

• A successful patent policy of any developing country is one that strikes a clear balance between protecting the rights of innovators and services at affordable prices to the population. In a democratic country, like India, it is not easy to shift the policy against public interest. Earlier, India’s patent policy, in fact, protects the interest of public more than that of the monopoly rights. After the TRIPS, India was in the difficult situation of protecting people’s interest on the one hand and fulfilling the WTO’s agreement of TRIPS on the other hand.
• Now the social cost of granting patent would obviously entail in monopoly. As a result, there will be a rise in price, accompanied by lower supply of quantity. So in the short run, it is true that consumer welfare will fall. Hence short run costs will have an adverse impact on society.
• TRIPS implementation in India and other manufacturing countries will effectively cut the lifeline of affordable drugs unless safeguard measures are implemented to prevent this. One danger in compulsory licensing is that it will discourage further the commercial R & D necessary to new drugs to fight global epidemics.
• Criticizing, IPRs as monopoly power that would affect the growth and expansion of the health sector. However, the monopoly power in the short run would encourage more innovation and greater enthusiasm in research and development which would be beneficial in the long run. Patent is one of the IPRs which gives the inventor sole right to produce his property or license it to other producers. But misuse of this right is not desirable and it is not expected that patent holders would get into anti-competitive ways such as ever-greening of patents, patent pooling etc.
• But in the long run, intellectual property rights will result in more inventions, greater efficiency in production, better and useful allocation of scarce resources, and in turn the right spirit for competition towards invention and innovation. Be it a process patent or a product patent, it would help in efficient mechanism of production along with optimal utilization of scarce resources in the longer run. Though producer surplus increases under monopoly, consumer surplus is less under compared to perfect competition and there is a net deadweight loss in the former case. Moreover, we are usually more concerned about increase in consumer surplus than producer surplus as it is assumed that consumer surplus indicates better welfare situations.
• India has always been a treasure house of technically qualified people for the global research and knowledge driven manufacturing community. The post- TRIPS scenario further encouraged technical and legal professionals in various industries in India to incorporate IP/Patent practices in their knowledge up-gradation and work culture.
• Majority of the foreign pharmaceutical companies based in India spend much less than half of what an Indian company spend on R & D of the sector. India is a net exporter of pharmaceutical products, mainly generic versions with an export growth rate of around 4.5-5 percent and import growth rate of around 0.7 percent. So this sector needs proper regulation so that it can improve India’s balance of payment situation. Lastly, pharmaceutical sector needs to be a highly regulated sector not only in terms of price and quantity, but also in the way it functions. India being a 1.2 billion population country with a large chunk of people living below the poverty line, the Government should look into the abuse of patent rights and monopoly rights in this sector, because this sector is a vital priority sector.

Answer : The provision 2014-15 Union Budget to raise the Foreign Direct Investment (FDI) limit in the Defence Sector from 26% to 49% surely paves the way and expands the scope for further increasing the indigenous content in the defence hardware which India plans to procure in the coming years.

• Such a provision promises to woo the domestic private sector enterprises to come forth in a big way in not only partnering with global military firms, but also in establishing a strong manufacturing base in the country to produce state-of-the-art, high-end defence equipment. Many Indian private sector companies keen to make a foray into India's strategic sphere have already tied up with some of the leading international defence and aerospace firms to produce platforms and systems for the Indian armed forces.
• Amidst all the euphoria, however, it would be pertinent to note that an increased investment in Defence Research undertaken by India would be equally essential to realise self-reliance in defence design and production. The dynamics of indigenization would work well only when India also becomes a source of inventing and producing cutting-edge military technology of tomorrow rather than just relying on foreign firms to give access to their technology. Also important would be to nurture and retain the human resources talent pool within the country.
• A welcome step in this direction is the Defence Research and Development Organisation's (DRDO) plans to set up R&D centres in universities and leading academic institutions located in different parts of the country to create a strong defence knowledge base. The knowledge base available in various academic institutions and industrial sector could be used for polarising the defence research and also for designing, testing, and developing defence and related items.
• Similarly, the Transfer of Technology (ToT) clause as highlighted by India's official Defence Procurement Procedure (DPP) needs to be leveraged on so as to gain maximum benefit while clinching any new arms procurement deal with a foreign country/firm.
• To sum it up all, since its independence 67 years ago, India has charted a long, arduous path in giving a well-defined, dignified shape to its defence development and production sector. Starting almost from scratch and overcoming many challenges, today the country stands tall as one of the major Asian powers with an indigenous defence industry base.
• In fact, with a right spirit and energy, India certainly holds the potential to catalyse and transform itself into a vibrant hub of world-class design, development, manufacturing and export hub of high-end defence products in the next two to three decades.

Answer : (a) Operation 'Barga': The Left Front government in West Bengal which came to power in 1977 launched the famous Operation Barga with objective of a time bound registration of share croppers, so as to provide them legal right. It was a permanent occupancy and heritable rights with a crop division of 1:3 between land owner and share cropper.

(b) National Land Records Modernization Programme: NLRMP was launched in 2008-09, and comprises two sub-programmes. Computerization of land records, Strengthening of Revenue Administration and updating of land records. Major focus of the programme is on citizen services such as providing them computerised copies of record of rights with maps and other land related certificates.

(c) National Audit Mechanism in Government: This is ensured through Controller General of Accounts in the Ministry of Finance. C&AG have to prescribe the methodology of internal audit. It has to work both independent from finance and accounts. A Board of Internal Audit has to be created.

(f) Flow of Funds under C.S. Scheme: Earlier, government of India used to release Central Share of the funds directly to different agencies at sub-state level. This practice resulted into funds lying

Answer : Some of the anti-money laundering measures adopted in India.

• Promulgation of Prevention of Money laundering Act 2002 has been amended in 2005. Money laundering is confined to activities connected with proceeds of crime.
• Money laundering will be an offence only if it relates to any activity connected with the proceeds of the crime. There is a provision of attachment of property involved in money laundering.
• The Director or any officer authorized by him has the power of search and seizure under the act, but the order of attachment of any property, record will become final only after the guilt of the person is proved in the trial court.

Specific measures required for investigation

• Law should be amended to incorporate provisions regarding freezing of assets, funds, bank accounts, deposits, cash etc.
• If needed these provisions may be added in National Security Act, 1980, which is an effective legislation.
• A specialized unit may be created in the proposed NCTC, where experts from different ministries may be drawn up.
• Police has been found to be ineffective in investigation of such crimes; hence, dedicated teams may be formed for investigation of money laundering cases related to terrorism.
• Training and capacity building of investigative agencies may be ensured for successful investigation of money laundering cases.

Answer : Weakness in the budgetary process

• Unrealistic budget estimate: Amounts budgeted are not realistic, frequent revision and supplementaries.
• Delay in implementation of projects: Resources are being spread thinly, Cost overrun and time overrun
• Skewed expenditure Pattern: Major portion spent in last quarter of the financial year, especially in the last month. No Correlation between financial progress and physical progress parking of funds, ad hoc project announcement Emphasis on compliance of procedures rather than outcome.

Steps Taken by Government of India

• A modified exchequer control based expenditure management system was put in place in Dec, 2006 to control expenditure in the last quarter.
• It is a cash management system which emphasizes the time value of the money. Other steps which have been taken:
  • Reducing rush of expenditure during the last quarter reducing tendency of parking of funds
  • Monitoring the expenditure pattern

Answer : Main objectives of agricultural price policy: The main objectives of agricultural price policy are providing remunerative prices of farm products to farmers on the one hand and supply of cheap and affordable food grains and farm products to consumers. Agricultural price policy in India aims at both–growth of agriculture in terms of production and productivity as well as price stability of farm products.

Multiple goals: The Indian government has a system of MSP to provide a minimum remunerative price of farm products to farmers in case good harvest pushes down the market price to un-remunerative level. It is insurance to farmers against overproduction or glut which lead to severe decline in the price of farm products. This incentive along with higher procurement price leads to increase in production and productivity.

The government also procures food grains at procurement price for the Public Distribution System and maintaining buffer stock. The PDS provides cheap food grains to people through issue prices which are lower than the procurement prices by the amount of food subsidies. Buffer stock is maintained to maintain an uninterrupted food supply to people in case of poor harvest on the one hand and to maintain price stability in the market by sale and purchase of food grains.

Conflicting goals: Higher MSP and procurement price exert an upward pressure on the market price of food grains, which leads to food inflation.

• The cheap food grains provided by the PDS system are not targeted well and they are often of poor quality.
• In good harvest season, market price in surplus states remains lower than issue price, so off take of food grains from the PDS remains poor.
• MSP and procurement prices have not been able to develop a desirable cropping pattern in the country. Some of the crops are supported more than others. This leads to lack of incentives for crop diversification and optimum and desirable cropping pattern.
• In recent years MSP and procurement prices have not helped in price detection to farmers and they have often been criticized for being un-remunerative.

Answer : Food processing industry in India is increasingly seen as a potential source for driving the rural economy as it brings about synergy between the consumer, industry and agriculture.

• A well-developed food processing industry is expected to increase farm gate prices, reduce wastages, ensure value addition, promote crop diversification, generate employment opportunities as well as export earnings.

The bottlenecks are:

I.Inadequate Infrastructure Facilities

II.Absence of Comprehensive national level policy on food processing sector

III.Food Safety Laws & Inconsistency in State and Central policies

IV.Lack of adequate trained manpower

Remedial measures:

• To overcome the long and fragmented supply chain, contract farming can emerge as a significant opportunity for companies whereby they can create direct farm linkages to source appropriate quality, quantity and varieties of inputs.
• Dedicated freight corridors in rail supplemented by concretized dual carriageways for the State & National highways, will directly reduce the cost of goods supplied.
• The comprehensive policy will ensure private sector investment in infrastructure development, increased farm productivity and up gradation of quality and give further impetus to the food processing sector.
• The government should allocate separate budget for human resource development, for food processing sector, for enhancing and up gradation of the skills.

Answer : A modified exchequer control based expenditure management system was put in place in December 2006 to curb the rush of expenditure in the last quarter of the financial year.

• Under the new system, savings would not be available for automatic carry forward to the next quarter. The department/ministry concerned has to approach the ministry of finance for revalidation of such savings.
• Even in the case of demands of grants not covered by the modified exchequer management system, the expenditure in the last quarter of the financial year may not exceed 33 percent of the budget allocation.
• However, in spite of this cash management system, these targets have not been achieved in many cases. Thus it is seen that the rush of the expenditure in the last quarter of the financial year and especially in the month of March continues. While the modified cash management system introduced has shown some improvement, there is a need for new reforms in this sector.

Answer : The macroeconomic parameters of the Indian economy, especially fiscal deficit, inflation, current account deficit, etc. are similar to what they were in the crisis years of early 1990s. Yet there are remarkable differences between pre-and post-economic reform periods.

• New Economic Policy has put India on high growth path (average growth of 8-9 per cent), freed economy from the shackles of‚ Hindu growth rate’, it also contained fiscal deficit below five per cent by 2007 (which aggravated later due to stimulus package meant for weathering the effects of sub-prime crisis and eurozone crisis), forex reserves are comfortably close to $280 billion, exports registered a growth rate of 20-25 per cent on an average during the post reform period, per capita GDP increased at a sector savings remained negative or low, manufacturing sector growth was marked by huge fluctuations; project delays due to policy paralysis and poor implementation, lack of good governance and institutions, infrastructure deficit, inflexible labour laws are some of the major problems still persisting.
• Although poverty consistently declined, the country failed to create sufficient employment to remove unemployment. Thus the Indian economy has come a long way since it embraced NEP. Problems still persist, but they are of different nature. The government is making efforts to reverse declining rupee, contain inflation and resuscitate growth. The 12th plan is expected to address these problems.

Answer : Role played by Subsidies in Inclusive

• Growth: Inclusive and rapid growth is the main objective of the 12th Plan in just the same way as it was in the 11th Plan. India has been carrying on various welfare programmes as well as administered price mechanism to provide subsidies for inclusive growth. But in the recent years there has been lots of stirring on the issue of subsidies- their sustainability, efficacy, need and importance, alternatives of subsidies, etc.
• Extent of Subsidies: Subsidies have become an integral part of economic policy in India over the years for the reason that there is severe inequality, poverty and unemployment in the country. These have increased from 1.7 per cent of the total budget expenditure in 1970s to 11 per cent of the same in 2012-13. As per cent of GDP they have increased from less than 0.5 per cent to 2 per cent during the same period.
• Role which subsidies have played: Subsidies have also been used as a fiscal tool for giving incentives to agriculture and industrial sectors to raise production and productivity, to transfer income from the rich to the poor, to boost aggregate demand and consumption of essential commodities, including services to desirable levels. Subsidies have helped the farming and industrial sector to grow and the poor people have enjoyed state support for food and health.
• Why Subsidies need to be restructured and contained: Since subsidies are one of the major constituents of non-plan expenditure, a major cause of fiscal deficit, they have come under scanner. Reducing fiscal deficit would require reducing irrational subsidies. It is also argued that subsidies are poorly targeted; there are many loopholes in the system, corruption and discrimination. The high level of subsidies have not added too much to productivity and sustained employment. The subsidies need to be rationalized, reduced and resources thus saved could be better used for creation of critical infrastructure and helping SMEs to enhance production, productivity, create sustained employment and thus remove poverty by empowerment rather than giving free meals. It would also allow us for fiscal consolidation.
• Alternative Model: The alternative model needs to be heeded but those who are on the brink of starvation, malnourished and have ill health and those who are in destitution lacking even the minimum needs of life need state support in the short run. Rational subsidies or merit subsidies where social externalities are immensely high should be continued; populist and unproductive subsidies should be cut to alleviate infrastructure gap and create more opportunities for wealth creation. Only that would be a permanent answer to the woes of our economy.

Answer : PPP Model is a Collaborative Model: The public and private sectors together take up development projects on negotiated terms and conditions ranging from financial to technical and managerial collaboration. The models were basically an effort to fill the gap in development projects regarding capital and technology in particular and to unleash the private sector’s energy for development in general. The PPP model is inherently a good model to overcome the constraint of economic development. Nevertheless for developing countries PPP model is an experiment of a very nascent origin so it is replete with many problems.

Success Stories- PPP models have many success stories in developed countries in health, education and research and development, infrastructure, etc. such as the USA, UK, France and Germany. In BRICS countries also there are some great examples. In India too PPP model has constructed numerous state-of-the-art infrastructure projects, but they are still inferior in comparison to the output that developed nations have been achieving through the same model. The inherent curse of red tapism and power struggle between different agencies as well as between the private sector and government are looming threats for the prospects of the Indian PPP model. Add to this, the inevitable scenario of corruption and resultant artificial price hike of the resources that are gradually making PPP an unviable business model.

What went wrong: At a lower level PPP experiments took place successfully in the literacy growth in Kerala or in case of government aided private schools and colleges throughout the country. But, when the New Economic Policy started big infrastructural projects on PPP basis involving huge money, the ugly play of vested interest was observed generating pessimism. There are examples from road and transport sector to IT (2G and 3G scams), to power and coal sectors where the PPP model saw an ugly play of crony capitalism, namely favouritism, nepotism, absence of standard practices, failure of regulatory institutions, etc.

For example, in the case of the new Chennai airport, the tussle between Airports Authority of India (AAI) and the private consortium on controlling rights has become a case in point. All these failures do not point out towards inherently faulty PPP model but lack of regulatory institutions and standardised system for bidding, pricing, sharing of financial burden and profits, if any. The Vadodara-Halol Toll project suffered due to mistaken traffic projections, due to which proposed government incentives were stripped off from the project, thereby raising both policy and revenue risks for the involved parties. The Delhi-Gurgaon expressway was a victim of mammoth red tapism where the lack of coordination of more than 15 civic bodies whose approvals were necessary came out in the open in the shabbiest manner possible. In the same lines, the Karnataka Urban Water Supply Improvements project suffered due to continued lack of proper coordination among the three bodies associated with the project. The Delhi Airport Metro Express was shut down for 6 months when its operator Reliance Infrastructure pointed out cracks that had developed on its metro pillar structures.

Suggestions: The stalled/delayed/off-track PPP projects list is a long one and ever expanding. Most of the operators jumped on to the PPP bandwagon due to cheaper inputs like energy and fuel (which are under government control) but then, they later found the entire project financially unviable due to delays in land acquisition and other bureaucratic clearances–issues that have skyrocketed costs in various PPP projects to levels that have negated the advantage of all subsidized inputs. In developed economies and China numerous SPVs (Special Purpose Vehicles; Corporations set up to manage PPP projects) are efficiently bolstering the rapid growth and success of PPP projects. The Build-Operate-Transfer (BOT) model that the Delhi Metro has followed is one of the ways to ensure sustainable standards and quality over the long run in India. If we have to set our institutions and regulatory norms right, PPP model is sure to deliver. Transparency, accountability and commitment would go a long way in the success of PPP models.

Answer : Agricultural Price Policy in India aims at providing incentives to farmers to increase production and productivity on the one hand and insurance against falling prices in case of glut. The Agricultural Price Policy in the country also aims at provision of cheap food grains to consumers through food subsidies and maintaining a buffer stock. The following are the components of Agricultural Price Policy in India

1. Minimum Support Price
2. Procurement Price
3. Issue Price
4. Food Subsidy through the Public Distribution System
5. Buffer Stock Policy
6. Exemption of food grains from VAT Critical Evaluation

The Agricultural Price Policy in India has worked well to serve the interest of farmers and consumers both to a certain extent only. There are many things that need rethinking. The extent and targeting of food subsidy, decentralisation of PDS, the effect of support price on inflation and food prices and cropping pattern, benefit of support price being enjoyed by big farmers with bigger market surplus, limited procurement concentrated to some states and some crops, poor warehousing system, poor off take due to lower market prices than the issue price are some of the important issues which reflect the problems with the Agricultural Price Policy of India. These issues have come handy to the critics of Agricultural Price Policy.

Answer : Public Distribution system carries out the food subsidy scheme of the government through its about 5 lakh fair price shops in India. The concessional PDS system gave way to Targeted Public Distribution System in India in 1997. The main features of the policy included dividing the beneficiaries into two categories below poverty line and above poverty line. Higher subsidies were channeled to below poverty line people while close to market issue price was offered to above poverty line. Rural areas were given preference in allocating fair price shops.

• The centre, apart from allocating certain amount of subsidised food to states according to their below poverty line population also decentralised the PDS in the sense that states were allowed to provide more subsidised food to their population on their own cost beyond the amount offered by the centre. It was decided to provide 35 kg of food grains to each household in a month.
• Even after reforms PDS system in India is marred by problems of corruption, wrong identification of beneficiaries, quoting higher prices to ignorant beneficiaries on flimsy and fake reasons, channelising subsidised food to black markets, higher issue price than market price in good harvest states, distortion of market prices by support prices and increasing inequality by helping rich farmers. Closing down a purposeful system like PDS due to governance and implementation issues would not be a wise step. It needs to be better targetted, better designed, better implemented, better monitored rather than closing down. Closing down of PDS on these grounds would suggest many other welfare programmes which are not implemented well. India with a poverty ratio of 30 per cent can hardly afford to stop the PDS System.
• But the PDS and food subsidy policy needs to be rationalised. This would need cutting down of subsidies to the extent better targetting is possible through methods like direct cash transfers or otherwise. There is not a great case for universal food subsidy so long as a particular segment of the population is on the brink of starvation. Corrupt practices, leakages and channelising the foodgrains to black market need to be dealt with severely. The system needs to be perfected rather than closed if we want successful implementation of Food Security Act.
• Further, PDS could prove very useful in delivering other essential commodities for nutritional adequacy on the one hand and cheap essential drugs on the other. It is notable however, that food subsidy and the PDS should not be allowed to violate our budgetary constraints. If more funds are needed to run the PDS, a value judgment has to be made by economic policy makers in particular and society in general as how to mobilise funds for the same without jeopardizing the goals of fiscal consolidation. Therefore closing down the PDS is not a good option till people become productive enough to afford food on their own. That is what makes a welfare state.

Answer : Agriculture sector in India is today characterized by agricultural distress, namely, indebtedness, uneconomic farm gate prices, poor infrastructure, falling public expenditure, lack of institutional credit, falling income, increasing poverty and unemployment etc.

• The sector needs urgent steps to improve its plight. One of the answers to the problem lies in exploiting the potential of agro and food processing industries. Agro and food processing industries can prove to be complementary to agricultural sector in many ways-it can create non-farm employment and income in rural India, reduce disguised unemployment and increase the productivity of rural labour. It can improve rural-urban terms of trade it can provide economic opportunities to the agricultural laborers in slack season.
• The development of food processing industries would also absorb the additional production of several crops in good harvest years and prevent fall in their prices. Food processing industries may enhance exporting capability of this sector thereby earning foreign exchange for the country. All this may put pressure on the government to improve amenities like electricity, water, all weather roads, etc. In rural areas, such industries could lead to increase in the tax revenue of the government as well.

Answer : The plan to construct dedicated freight corridors across the country marks a strategic inflexion point in the history of Indian Railways that has essentially run mixed traffic across its network. Once completed, the dedicated freight corridors will enable Indian Railways to improve its customer orientation and meet market needs more effectively. Creation of rail infrastructure on such a scale - unprecedented in independent India – is also expected to drive the establishment of industrial corridors and logistic parks along its alignment.

Main Features of DFC:

• The Eastern DFC (1839 route kilometres [RKM]) extends from Dankuni near Kolkata to Ludhiana in Punjab, while the Western DFC (1499 RKM) extends from the Jawaharlal Nehru Port (JNPT) in Mumbai to Dadri /Rewari near Delhi.
• A special purpose vehicle, the Dedicated Freight Corridor Corporation of India Limited has been set up to implement the project.
• Out of 10,703 ha of land to be acquired for the project, 7,768 ha (73 per cent) has already been awarded under the Railways Amendment Act (RAA) 2008.
• The Eastern and Western DFC projects are being funded through a mix of bilateral/multilateral loans, gross budgetary support (GBS), and PPP.
• The Western DFC is being funded by the Japan International Cooperation Agency (JICA) up to 77 per cent of the total cost. Funding has been tied up and award of civil contract of 900 km is in process. The remaining portion of the project construction cost will be borne by the Ministry of Railways as equity funding.
• The Ludhiana to Mughalsarai section (1183 km) of the Eastern DFC is being funded by the World Bank up to 66 percent of the project cost. Funding for the first sector, viz. Khurja-Kanpur (343 km), has been tied up and award of civil contract is under way. Funding tie up with the World Bank for the remaining sectors is also in process.
• The Mughalsarai-Sonnagar sector (122 km) will be funded by Indian Railways' from its own resources. Civil construction work of this sector is in progress.
• The Dankuni-Sonnagar section (534 km) of the Eastern DFC will be implemented through PPP mode. Apart from the Eastern and Western DFCs, a feasibility study has also been undertaken on four future freight corridors, viz. East-West Corridor (Kolkata-Mumbai), North-South Corridor (Delhi-Chennai), East Coast Corridor (Kharagpur- Vijayawada) and Southern Corridor (Goa-Chennai). A prefeasibility study of the Chennai-Bangalore Freight Corridor is also being proposed. After commissioning of the Eastern and Western DFCs, it is planned to upgrade the speed of passenger trains to 160-200 kmph on the existing routes. A feasibility study for upgradation of speed of passenger trains to 160-200 kmph on the existing Delhi-Mumbai route has been undertaken with co-operation from the Government of Japan in 2012-13.

Answer : In view of several benefits of LPG such as its clean fuel nature, relieving people from reliance on firewood, thus conserving forests and convenient and smokeless means of cooking is in the order of things to promote the use of LPG through subsidies. Nevertheless, LPG subsidization in India has been a very sensitive issue in India.

• On the one hand LPG subsidization puts a lot of pressure on the government exchequer; on the other hand market price of LPG is generally unaffordable for common man. It is alleged, however, that subsidization of LPG is offering benefits to the creamy layer of citizens as they use more and more fuel since they can afford higher level of cooking and heating than the common man.
• Secondly, subsidization leads to lack of conservation. There is report of large scale misuse of the subsidized LPG by the rich segment of society to run cars. In view of this the government has reduced the number of subsidized liquefied petroleum gas (LPG) cylinders to households. It has also revised the prices of LPG.
• LPG prices have been increased to improve the recovery of Gas distributing companies, which are facing thousands of crores of under recovery on subsidized fuel. The government has not reduced subsidization or raised the price of LPG to reduce its consumption, but to make the same more rational. Rational pricing is one that leads to better recovery to the gas distribution companies and reasonable consumption on the part of consumers. In fact government’s policy is to increase LPG supply in immediate to medium terms.
• The 'Vision-2015' adopted for the LPG sector inter alia focuses on raising the LPG population coverage in rural areas and areas where LPG coverage is low. The Rajiv Gandhi Gramin LPG Vitaran Yojana (RGGLVY) for small-size LPG distribution agencies was launched in 2009. Under this scheme 75 per cent population is to be covered by 2015 by releasing 5.5 crore new LPG connections. But there are many snags in gas distribution. In order to check leakages, adulteration, and inefficiency resulting from the current system of delivery of subsidized products, the Government of India set up a task force for evolving a suitable mechanism for direct transfer of subsidies to individuals/families, who are entitled to subsidized kerosene, LPG, and fertilizers. It appears a win-win situation to raise the LPG prices. It helps improve the finances of LPG distributing companies and promote conservation of gas. It also introduces an indirect consumption tax on consumers consume more LPG cylinders pay more. Free meals increase pressure on the budget and defeat the goal of fiscal consolidation. So government’s decision is right to raise the gas prices. Higher recovery would give financial space for more exploration of gases and better supply infrastructure such as LPG pipelines etc.
• The New Exploration Licensing Policy (NELP) was adopted in 1999. India has an estimated sedimentary area of 3.14 million sq. Km, comprising 26 sedimentary basins. As on April 2012, about 737 MMT of oil equivalent hydrocarbon reserves have been added under the NELP. Raising LPG price is thus justified. The government appreciates the economic role of rational energy pricing. Rational energy prices provide the right signals to both the producers and consumers and lead to a demand-supply match, providing incentives for reducing consumption on the one hand and stimulating production on the other. Aligning domestic energy prices with the global prices, especially when large imports are involved, may be ideal option as misalignment could pose both micro and macroeconomic problems. At micro economic level, underpricing of energy to the consumer not only reduces the incentive for being energy efficient, it also creates fiscal imbalances. Leakages and inappropriate use may be the other implications. Underpricing to the producer reduces both his incentive and ability to invest in the sector and increases reliance on imports.

Answer : The Livestock sector achieved an average growth rate of 4.8 per cent during the Eleventh Five Year Plan. In 2011-12, the production of milk was estimated at 127.9 million tonnes, eggs at 66.45 billion numbers, wool at 44.73 million kg, and meat at 5.51 million tonnes. The Livestock Census (2007) placed total livestock population at 529.7 million and poultry birds at 648.8 million. The Livestock sector in India is, however facing many problems:

1. Unorganized economic activity.
2. Lack of finance and credit.
3. Lack of R&D and poor technological support.
4. Lack of phytosanitary and sanitary provisions.
5. Lack of diversification through processing.
6. Standardization and certification.

The sector needs support of R&D, credit and status of industry to grow. Skill formation, education and training of entrepreneurs in this field are very important. Processing, warehousing and marketing facilities of such products need to be improved. Adequate availability of feed and fodder for livestock is vital for increasing milk production and sustaining the ongoing genetic improvement programme. Green fodder shortage in the country is estimated at about 34 per cent. Last but not the least clinical support to livestock is also very important for preventive and curative care of the livestock.

Answer : Fiscal consolidation means reducing the gap between public revenue and Public expenditure. It implies increasing the tax GDP ratio by broadening and diversifying the tax base as well as plugging the loopholes to reduce leakages in the form of tax avoidance and tax evasion. On the expenditure side it implies cutting wasteful and unproductive expenditure such as major part of non-plan expenditure. India committed itself for fiscal consolidation by legislating Fiscal Responsibility and Budget Management Act in 2003, which aims at reducing fiscal deficit to zero, revenue deficit to 1.5 per cent of GDP and effective revenue deficit to zero. Also it aims at increasing the tax GDP ratio to 11 per cent.

Answer : Devaluation refers to administered exchange rate, i.e., a deliberate reduction in the exchange rate by the monetary authority of a country. Depreciation refers to fall in the exchange rate due to market forces, i.e., demand and supply of a currency against other currencies. In effect both the terms result in decreased price of exports and increased price of imports, helping thereby to reduce trade deficit. The policy of devaluation is adopted by the countries to rectify the current account deficit. It is an effective tool under certain assumptions. Devaluation helps only if there is no competitive devaluation by same product exporting countries and exports and imports are elastic in response to change in their relative price. Depreciation on the other hand is considered as an automatic mechanism for keeping current accounting equilibrium.

Answer : Fiscal cliff refers to efforts of the United States for fiscal consolidation. In the United States, the fiscal cliff was a simultaneous increase in tax rates and decrease of government spending through sequestration that would have occurred during January 2013 through a series of previously enacted laws. The deficit—the amount by which government spending exceeds its revenue—was projected to be reduced by roughly half in 2013. The Congressional Budget Office (CBO) had estimated that the fiscal cliff would have likely led to a mild recession with higher unemployment in 2013, followed by strengthening in the labour market with increased economic growth. The previously enacted laws leading to the fiscal cliff had been projected to result in a 19.63% increase in revenue and 0.25% reduction in spending from fiscal years 2012 to 2013. Those laws included the expiration of the 2010 Tax Relief Act and planned spending cuts under the Budget Control Act of 2011.

Answer : India embraced the new series of Consumer Price Index since 2011 with the base year 2010.There are three Consumer Price Indices in the new series- Rural Consumer Price Index, Urban Consumer Price Index and National Consumer Price Index. Besides change in the base year, these consumer price indices have also changed the consumer baskets to reflect current changes as well as weightage patterns of the same. India would gradually phase out all earlier Consumer Price indices, namely, CPI-AL, CPIIW and CPI-UNME. The new system of CPI would enable India in future to make this new CPI series as the main reference indicator of inflation in place of WPI, as it is prevalent in other parts of the world.

Answer : (a) Optimum exchange rate: Optimum Exchange rate refers to exchange rate of a country which is beneficial for both – exporters and importers. It promotes trade as well as accumulation of foreign exchange reserves. It also attracts investors. This is close to what is called real effective exchange rate.

(b) Countervailing Duty: Countervailing duty is imposed to check dumping by foreign countries.

(c) Financial Contagion: Financial contagion refers to spread of financial crisis from one part of the world to other parts through channels of trade, investment and capital inflows and outflows. Global integration is one of the reasons for the same.

(d) European Financial Stability Mechanism: This is a mechanism to counter the effects of Sovereign debt crisis of the Euro zone wherein a fund has been allocated by contribution from Euro Zone countries and mobilisation from market to help the crisis hit countries.

(e) Green Accounting: Green accounting is national accounting from sustainable development point of view by making an adjustment for depletion of natural resources and pollution etc.

Answer : The Indian economy is facing severe imbalances on trade account and current account which have put unprecedented pressure on the balance of payments accounts. The trade account deficit of India stands in the range of 7-8 per cent of GDP whereas current account deficit stands at 4-5 per cent of GDP, which are very high from any reckoning for a developing country.

• Multiple effects of imbalances: Both the deficits put huge pressure on forex reserves, domestic currency and lead to fluctuations in the exchange rate. Trade imbalance needs to be covered by official reserves, failing which there is no option but to borrow from international financial market. Trade deficit leads to increased demand for foreign currency, thereby leading to an appreciation in the exchange rate of the foreign currency. However, every penny of foreign currency generates supply of an equal amount of domestic currency, which leads to depreciation in the exchange rate of the domestic currency. If sterilization is not resorted to, this leads to upward pressure on inflation in the domestic economy. The cycle is self-feeding and self-perpetuating if timely and decisive measures are not taken.
• Recent experiences of India: India is a classic example of the above mentioned phenomena. High trade and current account deficits are observed. Forex reserves have started getting depleted, there is increase in demand for dollar, supply of Indian rupee has also increased, and inflation has soared high. Rupee depreciated to as low as 65 per dollar.
• Short term measures and adverse effects: Import control (gold, luxury goods and POL), measures for increased inflow of foreign capital and in extreme situations borrowing from financial markets are resorted to. India in the past has experimented with these measures. All these measures help only in the short run and they have other adverse effects. Import restriction, for example, is a contractionary measure. Borrowing from international financial market leads to high debt servicing. Foreign investment can also be debt creating or non-debt creating- both of these depend on several factors, but one thing is sure that if macroeconomic situation of an economy is not good, they dry up- India’s present case is a classic example.
• Effective Measure: It is, therefore, necessary that a country pays for its imports by export earnings. In the long run this is the most effective way because it has negligible or manageable adverse effects.

Answer : Dimensions of Inclusive growth: Inclusive growth has several dimensions- poverty alleviation, removal of unemployment, removal of inter personal and inter regional inequality, increasing living standard and human development, provision of basic minimum needs such as adequate nutrition, food security, primary and secondary education, primary and preventive health care etc. Improvement in the situation of the SCs, STs, minorities, women and children

India’s achievements: Poverty and unemployment have gone down since India began evaluation. NSSO data clearly show that in the post economic reform year’s poverty and unemployment (chronic) have gone down to 28 per cent and 2 per cent respectively with a few exception years. India’s record in inequality with an income Gini coefficient in the range of 36 per cent is better than other developing or developed economies that have Gini coefficients in the range of 40-55 per cent. India is also carrying on many welfare programmes for alleviation of poverty and unemployment, for primary education and health care, for the provision of housing, electricity gas and water etc.

Areas of concern and constraints: The incidence of poverty and unemployment is higher among SCs, STs, women and minorities. There are huge income and consumption gaps between rural and urban areas. The basic minimum needs of life are not available to a big population. CDS unemployment is still high at 6-7 per cent and the quality of employment is poor in terms of productivity and income as the post economic reforms years have seen increase in informalisation and casualisation of employment. India’s human development has fallen in the international ranking. Education and health facilities are not only limited but poor in quality as well.

Major constraints: Include lack of finances, leakages in the programmes, overlaps and multiplicity of welfare programmes, poor targeting, poor implementation and governance. Development of infrastructure and creation of productivity employment opportunities are important to achieve inclusive growth along with improvement in implementation of the welfare programmes.

Answer : Positive role of foreign investment in economic development: Removing the gap in supply and demand of capital, bringing in better technology and management, making international brands and opening up access to international market chains, increasing production, productivity and exports, generating employment, research and development. It also helps to rectify trade imbalances.

Adverse effects and apprehensions of foreign investment: Dominance of TNCs and MNCs, monopolistic tendencies, de-industrialization, influence on economic policy, over-exploitation of abundant natural resources and cheap labour, earning arbitrary profit and royalty and expatriating capital, not paying heed to national priorities and guided by profit motive only, indifferent towards social security and welfare, less care on environment and sustainable development.

Evaluation of the effects of 51 per cent foreign investment in multi brand retail: It will improve retail marketing by bringing in capital, modern technology and marketing solutions make available multiple varieties of goods to consumers at cheaper prices. It will also improve back end infrastructure, remove intermediaries, provide better farm gate price to farmers etc and promote SSIs and cottage industries by procuring commodities from them, generate employment.

Apprehensions: Render millions of local retailer’s unemployment, increase supply of cheap foreign goods which would lead to closure of many indigenous industries, promote consumerism, increased supply of processed food and substitute fresh products etc. Government has put stringent criteria to counterbalance the adverse effects.

Answer : Recent developments in the robotics world have made robots more user-friendly, intelligent, and most importantly affordable. The economic impacts of using robots in manufacturing and non-manufacturing companies are:

On Productivity:

• Robots produce more accurate and high quality work
• Robots rarely make mistakes and are more precise than human workers
• They can produce a greater quantity in a short amount of time
• They can work at a constant speed with no breaks, days off, or holiday time
• They can perform applications with more repeatability than humans

On Safety:

• Robots save workers from performing dangerous tasks
• They can work in hazardous conditions, such as poor lighting, toxic chemicals, or tight spaces
• They are capable of lifting heavy loads without injury or tiring
• Robots increase worker safety by preventing accidents since humans are not performing risky jobs

On Savings:

• Robots save time by being able to produce a greater magnitude of products
• They also reduce the amount of wasted material used due to their accuracy
• Robots save companies money in the long run with quick ROIs (return on investment), fewer worker injuries (reducing or eliminating worker’s compensation), and with using less materials.

Answer : Lost years: The post economic reforms years are known as lost years because increase in GDP has taken place more because of increase in productivity due to new technology rather than more employment and labour absorption. Falling employment elasticity- Employment elasticity has declined in most of the sectors including the major sectors such as agriculture and manufacturing except construction sector and financial services.

Falling quality of employment: Employment has increased more in the informal sector/ unorganised sector (more than 90 per cent of the total employment) and increased only marginally in the organized sector. This means poor wages, poor social security and no certainty in employment.

Modes of employment have changed

• More employment in the informal and unorganized sector.
• Casualization and contractualization of employment have increased.
• Self-employment has increased in the reforms years but there are several limitations.
• More employment in the services and construction sectors, less in the conventional sectors such as agriculture and manufacturing.
• Usual status employment has increased. While CWS employment growth has remained constant, CDS unemployment has recorded decline.
• Higher salaries for a few managerial staff and lower salaries to other components of labour.

Answer : Major thrust areas for employment in the 12th Five Year Plan-

• The cornerstone of the manufacturing policy for the Twelfth Plan is to create 10 million additional jobs in the manufacturing sector by focusing on labor-intensive manufacturing and by suitable amendments to the labor regulatory framework, so that manufacturing becomes a genuine engine of employment growth in the country.
• If we focus on more productive and quality (organised and self-employed) employment in the manufacturing and services sector, additional 50 million job opportunities can be created in the non-farm sector. But this will need a huge effort in the form of skill development aligned to the market needs.
• In particular, manufacturing, construction, trade, transport, hospitality and financial services are the promising sectors where skill development can lead to a faster growth in employment opportunities.
• As more skilled people come back to the labor force after completing their education and training to join the work force, those under-employed in agriculture will be drawn out to fill the job opportunities created by the non-farm sector.
• This could, in the planned scenario, bring down the projected share of employment in farm sector to about 45 per cent of the total.
• The Twelfth Plan should focus on demand aligned skill development, and aim at significantly stepping up growth in employment in manufacturing, so that under-employed labour force can speedily move from low-paid farm jobs to better-paid and more productive manufacturing and services sectors.
• Simultaneously, we should improve the working conditions for women to improve their work participation rates, and focus on greater organised sector jobs that will meet the aspirations of the rising number of educated and skilled youth in the country.

Answer : The preface of the NMP refers to ‘concern about the stagnant and low share of the manufacturing sector in India’s GDP’ as providing prima facie justification for policy intervention. In the body of the policy, this goal is further justified by reference to the superior manufacturing performance of other Asian countries, and by the employment challenges that India faces. This is a rather dubious basis for intervention.

On this rationale, the quantitative target is to raise the share of manufacturing value-added in GDP from the current 16 per cent to 25 per cent by 2022, implying that manufacturing needs to grow appreciably faster than overall GDP over the next decade. This will become progressively harder as the share of manufacturing rises in overall GDP. Given the shares of agriculture, services and industry (of which manufacturing is the dominant part) must add up to 100 per cent, it is also not clear from the policy which of the other two sectors is expected to give way within an aggregate growth target of nine per cent. This information will only become available when India’s 12th Five-Year Plan is finalised early next year; presumably, much of the ‘space’ will be ceded by agriculture.

The main positive instrument proposed to achieve this growth acceleration is the creation of national investment and manufacturing zones (NIMZs), to be developed as integrated industrial townships. The policy envisages that ‘the NIMZs would be large areas of developed land, with the requisite ecosystem for promoting world-class manufacturing activity’. In contrast to existing special economic zones, with their focus on exports, such NIMZs are envisaged as industrial townships of a minimum size of 5000 hectares.

NMP seeks to achieve the following broad objectives:

• Increase the share of manufacturing in Gross Domestic Product (‘GDP’) to 25 percent by 2022
• Create 100 million additional jobs by 2022
• Creation of appropriate skill sets among the rural migrant and urban poor to make
• Increase domestic value addition and technological depth in manufacturing
• Enhance global competitiveness of Indian manufacturing through appropriate policy support
• Ensure sustainability of growth, particularly with regard to the environment including energy efficiency, optimal utilization of natural resources and restoration of damaged /degraded ecosystems

Answer : Given that improving the efficiency of agricultural production is a key to pro-poor economic growth, improvements in agricultural technology are the principal means of doing this. Agricultural technology can affect smallholder income, labour opportunities for the poor, food prices, environmental sustainability, and linkages with the rest of the rural economy:

• Agricultural technology has been a primary factor contributing to increases in farm productivity in developing countries over the past half-century. Although there is still widespread food insecurity, the situation without current technology development would have been unimaginable.
• New technology can provide additional rural employment, but there are always countervailing pressures to reduce labour input and lower its costs.
• Food prices are demonstrably lower because of technology, but the distribution of benefits between consumers and producers depends on the nature of the local economy and trade patterns.
• The adoption of technology requires adequate incentives for producers. Investments in labour or cash will not be made unless there are adequate returns. One of the most important supporting factors is the adequacy of markets for outputs and inputs.

Answer : Money Laundering is the process of concealing illicit sources of money to make it appear like legitimately earned money.

• SEBI is in the process of finalising new anti-money laundering guidelines covering entities such as brokers and mutual funds to put in place stronger checks against possible clearing of funds through capital market. The existing mechanism which is in existence for the last 10 years will come to an end.
• While SEBI is of the view that a strong defence mechanism already exists in the Indian Capital market, regulatory system against any possible money laundering or terrorism finances activities become necessary.
• Certain changes and additional safeguards might be necessary to tackle the new challenges that are emerging on the Indian horizon.

Answer : A well-targeted and properly functioning Public Distribution System (PDS) is an important constituent of our food security. The Targeted Public Distribution System (TPDS) with its focus on "poor in all areas" envisages issue of food grains for the population Below Poverty Line (BPL) at specially subsidized prices. Under TPDS, the States are required to formulate and implement foolproof arrangements for identification of poor, for delivery of food grains to Fair Price Shops (FPSs) and for its distribution in a transparent and accountable manner at the FPS level.

The thrust is to include only the really poor and vulnerable sections of society. The allocation of food grains to the States is made on the basis of average annual off take of the States in the past 10 years. The quantity of food grains out of this average off take which is in excess of the requirement of BPL population for the benefit of the population Above Poverty Line (APL).

The performances of TPDS are:

• The implementation of TPDS is plagued by targeting errors, prevalence of ghost cards and unidentified households
• Though the off-take per household has shown some improvement under TPDS, yet only about 57% of the BPL households are covered by it
• The FPSs are generally not viable because of low annual turnover and they remain in business through leakages and diversions of subsidized grains
• Leakages and diversions of subsidized grains are large and only about 42% of subsidized grains issued from the Central Pool reaches the target group
• Over 36% of the budgetary subsidies on food is siphoned off the supply chain and another 21% reaches the APL households
• The cost of income transfer to the poor through PDS is much higher than that through other modes.
• The performance of TPDS can be considerably improved if some measures are taken to streamline the BPL identification survey and if the delivery system is made effective, efficient and transparent.

Answer : The importance of building up buffer stocks to stabilise the food economy has long been recognised.

• A buffer stock is necessary not only to meet marked falls in production resulting from bad years, but also to impart inter-seasonal stability to the price level. A buffer stock of adequate size has, therefore, to be a central feature of food policy during the Five year Plan.
• The effectiveness of the government operation in the food-grains market depends to a large extent on the size of stocks. The size of stocks is determined by two considerations. One is to meet the current needs, i.e. to hold a quantity of stocks adequate to maintain the supply line throughout the year; the other aspect is to have some stock which would enable the Government to maintain the supply line even in a year of crop failure.
• The first consideration helps to even out seasonal fluctuations in supply; the second helps to even out annual fluctuations in supply; the former may be described as normal stocks the latter buffer stocks. Maintaining buffer stocks so as to take care of natural calamities resulting in temporary shortage of food, and to act as a countervailing mechanism against traders and businessmen who try to push up prices, especially during period of shortages of food. Storage for buffer stocks is equally important.

Answer : For the last three years India is grappling with the problem of inflation. The problem was further aggravated by the global financial crisis and global recession. The Indian economy was able to weather the effects of subprime crisis, but it was badly affected by the Euro zone crisis through trade and investment channels. Its growth rate declined to half the trend rate and in many sectors employment also declined. The fiscal policy and monetary policy were tailored to contain inflation, but it had negative effects on growth. When growth is not accelerated, inflationary pressure is not absorbed. This is why some of the experts feel that now the main problem is not inflation but economic growth.

• Slide in economic growth: In the last decade the GDP growth averaged 9 per cent till 2007 when the subprime crisis gave a jolt. But India carried out a stimulus programme which helped it to weather the crisis and maintain its high growth rate. Again 2009- 10 euro zone crisis affected India’s trade and inflow of foreign investment. But India could not decouple this time. Growth rate declined to all time low in 2012 to 5 per cent.
• Mounting inflation: Falling growth was accompanied by mounting inflation mainly caused by supply bottlenecks and changing consumer behavior and tastes. It was aggravated by rising commodity prices in the international markets.
• Monetary and fiscal policy measures: India adopted conservative monetary and fiscal policies to counter inflation. Stimulus package was withdrawn to meet FRBM targets. Too much conservative monetary and fiscal policies killed expectations in the economy and the business environment became gloomy. Inflation kept in double digits or high single digit.
  • It is fair to suggest that growth has great capacity to absorb inflation in an economy like India which has not reached full employment. Supply side bottlenecks could have been partly offset by growth. Business environment might have improved with an expansionary signal from monetary and fiscal sides.
  • India, however, decided in favour of conservative policies, which although failed to curtail inflation, led to decline in growth. High rate of interest led to fall in investment and capital formation. Cut in public expenditure has its own effect on the aggregate demand and economic growth and development. When there was no external demand, domestic demand might have sustained higher growth. India’s fiscal and monetary policies failed to appreciate this.

Answer : Rural infrastructure is crucial for agriculture, agro-industries and overall economic development of rural areas. It also, incidentally, provides basic amenities that improve the quality of life.

Rural infrastructure plays a key role in reaching the large mass of rural poor. When rural infrastructure has deteriorated or is nonexistent, the cost of marketing farm produce can be prohibitive for poor farmers. Poor rural infrastructure also limits the ability of traders to travel to and communicate with remote farming areas, limiting market access from these areas and eliminating competition for their produce. Construction of rural roads almost inevitably leads to increases in agricultural production and productivity by bringing in new land into cultivation or by intensifying existing land use to take advantage of expanded market opportunities. In addition to facilitating agricultural commercialization and diversification, rural infrastructure, particularly roads, consolidates the links between agricultural and nonagricultural activities within rural areas and between rural and urban areas

The projects undertaken under the programme suffer from numerous defects including especially sub-critical investment levels; unviable projects; lack of technological and institutional capabilities in designing and executing projects utilising local resources and expertise; illiterate and unskilled beneficiaries with no experience in managing an enterprise; indifferent delivery of credit by banks (high transaction cost, complex procedure, corruption, one-time credit, poor recovery); overcrowding of lending in certain projects such as dairy; poor targeting and selection of non-poor; absence of linkage between different components of the IRDP; rising indebtedness.

Steps taken for improvement are:

• Rural Infrastructure Development Fund was set up within NABARD as a lending facility for State Governments aimed at financing ongoing rural projects in the area of basic infrastructure like agriculture, production, transport, marketing and other allied activities.
• The implementation of the sanctioned projects is subject to close monitoring. For this process, a high power committee at the state level chaired by the Chief Secretary or Agricultural Production Commissioner is constituted. The Committee ensures proper coordination between the implementing agencies and departments of the State Government so that projects are expeditiously implemented. The progress of implementation is also assessed by NABARD through regular field visits and desk monitoring through a specifically designed MIS.
• Periodic discussions are held with officials at various levels to sort out the operational issues.
• Private initiative was encouraged in creating infrastructure. In the context of overall infrastructure-poverty reduction-governance nexus, small-scale community based infrastructure has been improved to bring development at the door step.

Answer : The NHDP is implemented by the National Highways Authority of India (NHAI). Phase I & II of NHDP envisaged 4/6 laning of about 14,330 kilometres of national highways, at a total estimated cost of Rs. 65,000 crore (at 2004 prices). These two phases consist of the Golden Quadrilateral (GQ), the North-South & East-West corridors, Port Connectivity and Other Projects GQ connects Delhi, Mumbai, Chennai and Kolkata. The North-South and East-West Corridors connects Srinagar in the North to Kanyakumari in the South and Silchar in the East to Porbandar in the West. Under the Port Connectivity Project, roads connecting 12 major ports will be improved.

There have been some delays in implementation of the projects mainly due to poor performance of some contractors, delays in obtaining forest/wild life/ railway clearances, law & order problems in some states, delay in land acquisition.

The Government of India has taken several initiatives to expedite highway projects under the National Highway Development Project (NHDP). These are –

1. NHAI Board has approved formation of a High Level Expert Settlement Advisory Committee for one time settlement of old cases pending in court.
2. A new model of Engineering Procurement and Construction (EPC) contracts is being brought in. Highways which are not viable to be constructed under the BOT (toll) mode will be taken up under the new EPC mode. Under this modified turnkey EPC note, the Government will provide 100% funding.
3. The Government has also decided to introduce passive Radio Frequency Identification (RFID) for electronic toll collection at the toll boards. This will remove bottlenecks at the toll booths and ensure seamless movement of traffic.
4. NHAI has taken up award of select highway projects to the private sector under an Operate, Maintain, and Transfer (OMT) concession. Till recently the tasks of toll collection and highway maintenance were entrusted to tolling agents and sub-contractors respectively.
5. Under directive from NHAI most states have constituted high level committees under their Chief Secretaries for monitoring pre construction activities of NHAI projects. The NHAI regional officer is the Member Secretary.
6. Substantial financial powers have been delegated to the regional officers of NHAI for facilitating speedy processing and approvals for acquisition of land.

Answer : Recent evidence suggests that tax havens tend to have stronger governance institutions than comparable non-haven countries. Most importantly, tax havens provide opportunities for tax planning by multinational corporations.

• It is often argued that tax havens erode the tax base of high-tax countries by attracting such corporate activity. However, while tax havens host a disproportionate fraction of the world's foreign direct investment (FDI), their existence need not make high-tax countries worse off.
• It is possible that, under certain conditions, the existence of tax havens can enhance efficiency and even mitigate tax competition. Indeed, corporate tax revenues in major capital-exporting countries have exhibited robust growth, despite substantial FDI flows to tax havens.

Answer : The horticulture sector encompasses a wide range of crops e.g., fruit crops, vegetable crops, potato and tuber crops, ornamental crops, medicinal and aromatic crops, spices and plantation crops.

Important initiatives for horticulture development:

1. National Horticulture Mission was launched during the year 2005-06 with objective of providing holistic growth to the horticulture sector through an area based, regionally differentiated strategy, supply of quality planting material, production and productivity improvement, technology promotion, extension, post-harvest management and marketing.
2. The National Bamboo Mission was launched in 2006-07 as a Centrally Sponsored Scheme to promote the growth of bamboo sector.
3. Micro Irrigation Scheme launched to increase the coverage of area under improved methods of irrigation in the country for better water use efficiency and to provide stimulus to growth in the agriculture sector.
4. Horticulture Mission for North East and Himalayan States was launched to achieve overall development of horticulture in 8 States to harness the potential that exists in the North East region.

Answer : Air Transport industry of India is facing a number of problems such as:

1. Air India is facing stiff competition from the private players in terms of facilities and fare structure.
2. Suffer from mismanagement like frequent strike by pilots.
3. Political interference
4. Employee shortage
5. Lack of airports for regional connectivity
6. Increasing fuel prices
7. Airport and air traffic control (ATC) infrastructure is inadequate to support growth.
8. Increasing manpower costs due to shortage of technical personnel.

The primary step would be to enlarge and upgrade airports and allied infrastructural facilities to meet the growing traffic. For these private players should be welcomed as in Greenfield airport of Hyderabad.

The recent fraud pilots’ cases have minimized the credibility of airlines. Government should take strict action against the culprits and proper regulations should be made to curb this practice in future.

There is a need to make joint efforts towards the growth of aviation industry rather than indulging in unhealthy competition and price wars. The Government should also implement strong measures to reduce taxes and improve infrastructure.

Answer : The Dharmadhikari Committee is understood to have made several recommendations on critical issues like career progression, integration across various cadres, rationalisation of their pay scale, allowances and incentives and overall restructuring of the entire staff of the erstwhile Indian Airlines and Air India.

• The Committee tried to bring the wage structure of the merged organisation strictly under legal parameters, so that it conformed with the guidelines of the Department of Public Enterprises, which caters to other public sector undertakings.

Answer : Bioinformatics is the collection, organization and analysis of large number of biological data using networks of computers and databases. It refers to the convergence of IT and biotechnology.

• It is used in the following fields: Molecular medicine, personalized medicine, Preventive medicine, Gene therapy, Waste cleanup, Climate change studies, etc.
• India has evolved a National Bioinformatics Network for sustainable utilization of biological data available through online and offline methods.
• Helps store massive quantities of repetitive and non-repetitive information thus helps in storing wide range of traditional knowledge.

Answer : The Director is selected based on the CVC Act 2003, and has a two-year term. As such, it is necessary that the director, CBI, should be vested with ex-officio powers of the Secretary to the Government of India, reporting directly to the Minister, without having to go through the DoPT.

• The Central Government may extend to any area, besides Union Territories, the powers and jurisdiction of members of the CBI for investigation subject to the consent of the Government of the concerned State Govt.
• While exercising such powers, members of the CBI of or above the rank of Sub Inspector shall be deemed to be officer’s in charge of Police Stations of respective jurisdictions. The CBI can investigate only such of the offences as are notified by the Central Government under the DSPE Act.

Answer : Almost all the major components of the external debt recorded a rise during the year except bilateral, IMF, exports credits and rupee debt.

• External debt on account of commercial borrowings increased by US$ 16.1 billion during 2012-13 as compared with US$ 16.3 billion in 2011-12. Trade credit components of external debt (both long-term and short-term) showed an increase of US$ 20.3 billion as at end-March 2013 over end-March 2012.
• The short-term debt increased by US$ 18.5 billion to US$ 96.7 billion as at end-March 2013 from US$ 78.2 billion as at end-March 2012 mainly on account of rise in short-term trade credit.
• NRI deposits increased by US$ 12.2 billion to US$ 70.8 billion as at end-March 2013 over the level as at end-March 2012 primarily on account of increase in rupee denominated NRI deposits reflecting the impact of deregulation of interest rates on these deposits in December 2011.
• The loans under external assistance (multilateral and bilateral debt) declined by around US $ 0.6 billion during 2012-13 as compared with an increase of US$ 3.2 billion in the preceding year.

Answer : Contracting has however, led to higher farm incomes and more employment for labour. There seems to be an inherent contradiction in the objectives of the contracting parties and those of the local economy.

• It is found that agribusiness firms deal with relatively large producers and their contracts, which are biased against the farmer, perpetuate the existing problems of the farm sector such as high chemical input intensity, and social differentiation.

Answer : Immediately after independence, various States took several initiatives to abolish Zamindari, and Intermediaries in their states. By 1949, Zamindari Abolition Bill or Land Tenure legislations were introduced in many provinces like UP, M.P. Bihar, Assam and Bombay.

• Many Intermediaries moved to various courts against the laws passed by provincial legislatures. GOI responded by passing 1st amendment in 1951 and 4th amendment in 1955 strengthening the hands of State legislatures for abolition of zamindari.
• The after effect of zamindari abolition was that 20 million erstwhile tenants now became landowners. There were some weaknesses in zamindari abolition like in U.P, provincial government permitted to retain lands that were declared to be under their personal cultivation. This resulted into the phenomena of large number of absolute landlords.
• Despite the resistance from zamindars the process of zamindari abolition was completed except in certain pockets of Bihar.

Answer : The growth in energy use has serious environmental implications. Apart from depleting energy resources it can cause environmental damage, such as GHG emissions, air pollution, and acid rain, loss of biodiversity and discharges of waste. Other environmental concerns include water pollution and the disposal of waste, particularly nuclear waste.

• An effective way to maximize long-term environmental sustainability is to promote more eco-efficient growth i.e. to boost the energy efficiency by use of new technologies. This would not only protect the environment and reduce emissions of greenhouse gases, it would also produce significant financial savings.
• India is now aiming to make much greater use of renewable energy sources—including biomass, hydropower, wind, solar, geothermal and biofuels. All are key elements of sustainable and low-carbon development, but more importantly offer affordable and clean energy services to the rural poor. In rural areas, different forms of renewable technology have been use to generate “off-grid” electricity.
• GOI could take measures to provide infrastructural support and make payments per poor household served. These subsidies could correspond to the benefits already allocated to urban households who gain from tax credits and subsidies on conventional grid connected energy supplies.
• Governments could also work with the private sector to provide capital, entrepreneurship and linkages to modern technology providers through public-private partnerships.

Answer : Factors responsible for development of IT industry

• 1960s and 1970s – Indigenization and self-sufficiency in computers and electronics largely by national, security related issues – conflict with China and Pakistan. Creation of Electronic committee.
• Formulation of the national vision for promoting the software industry in India by government in 1980s.
• 1990s liberalization of economy, development of software technology parks, 2000s formation of ministry of information technology.
• Advantages of cost competitiveness and huge manpower with proficiency in English language.
• Emergence of offshore outsourcing. Exp. USA and Europe.
• Emergence of strong domestic markets- due to high economic growth and development. 4th largest IT market in Asia-Pacific.
• Emergence of large IT companies – Infosys, TCS, Wipro etc.

Answer : Urgency of Port-led development in India: Globalization of world cities has assigned an important role to coastal cities to play in national development. Coastal cities are being seen as engines of growth. India is bound by sea on three sides and has a 7516.6 km coastline, making it the largest in the world. Therefore it is only natural that Indian ports handle 90% of the export-import trade volume. The railways contribute 9% of the GDP , the road sector contributes 6% whereas the port shares of GDP is only 1%. It is in this backdrop that the government has prioritized the development of coastal cities and ports.

Example: Chinese coastal cities port led development can be cited

Significance of Sagarmala: Port-led-development is envisaged through Sagarmala (Garland along the Ocean) Project, it is only possible if we convert our ports to "Smart Ports". And this applies most importantly to major ports (government owned) as they are the 'big beads' of this 'mala'. The only advantage in defining a "smart" port today is that a longer futuristic vision is possible.

Problems of Indian Port

• Major ports (all of them Government owned) are still driven by legacy issues;
• They have not kept pace either with the requirements of emerging technology, on-shore or off-shore or with the requirements of international trade, and;
• The emerging trends in containerisation, size of ships and flexible rules needed in a modern global world.
• India suffers from poor port linkages, underperformance of existing port infrastructure and lack of developed infrastructure near port, for value addition of inbound or outbound merchandise.
• It is also true that these legacies need to be demolished as they have lost their relevance now. All current trade is governed by maritime conventions of the International Maritime Organisation, mutually respected and agreed treaties etc. All that matters today is competitiveness.

Reforms in the Port Sector: Under a firm and progressive Government today, there is requirement to re-invent ports, and completely overhaul and. rewrite the maritime sector. Reform of the port sector is a necessary condition, but not sufficient. Here, we confine ourselves to the concept of "port-led- development". Following framework can be adopted for a smart port:

• Change the governance structure
• Lack of flexibility and delegation of authority
• Partners for competitiveness
• Transparency in rates

Role of private sector: These are structures of a framework of a 'smart port, which will have to be diligently created, accommodating the special needs of the individual ports, to effectively deliver the final product, a model of port-led development, Sagarmala.

Answer : Agrarian movements in contemporary India may be broadly classified into two main categories. The first type of movements is those of the poor, the marginal or small peasants. These movements voice the demands related to their economic condition, for example, demand of the agricultural labourers for higher wages and better working condition. The second type of movements is of the more prosperous peasants, those who produce a considerable surplus within the rural economy. These movements are often in social science literature referred to as ‘Farmers’ Movement’ or ‘New Agrarianism’ or ‘New Peasant Movements’.

• In the initial years the sporadic movements were directed against the extraction of the Zamindars and other forms of intermediaries. These movements were and are around the grievances of the rural poor and in the pre independence years they developed in close connection with the national movement.
• The second category of movement has arisen in recent years in the Green revolution areas such as in western Uttar Pradesh, Haryana, Punjab or south- western Maharashtra or in the far south such as Karnataka or Tamil Nadu and it is the rich and the middle peasants, the prosperous within the rural economy that organise and lead it. These movements have become much more prominent in recent years. The movements target the state, the bureaucratic apparatus and demand among other things concessions from the state like, rise in the remunerative prices for crops, decrease in the prices of agricultural inputs, providing electricity at a cheap rate etc. By focusing on the decline in the terms of trade over the years they also have created and highlighted a distinction between the ‘town’ and the ‘country’ and some of the leaders (for example, Sharad Joshi of the Shetkari Sangathana) emphasizes that ‘Bharat’ is being exploited by ‘India’.

Answer : Under the NFSA, PDS ration shops will distribute upto 5kg of foodgrain per person per month to ensure food security for 75% of rural population and 50% and urban population at rice Rs. 3 per kg, wheat Rs. 2 per kg and pulses Rs. 1 per kg. Across the length and breadth of our country, the various states have different production and consumption patterns, at the same time the NFSA centralizes the procurement and allocation process.

• For instance, Tamil Nadu has universalized the food allocation whereas the central arrangement calls for identification and allocation, which is different from the state-approach, which could give rise to a disagreement. There is vast difference in the consumption pattern also. Rice is the staple food of coastal regions whereas northern States as UP, Punjab, Haryana – consumption is more towards wheat.
• Further the NFSA has moved towards the individual from household, this would lead to reduction in allocation to some households. Regional differences in the intake of PDS in household food budget are vast. Whereas in north – central India only about 40% of the people buy grains from ration shops, nearly 85% in the south use food from ration shops. However, if the PDS system is reformed according to the different requirements of states being addressed, along with local procurement and distribution, this Act can go a long way in promising food security to the citizens of our nation. As the PDS system matures and proves effective, the states should be brought to have more ‘say’ in distribution patterns and identification of beneficiaries so as to address their different requirements arising from differing production.

Answer : The salient points of NTP - 2012 are;

• Increase rural tele-density from the current level of around 39 to 70 by the year 2017 and 100 by the year 2020
• Broadband –“Broadband For All” at a minimum download speed of 2 Mbps
• Domestic Manufacturing- Making India a global hub
• Convergence of Network, Services and Devices

Simplification of licensing regime: Unified Licensing, delinking of Spectrum from License, Online real time submission and processing. It will allow companies to provide ISP, fixed line, international long distance, national long distance, and a few other services through a single licence, whose cost has been proposed by the DoT at Rs. 10 crore.

Achieve One Nation: Full Mobile Number Portability and work towards One Nation - Free Roaming. With the new policy in place, consumers who use national roaming can now expect to pay local call charges though it is unclear when ‘free roaming' will be initiated. At present, consumers pay local call charges and a premium when travelling outside their service area. The policy also allows national number portability.

Resale of Services: Services resale is universally recognized as a way to increase competition without duplicating infrastructure or fragmenting the spectrum.

Answer : Demographic dividend arises due to fall of dependency ratio and increase in the working age population (15-60 years). India has come at the stage of its demographic transition that its dependency ratio has fallen and its working population would be about 60 per cent of its total population. It will be the youngest country in the world by 2020.

• Demographic dividend has contributed less to growth in India because in the past technology has contributed more in raising production and productivity. The labour force is marked by lower level of education, skill and training and hence low productivity. It is important to create more productive human resources/capital to reap maximum benefits from demographic dividends.

Answer : Besides the economic factors, certain non-economic social factors also act as determinants of economic development in a country.

• Human Resources: Man provides labour power for production. The capacity of an efficient and skilled labour to contribute to growth will decidedly be high. But in case human resources remain either unutilized or the manpower management remains defective, the same people who could have made a positive contribution to growth activity prove to be a burden on the economy.
• Technical Know-How and General Education: The technical know-how and education has a direct bearing on the pace of development. As the scientific and technological knowledge advances, man discovers more and more sophisticated techniques of production which significantly contribute to the increase in output per man hour and steadily raise the productivity levels.
• Political Freedom: Looking to the world history of modern times one learns that the processes of development and underdevelopment are interlinked and it is wrong to view them in isolation. We all know that the under-development of India, Pakistan, Bangladesh, Sri Lanka, Malaysia, Kenya and a few other countries, which were in the past British colonies, was linked with the development of England. England recklessly exploited them and appropriated a large portion of their economic surplus.
• Social Organisation: Mass participation in development programs is a pre-condition for accelerating the growth process. However, people show interest in the development activity only when they feel that the fruits of growth will be fairly distributed. Growth of monopolies in industries and concentration of economic power in the modern sector is an undisputed fact.
• Corruption: Corruption is rampant in developing countries at various levels as may be seen in tax evasion and misuse of regulatory system and it operates as a negative factor in their growth process. Until and unless these countries root-out corruption in their administrative system, the capitalists, traders and other powerful economic classes will continue to exploit national resources in their personal interests.
• Desire to Develop: Development activity is not a mechanical process. It is a human enterprise. The pace of economic growth in any country depends to a great extent on people's desire to develop.

Answer : Round-tripping is also known as round-trip transactions or "Lazy Susans".

• Round-tripping is defined as the channelling by direct investors of local funds to SPEs abroad and the subsequent return of the funds to the local economy in the form of direct investment.
• It was defined by The Wall Street Journal, as a form of barter that involves a company selling an unused asset to another company while at the same time agreeing to buy back the same or similar assets at about the same price.
• Round trips are characteristic of the New Economy companies. They play a crucial part in temporarily inflating the market capitalization of energy traders.
• In international scenarios, round tripping is used for tax evasion and money laundering as well.
• Potential transfer pricing abuse, where intangible property is developed by a parent company, which licenses it to a related party - manufacturer located in a low-tax jurisdiction. The manufactured goods are resold to the parent for distribution to ultimate consumers.

• Bhoodan movement was an attempt at land reforms not through government legislation but through a people movement.
• Potential of the movement was enormous because it was based on the principle of trusteeship.
• If the landlords do not behave in a trusteeship mode then a satyagraha could be launched in the Gandhian way against them. It created a moral ambience, and even the communist leader Sri E.M.S. Namboodiripad admitted its potential in Kerala.

Answer : Positive Impact

• Export of agricultural produce has created foreign currency.
• Geographical indexing has improved demand for such commodities in international markets and this have positive effect on farmers’ income.

Negative Impact

• Cash crop demand increase farmer focus on these crops. But demand and price of these crops may fluctuate. This has major implication when farmer deviate from food crops. This has issues for countries food security.
• Global commodities market has direct bearing on income of farmers. Fluctuation in prices creates distress for poor Indian farmers.
• Input cost for agriculture is also affected by global events. Tension in Eurasian region can
• WTO negotiations have implication for agricultural subsidies. Any change in MSP structure can impact farmers very badly.
• Majority of farmers have small holding. They have not sufficient funds to invest in modern agricultural practices.

Strategies to tackle the challenges of posed by globalization: In the era of globalization the rural societies can be adopting certain strategies for safeguarding their existence, livelihood and culture. The strategy includes:

• Mobilization of small farmers for regional campaigns. Building good coalition with likeminded organizations (NGO's and trade unions)
• Establishing the mechanism to challenge MNCs
• Setting goals with specified objectives so that they reach the grass root level of Indian societies. Planning at grass root level with full people participating in different levels
• keeping gender balance
• Forming networks among leaders in various levels with solidarity and commitment
• Creating common understanding and purpose among the people in all the sectors of the society.

Answer : Major Recommendations of 13th Finance Commission:

• The share of states in the net proceeds of the shareable Central taxes should be 32%. This is 1.5% higher than the recommendation of 12th Finance Commission.
• Revenue deficit to be progressively reduced and eliminated, followed by revenue surplus by 2013–14.
• Fiscal deficit to be reduced to 3% of the GDP by 2014–15.
• A target of 68% of GDP for the combined debt of centre and states.
• The Medium Term Fiscal Plan (MTFP) should be reformed and made the statement of commitment rather than a statement of intent.
• FRBM Act need to be amended to mention the nature of shocks which shall require targets relaxation.
• Both centre and states should conclude 'Grand Bargain' to implement the model Goods and Services Act (GST). To incentivize the states, the commission recommended a sanction of the grant of Rs 500 billion.
• Initiatives to reduce the number of Central Sponsored Schemes (CSS) and to restore the predominance of formula based plan grants.
• States need to address the problem of losses in the power sector in time bound manner.

Answer : The period 1967 to 1978 is known as Green Revolution, during which India became self-sufficient provider of wheat and rice. During partition, India lost western Punjab to Pakistan, thus losing a major agricultural resource. A couple of bad monsoon seasons followed. In 1955, India faced a food crisis reminiscent of Bengal famine of 1943.

• United States came to rescue. In 1956, India signed a deal, called PL 480; it allowed India to buy 3.1 million ton of wheat per year for three years. Major weakness was exposed; India could become extinct through starvation. Indian scientists were sent to American agricultural Universities (Cornell Kansas) for training. India set up agricultural universities in all major states.
• India Needed a Revolution: The period 1967 to 1978 is known as Green Revolution. India promoted increased farming land, developed and used grains hardened against pests, promoted double crop year and better irrigation techniques. Finally, India is not only self-sufficient; it has become an exporter for many of the grains, especially Rice.
• There is a more important and interesting background story. In India, wheat was available for 5,000 years. After war, the US forces started to re-build Japan. S. Cecil Salmon (US Agriculture Research Service) was assigned to analyze the existing agricultural products and make recommendations. Salmon came upon a dwarf variety of wheat, known as Norin. The dwarf plants had a lot of grain with little foliage. He sent the seeds to Washington State University. It took 13 years for a research team to develop Gaines dwarf in 1959. Norman Borlaug took Gaines dwarf to 'International Maize and Research Center' and started to cross breed with the best varieties of wheat available in Mexico.
• In 1963 Borlaug visited India on invitation to study wheat breeding facilities for advice. In 1966, India imported 18.000 tons of two new strains of dwarf wheat: Lerma Rojo 64A, and Sonora 64.
• In 1968, wheat production far exceeded the demand, strained the existing infra-structure for transportation distribution and storage. The green revolution had started.

Answer : The main reason responsible for the increase in bilateral FTAs is the loss of trust in the success of multilateralism, especially caused by stalemate in the conclusion of Doha Development Round of the WTO. Doha Round has missed several deadlines, viz. 2005, 2008 and now waiting for resolution of sticky issues like subsidies, NAMA, Singapore issues and Special and Differential treatment in its December Ministerial Meet in 2013.

• Other Perspectives: Increasing number of bilateral FTAs may also be seen as an effort of economic integration and promotion of free and open trade and on the part of countries. It is also argued that the economies by entering into FTAs and RTAs are able to put a better bargaining front in the WTOs multilateral or plurilateral system as well.
• Conflicts: The former DG of the WTO said that bilateral FTAs not only make the global trading complex, but they also go against the spirit of multilateralism and plurilateralism.
• Technically, however, as long as the WTO members are keeping their tariff under the WTO bound rates or below that, there is no violation of WTO norms.

Answer : The crisis in Ukraine is the latest reminder of how energy permeates the geopolitical landscape and is a fundamental element of national power. It can be a source of political leverage or vulnerability for individual countries, and can promote economic prosperity or instability. Beyond the evolving energy relationship between Russia and its neighbors, which demands major changes in European policies, ongoing shifts in markets demonstrate that energy has again become one of the most strategic and influential determinants of U.S. engagement with the outside world. One is the radical – and surprising – increase in U.S. production of oil and gas, which changes the country’s position in global energy markets more profoundly than at any other time in decades. But its policy implications are poorly understood, and the future trajectories of that production growth are highly uncertain. Other, arguably more enduring developments are the rapid growth of Asian demand for fossil fuels, especially in China and India, and energy’s ties to climate change concerns. These and other energy issues comprise a complex confluence of domestic and international interests and policies.

A synoptic overview: Unrests in the Middle East region have intensified since early 2014 with an escalation of the military conflict between Israel and Gaza, while the rise of the new Islamic State (formally known as ISIS, theIslamic State of Iraq and Syria) has boosted further turmoil in Iraq and Syria. This puts a significant upward pressure on global oil prices, as it can result in disruptions of oil production in the region. The Middle East accounted for 32.2% of total global oil production in 2013.

• Meanwhile, political conflicts in some parts of North Africa have showed signs of deepening, posing a threat to security and economic activities in the region. Libya is on the brink of a civil war, as fighting between rival militias has raged on since 2014 and the country is experiencing the worst violence since its 2011 revolution. Crude oil production in Libya already dropped significantly from 1.8 million barrels per day in 2008 to 1.0 million barrels per day in 2013.
• Tensions between Russia and Ukraine have escalated, as a rebel group in eastern Ukraine is believed to continue receiving support from Russia. The European Union (EU) has, therefore, tightened its sanctions on Russia, including a restriction on the export of certain oil exploration and oil drilling related products to the country. This may slow Russia’s new oil projects, leading to supply disruptions. Russia has been one of the largest oil producers in the world, with crude oil output reaching 513 million tonnes of oil equivalent in 2013.

Role of WTO: The current energy crises have demonstrated that global economic governance is in disarray and rather unable to cope with these problems adequately. Thus, just at a time when effective global economic governance is more necessary than ever, the institutions forming part of it, such as the World Trade Organization (WTO), the International Monetary Fund (IMF) and the World Bank are confronted with a severe legitimate crisis, and calls for fundamental reforms of the global governance system are getting louder. Effective governance demands attention to processes that foster dialogue, accountability, and transparency. Such processes demand high-level political commitment from trade ministers and from all parts of national governments involved in strategies for engaging in the global economy.

• The task of improved global trade governance is not a technical, legalistic, or bureaucratic matter that can be solved by trade negotiators and diplomats in Geneva. Nor can it be achieved without a thorough consideration of the political demands and concerns driving divergent perspectives and expectations about the end goals of the WTO. Effective governance demands attention to processes that foster dialogue, accountability, and transparency. Such processes demand high-level political commitment from trade ministers and from all parts of national governments involved in strategies for engaging in the global economy. The task of improved global trade governance is not a technical, legalistic, or bureaucratic matter that can be solved by trade negotiators and diplomats in Geneva. Nor can be it is achieved without a thorough consideration of the political demands and concerns driving divergent perspectives and expectations about the end goals of the WTO.

Answer : Migration as a positive feature of a developing economy: Migration is considered to be a mark of a developing economy. Migration under the pull effect is desirable more than migration under the push effect.

• Sectoral migration from low productive sector to high productive sector is good because it increases production and productivity in the economy as well as income of the migrating labour. It also leads to growth of the industrial and commercial sector.
• Regional Migration from rural areas to urban areas is also good because it is supposed to uplift the income and living standard of the labour and at the same time fairly a large part of their income flows to rural areas as well.

Lack of Human Resource Planning: Migration in India is more market and need driven and not driven by a conscious human resource planning. Therefore it has led to many adverse effects including shortage of supply of labour force to agriculture fall in wages in the industrial centres due to excess supply of labour, poor transport and communication, poor living conditions and slums, pressure on already existing infrastructure, spillover effect on urban unemployment, social tension and conflicts etc.

Answer : Livestock is an integral part of India’s agricultural economy and plays a multifaceted role in providing livelihood support to the rural population. Livestock sector apart from contributing to national economy in general and to agricultural economy in particular, also provides employment generation opportunities, asset creation, coping mechanism against crop failure and social and financial security.

Department of Animal Husbandry, Dairying & Fisheries has been implementing several schemes for improvement and development of livestock in the country.

The schemes are:

• National Project for Cattle and Buffalo Breeding (NPCBB) aims at introduction of quality bulls with high genetic merit; quality control and certification of bulls and services at sperm stations, semen banks and training institutions; refresher training to existing Artificial Insemination workers, basic training to rural unemployed youth, training to professionals and organization of farmers orientation programmes.
• Livestock Insurance Scheme is a 100% centrally sponsored scheme, implemented on a pilot basis. Under the Scheme, crossbred and high yielding cattle and buffaloes were insured at maximum of their current market value.
• Milk production and Development Project (IDDP) in Non-Operation Flood, Hilly and Backward Areas' was launched in 1993-94 on 100% grant-in-aid basis. It aimed at Development of milch cattle; Increasing milk production by providing technical input services; and procurement, processing and marketing of milk in a cost effective manner.
• The central sector scheme 'Assistance to Cooperatives', started during 1999-2000, aims at revitalizing the sick dairy cooperative unions at the district level and cooperative federations at the state level.
• Dairy/Poultry Venture Capital Fund involves measures like milk processing at village level, marketing of pasteurized milk in a cost effective manner, quality upgradation and upgradation of traditional technology to handle commercial scale using modern equipment and management skills and to encourage new species of birds and low input technology for poultry farming among rural farmers.

Answer : According to the RBI governor, the bank had differences of opinion on the issues of interest rates, issue of new banking licences, acknowledging measures for fiscal consolidation and Islamic banking. Although traditionally governments and central banks take opposite sides in the growth-inflation debate, in recent days both sides have come out with sharp statements digging in their heels.

• The Central Bank’s remit is to keep inflation at a level that supports growth without triggering recession. The Central Bank does this with its monetary policy (determining the cost of money and thereby the quantity/flow of money supply in the economy).
• The Finance Ministry’s remit is to (a) balance the budget of the Government and (b) spend beyond income if it is required to stimulate the economy out of a recession. The Finance Ministry does this with its fiscal policy (of determining the income of the government through taxation, of determining expenses through budget allocations, of inflows through borrowings).

There are two corrupting influences:

1. The Ministry of Finance is under a political command that may prefer huge public expenditure not just to get out recession but also to secure the vote bank of the ruling party. That can result in short term political gains but trigger long term disaster through inflation. (India is a good example of this)
2. The Central Bank may not necessarily have the independence and may be controlled in subtle ways by the Government.

For long-run economic growth, monetary policy has to be run in tandem with good fiscal policy, if not subservient to it, until growth has reached its proper target. In addition, fiscal policy works best when implementing agencies within and outside of the state can absorb enhanced fiscal spend and deliver efficiently economic programmes. On this point it is relevant to point out that the crisis of performance in some state institutions has to be resolved if less doubt is to be cast on the state’s ability to carry out some of these developmental functions.

Any form of economic accord that is negotiated has to come with mutually agreed reciprocity between state, labour and capital. Economic crisis and discord can force upon us wittingly and unwittingly to take positions and make compromises that do not always speak best for our common national interests. A common-sense and rational outcome comes from good coordination between different players in the domestic economy and the management of powerful private and foreign state interests outside of our borders. Domestic disagreement and policy strife breaks down not only trust but formal and informal mechanisms of coordination.

Answer : Main Problems: The problems are at all levels exploration, production and distribution.

The problems of exploration are reflected in resource crunch, lack of technology and social and ecological constraints.

• In production, the cost of production and price limits offered by the government are at divergence. Apprehension is that prices offered would not cover the cost of exploration and production.
• In distribution, apart from lack of private participation, subsidized supply to non-target groups and inadequate overall supply etc. are major problems. There is immense shortage of gas for industries and households. Many of gas fired power plants have not started production due to shortage of fuel. The domestic supply pipelines have been developed only in the metros and some industrial cities. So far cooperation with other countries for pipeline supply to cover the gap between domestic supply and demand has remained sluggish.
• Government promoted participation of private sector in exploration and generation of gas, but private sector complains that prices offered are not conducive (far less than international prices) hence they are unable to produce and supply the committed amount.
• The way out: Increase exploration and production, explore shale gas, speed up international collaboration, develop supply infrastructure, promote market pricing, reduce subsidies for non-target groups, offer rational price to explorers and producers.

Answer : Agriculture Sector of Indian Economy is one of the most significant parts of India. Agriculture is the only means of living for almost two-thirds of the employed class in India. The agriculture sector of India has occupied almost 43 percent of India's geographical area. Agriculture is still the only largest contributor to India's GDP even after a decline in the same in the agriculture share of India. Agriculture also plays a significant role in the growth of socio-economic sector in India. In the earlier times, India was largely dependent upon food imports but the successive stories of the agriculture sector of Indian economy have made it self-sufficing in grain production. The country also has substantial reserves for the same. India depends heavily on the agriculture sector, especially on the food production unit after the 1960 crisis in food sector. Since then, India has put a lot of effort to be self-sufficient in the food production and this endeavor of India has led to the Green Revolution. The Green Revolution came into existence with the aim to improve the agriculture in India. The services enhanced by the Green Revolution in the agriculture sector of Indian economy are as follows:

• Acquiring more area for cultivation purposes
• Expanding irrigation facilities
• Use of improved and advanced high-yielding variety of seeds
• Implementing better techniques that emerged from agriculture research
• Water management
• Plan protection activities through prudent use of fertilizers, pesticides, and cropping applications

All these measures taken by the Green Revolution led to an alarming rise in the wheat and rice production of India's agriculture. Considering the quantum leap witnessed by the wheat and rice production unit of India's agriculture, a National Pulse Development Programme that covered almost 13 states was set up in 1986 with the aim to introduce the improved technologies to the farmers. A Technology Mission was introduced in 1986 right after the success of National Pulse Development Programme to boost the oilseeds sector in Indian economy. Pulses too came under this programme. A new seed policy was planned to provide entree to superior quality seeds and plant material for fruits, vegetables, oilseeds, pulses, and flowers. The Indian government also set up Ministry of Food Processing Industries to stimulate the agriculture sector of Indian economy and make it more lucrative. India's agriculture sector highly depends upon the monsoon season as heavy rainfall during the time leads to a rich harvest. But the entire year's agriculture cannot possibly depend upon only one season. Taking into account this fact, a second Green Revolution is likely to be formed to overcome such restrictions. An increase in the growth rate and irrigation area, improved water management, improving the soil quality, and diversifying into high value outputs, fruits, vegetables, herbs, flowers, medicinal plants, and bio-diesel are also on the list of the services to be taken by the Green Revolution to improve the agriculture in India.

Answer : Old architecture: The multilateral organizations have quota system, voting rights, definition and determination of the value of international currency etc. based on the realities of 1950s post second world war period. Americas, Western Europe and Russia, China and Japan continue to dominate these institutions.

• These institutions are also not prepared to face new kinds of problems arising from global integration such as financial crisis and contagion, monitoring and regulating the credit rating agencies, providing resources to the economies hit by financial crisis.
• There is problem pertaining to valuation of SDRs- the weightages in particular.
• Over use of dollar as an international currency, which itself is fluctuating and represents an economy full of uncertainty.

Need for reflecting modern world order: G-20 and particularly developing economies feel that these institutions need a new and realistic architecture. This would need increasing quotas and voting rights of emerging economies, new weights of SDR valuation, an arrangement of payments and reserves keeping different from dollar based system, arrangement for systematic currency swaps, global system for monitoring and regulating credit rating institutions, a global system to fight financial contagion and recession.

Answer : The ‘Make in India’ initiative aims at identifying select domestic companies having leadership in innovation and new technology for turning them into global champions. The focus will be on promoting green and advanced manufacturing and helping these companies to become an important part of the global value chain.

• The ‘Make in India’ initiative also aims at identifying select domestic companies having leadership in innovation and new technology for turning them into global champions. The focus will be on promoting green and advanced manufacturing and helping these companies to become an important part of the global value chain. The government is committed to improving the physical infrastructure. Development of dedicated freight corridors and investment in improving our ports and airports are underway. These corridors would house Industrial agglomerations along with smart cities. The private sector would be playing a significant role in these developmental works.
• The Government is committed to chart out a new path wherein business entities are extended red carpet welcome in a spirit of active cooperation. Invest India will act as the first reference point for guiding foreign investors on all aspects of regulatory and policy issues and to assist them in obtaining regulatory clearances. The Government is closely looking into all regulatory processes with a view to making them simple and reducing the burden of compliance on investors.

Since the new Government took over, a series of initiatives have been taken to revitalise the industrial sector in general and manufacturing sector in particular. To mention a few:

• The process of applying for Industrial License and Industrial Entrepreneur Memorandum has been made online on the e-Biz website 24*7;
• A vast number of Defence items have been de-licensed;
• The validity of Industrial license has been extended to three years;
• With a view to providing flexibility in working hours and increased intake of apprentices for on the job training, the Government has decided to amend a number of labour laws;
• An advisory has been sent to all Departments/ State Governments to simplify and rationalize regulatory environment which includes:
  • On-line filing of all returns in a unified form;
  • No inspection without the approval of the Head of the Department.

Answer : Organic farming has the twin objective of the system being sustainable and environmentally benign. In order to achieve these two goals, it has developed some rules and standards which must be strictly adhered to. There is a very little scope for change and flexibility. Organic farming thus, does not require best use of options available but the best use of approved options. These options are usually more complex and less effective than the conventional ones. The philosophy of the proponents of organic farming presents considerable difficulty to the scientists as the organic movement generally resists the comparisons between the two systems.

• The organic farming movement presents a challenge to the scientists who cannot and would not want to abandon a scientific approach. The present lower productivity of the system is a result of constraints that its practitioners have put upon themselves. Difficulty faced is with evangelising statements, that the products of the organic farming system— food and fiber—are in some way better than those from conventional agriculture. The Indian farmer should get the advantage of emerging global market on organic farming. Currently, 130 countries are producing certified organic products. A vast scope for promotion of organic farming in the export market, without compromising with the national food security exists in the country, as farming by tribals and under rainfed conditions is generally organic, since very little chemical inputs are used.
• Organic farming as a concept/philosophy is well tested in some of the western countries, though the same is not unknown to most of the nations. But in the Indian context, it needs to be looked into more critically, seeking answers to the following questions: What level of crop productivity is acceptable? Is it suitable for a country like India with such a large population to feed or can it fit in the niche areas? Are available organic sources of plant nutrients sufficient for organic farming in the form it is advocated? Are organic farming technologies sustainable in the long run?

Organic Farming: Prospects and Limitations: For India with its ever increasing population, the sustainable agriculture has to be based on site-specific balanced and adequate fertilisation, and an integrated plant nutrient supply system (IPNS) involving organics, inorganics and biofertilisers. What the country needs today is the conjunctive use of organic and inorganic sources of plant nutrients for sustainable productivity.

• Organic farming is a market demand-driven agriculture, aimed to cater to the foreign export and affluent section of the society in the country. However, in order to make a dent in the export market, we need to develop high-tech organic technology with strict quality control, meeting international quality standards prescribed for organic produce.
• Niches of the organic farming need to be identified. However, the real niches will be determined by the market infrastructure and the international links. The practice should be considered for lesser endowed regions of the country rather than in resource endowed regions which serve as the backbone of the country’s food security.
• The availability of organic manures in adequate amounts and at costs affordable by the farmers is a major problem. The increased mechanisation has further reduced the availability of manures with the farmers and this problem will become more acute in future. In such circumstances, post-harvest residues should be utilised to the fullest extent. However, to accomplish this objective, feasible technologies are needed for in situ recycling/rapid composting of on-farm residues and wastes, in addition to extension efforts to change the mindset of the farmers. Possibilities of using non-traditional organic sources e.g., slaughter house waste, should be exploited to partly supplement, plant nutrient needs of the organic farming systems.
• Changing cropping patterns with area under legumes is going down, shrinking area under green manures due to economic considerations, and reduced availability of lopping from forests, seriously restricts wide scale use of green manures. Inclusion of legumes in intensive cereal-cereal production systems as short duration grain or forage crops, as substitute to one of the cereals or as break crops, needs to be promoted.

Organic Farming: Its Relevance to Indian Agriculture: In Indian context, organic farming has to be practiced without synthetic pesticides, but complete exclusion of fertilisers may not be advisable under all situations. A holistic approach involving integrated nutrient management (INM), integrated pest management (IPM), enhanced input-use efficiency, and adoption of region-specific promising cropping systems would be the best organic farming strategy for India.

• As organic farming is attracting worldwide attention, and there is a potential for export of organic agricultural produce, this opportunity has to be tapped with adequate safeguards so that the interest of small and marginal farmers is not harmed.
• Organic farming may be practiced in crops, commodities and regions where the country has comparative advantage. To begin with, the practice of organic farming should be for low volume high-value crops, like spices, medicinal plants etc., beside fruits and vegetables, for which R&D support is required.
• Organic farming should not be confined to the age old practice of using cattle dung, and other inputs of organic/biological origin, but an emphasis needs to be laid on the soil and crop management practices that enhance the population and efficiency of below-ground soil biodiversity to improve nutrient availability. Performance of cultural techniques for weed control and that of bio-pesticides for pest management need to be evaluated under field conditions, preferably under cultivators’ management conditions. Besides the identification of regions suitable for the adoption of organic farming, the crops and their products should also be identified which are amenable for production through organic ways and have the potential to fetch a premium price in the international organic market.

Answer : Agriculture plays a pivotal role in the Indian economy. Although its contribution to gross domestic product (GDP) is now around one sixth, it provides employment to 56 per cent of the Indian workforce.

• Agriculture not only contributes to overall growth of the economy but also reduces poverty by providing employment and food security to the majority of the population in the country and thus it is the most inclusive growth sectors of the Indian economy.
• Small holdings agriculture plays an important for raising agriculture growth, food security and livelihoods in India. It may be noted that Indian agriculture is the home of small and marginal farmers (80%). Therefore, the future of sustainable agriculture growth and food security in India depends on the performance of small and marginal farmers.
• Small holding farmers face several challenges in the access to inputs and marketing. They need a level playing field with large farms in terms of accessing land, water, inputs, credit, technology and markets. They also face new challenges on integration of value chains, liberalization and globalization effects, market volatility and other risks and vulnerability, adaptation of climate change etc.

Major problems Marginal Farmers face in adapting Modern Technologies

• Lack of literacy rate in research area
• Need of micro-credit program is of immense importance in boosting the adoption of new agricultural technology in the research area
• No updation of new variety seeds among marginal farmers
• Field assistance need to be provided with better transport facilities to reach far-flung areas to better access of modern technology
• Lack of Small agricultural training institutes should be opened in the research areas to train the farmers with new farm technology

Answer : A heady mix of factors from lack of investment in supply chain, increase in farm inputs as well as a tightly-regulated market is behind the persistent food inflation India has witnessed over the past many years, according to analyses by experts.

• RBI consistently raises voice against states decisions to hike minimum support prices (MSP) frequently as primarily being the reason behind high food prices. The MSP (the rate at which states procure agricultural produce from farmers) for rice and wheat, for instance, has increased by more than 100 percent over the past 10 years.
• The RBI also conceded that the widely-blamed initiative, National Rural Employment Guarantee Scheme, also contributed at least 10 percent to high prices by raising rural wages. Retail food inflation has averaged 9.5 percent since January 2012.
• Vegetable prices have risen 64 percent over the same time. But beyond MSP and NREGS that have ‘pushed’ food prices higher, there are other factors that have “pulled” price up as well – mainly a rise in input costs such as labour, land prices, transport costs, etc.
• Experts argued that as agricultural areas around urban centres got converted to non-agricultural land, the transportation distance between farmlands and the final markets for the produce increased as well. Some experts have also laid part of the blame India’s rusty supply chain system. India mandates farmers to sell their produce only to mandis, long dominated by traders and middlemen.
• The government is now considering reforming the Agriculture Market Produce Committee (APMC) Act to allow farmers to sell directly to in the open market, the country supply chain system can remains in dire need of investment.
• According to a study, India had 6,300 cold storage facilities with capacity of 30 million tonnes (half of what it needs), which leads to wastage of about 18 percent of crop it produces. There is an urgent need of USD 9 billion investment in the coming years.
• For now, India has resorted to cracking down on hoarders, looked to unload more stock and announced a price stabilization fund. But in the absence of longer-term reforms such as tweaking the supply chain, as well tackling tougher questions such as what to do with MSP and NREGS, food price inflation may have been structurally etched into the economy.

Answer : The success of any economic policy is measured by its impact on poverty alleviation.This is particularly true of developing countries where three-fourths of the world's poor live. It is fashionable to have higher outlays in central and state budgets for social welfare. Rural education, sanitation, literacy, medical assistance, slum development are some of the broad categories under which assistance is sought to be provided. But, a year on year look at the figures shows that India even after 68th years of independence and 24 successful years of economic reforms, still lags behind where human development and its upliftment from deprivations is concerned.

Even after nearly two and a half decade of reforms no significant improvement is apparent. In fact, higher growth levels clocked by the economy have only widened the regional disparities and the inequality gap in society. So then, there has been no correlation between growth and poverty reduction measures in these years of reform.

• Despite these stunning reforms a lot more needs to be done towards poverty alleviation in the country. Much of the blame is being put on the manner in which the reforms have been implemented. It is stated to be an half-hearted attempt by the powers that be. Usually, reforms bring with them technological changes which makes labour redundant resulting in unemployment levels rising. And in a labour-intensive country like India this is what exactly happened.
• On the brighter side, what has also been observed is that once the reforms process falls in line and growth starts peaking, such adjustment problems get ironed out.
• No doubt, higher growth levels benefits the society as a whole. But, it is up to the policymakers to leverage the good performance for the betterment of the poor. Today, India has no option but to integrate with the world markets.
• The world has become one whole and with free trading zones. And, India has been falling in line with globalisation trends.In the 1990s the country's fiscal deficit was eight per cent and inflation was in double digits. But, today these ratios have fallen substantially and the government is in a position to invest in the socially vital schemes. When the reforms were first introduced the government's priority was to reduce the fiscal deficit. Government expenditure was pruned which choked off investments in the crucial social sectors.
• The government’s intention was good but implementation of policies was not done in a professional manner. The government should have kept aside higher outlays from the public investment funds towards the betterment of the poor, should have focussed on agricultural development which would have benefited majority of the rural poor, and should have strengthened the delivery systems and institutions implementing the social schemes. What actually happened is that all such good intent was only on paper. Today, the government is busy pruning its expenditure to come out of the fiscal mess. But, its zeal to cut the fiscal deficit is hampering developmental expenditure. Consequently, poverty alleviation schemes do not receive the required funds and consequently social sector spending receives a major cut this year.
• Innovative Measures: Majority of India's population lives in the villages and depends on agriculture for their livelihood. Hence, policy makers rightly focus on agriculture in their national policy document. But, investment charts show that agricultural income has been declining over the years and no concrete policy has been worked out to tackle the problem. Inadequate infrastructure, poor public distribution systems and delivery mechanisms have diluted the reform efforts. Hence, if the reforms have to benefit the vulnerable sections of society India needs to put in place a very strong social security network.
• Labour reforms have been announced. But, till such time that a proper functional labour agency is not in place it will only increase the misery of the labour force. By removing the protection band for the labour force it would only expose labour to the rigidities of the market. This would defeat the very purpose of reforms and reflect that overall the structural reforms process is going a waste.

Answer : Science is an essential for the development of the nation. Its most important contribution is that it helps in creating the larger social ecosystem required for growth. It promotes new ideas, removes all feudal institutions, conservatism and superstition. It makes society open to change-change which is essential for the development of society. India is still on the path for development. Though there may be many issues which trapped India still in developing condition, Science and technology backwardness remains one of the most important challenges before India among other for its development

Some Examples:

1. Cyber Security: Lacking in field of cyber security which is necessity in this technology driven era.
2. Defense Sector: India defense sector still dependent on import of weapons, fighter planes, helicopters etc. This creates huge financial burden to India's economy and its growth.
3. Agriculture Mechanism still lacking: Creates issue of food security and disguised unemployment.
4. Education Sector: Lacking research and development based curricula- no University in top 100 world Universities, Skilled students (graduates) produced.
5. Indian aviation Sector: Indian aviation sector is still dependent on foreign technology-creates burden to economy.
6. Energy security: Lack of technology make India dependent on foreign technology for their nuclear power plant, solar plant establishment.
7. Prevalence of superstition: Prevalence of superstition still exists because science is everyday life of people still to incorporate.
8. Health: Though India achieved higher in genetic medicine but it requires innovative approach to deal with growing menace of diseases.

It is not that India does not grow in field of science and technology, rather from ancient to modern period it persistently improved in this field.

Some Examples are:

• Space technology
• Genetic Medicine
• Health Sector
• Renewable energy initiative (International Solar Alliance)

Answer : Indian Financial Code

• Indian finance code aims to regulate the financial sector and introduce principles for financial regulation and the constitution, objectives, powers and interaction of financial agencies. Its aim is also to bring about coherence and efficacy in the financial regulatory framework.
• Under this code, the Financial Sector Appellate Tribunal was established to exercise the jurisdiction, powers and authority conferred upon it. The Code deals with the establishment of financial agencies, establishment and structure of the tribunal, allocation and regulation of financial services. Moreover, the Code also clarifies financial consumer protection, prudential regulation, contracts, trading and market abuse, capital controls, resolution of financial service providers, financial stability and development council, development (provisions for review), public debt management agency, offences, functions, powers and duties of tribunal, miscellaneous, and schedules.

Global Financial Governance: The global financial crisis that began in 2007 and deepened in 2008 exposed major weaknesses in financial and macroeconomic policy coordination, and profound flaws in financial risk management and regulation in a number of advanced countries. The severity of the crisis led global leaders to recognize that they must find a way to reform the global regulatory architecture to ensure that the financial system can absorb shocks while continuing to function efficiently.

• In response to the crisis, the Group of Twenty (G20) met in November 2008, for the first time at the leaders’ level, to agree on a comprehensive strategy to restore trust in the financial system and to limit the fallout from the crisis on global output and employment. Currently, there is a complicated governance structure for the program to reform the global architecture of financial regulation that consists of three entities - one ad hoc and self-selected (G20), one treaty-based and systemic (International Monetary Fund [IMF]) and one a creation of the G20 (Financial Stability Board [FSB]).
• The analysis of the prevailing situations such as Competitive Monetary easing signaling towards irresponsible monetary policy, increased vulnerabilities of the economies due to integration with world economies etc.,suggests a number of actions that the IMF and FSB should take to strengthen their cooperation and effectiveness, and highlights some of the problems created when no single agency has overall responsibility for the regulatory oversight of the international financial system.More broadly, it concludes that an appropriate framework for the governance of macroeconomic and financial policy cooperation in an interconnected world is a bimodal structure which includes both a restricted executive group of leaders who can implement major changes in the strategic policy direction to meet unforeseen developments and a universal, treaty-based official international financial institution that provides regular, consistent policy advice to its members.
• A more effective structure of governance over international economic policy cooperation would be possible if the countries and jurisdictions whose leaders made up the restricted executive group were to be selected by a more systematic and widely accepted process than at present.

Additional Material: Global Finance and Sustainable Development

• The issues under consideration are what kind of a global financial system we want? We require such a system that can serve its core purpose of growing and sustaining economy.
• UNEP unveils new vision for a global financial system in its report "The Financial System we need": it sought efforts to achieve a worldwide transition to a financial system that supports sustainable development. The report outlined that there are policy innovations in place which improves system processes in stock markets, supports sustainable financial policy and efforts, and strengthen regulation governing sector. For example bourses (stock exchanges) require sustainability disclosure, focus on social and environmental and risk management and green finance (at the heart of development of finance sector).Another example is that there are countries that conduct review of climate risks to the country's financial sector, incentives for investment in infrastructure and clean energy.

What should be done to reform global financial governance?

1. Banks can increase access to sustainable finance
2. Can improve governance be conducting tests to assess the impact of issues like air pollution, climate change, and inequality on portfolios and business models.
3. To increase insurance cover

International cooperation is also necessary to create a global governance structure that focus explicitly on sustainability and finance policymakers can even set up an international research consortium to promote under explored-topics and themes in sustainable finance.

Answer : Digital technologies have permeated into more and more aspects of our private and public life spaces. A lot of us increasingly depend on them to order groceries, book a taxi ride or train and flight tickets, file tax returns and apply for a passport. The entire basket of Information and Communication Technologies (ICTs), which include laptops, tablets, smartphones, broadband and Wi-Fi connectivity are seen to represent a new wave of general purpose technologies, similar to what electricity was in the early 20th century and steam engines were in the early 19th century. On the other hand, India, home to the second largest population in the world and witness to relatively higher economic growth rates in the past few years, is seen as an important market, still untapped in terms of usage of digital technologies.

• There are many within the country, and outside, who are growing increasingly impatient with the reality that we are not anywhere close to global benchmarks when it comes to the state of our basic physical infrastructure - roads, water and electricity and also those related to sanitation, public health and primary education.
• The frustration manifests more amongst those who see themselves connected, or having a potential to connect, to important global networks and supply chains, such as, for software and financial services and commodity trading, and for whom the aforesaid blemishes negatively affect their bargaining power vis-à-vis other constituents of these networks.
• Digitalization though becoming necessity in this globalised and technology driven era but Indian digitalization has some challenges:-
  • First and foremost is that the entire programme is designed as a top-down model.
  • Broadband highways, now called BharatNet, is supposed to connect up to gram panchayat, but laying fiber optic cables is the least of the challenges here.
  • Accessibility to infrastructure
  • Illiteracy
  • Lack of skill
  • Connectivity
  • Economic constrains
• Framers of development policies worldwide, and in India, have realized that an explicit recognition of the pathways through which the poor and marginalized contribute and benefit in the economic growth process is important. The entire human development discourse derives from such an understanding. More recently, it has also played a key role in informing the newly formulated Sustainable Development Goals (SDGs) that were adopted by the United Nations General Assembly during the SDG summit in New York on September 25, 2015.
• While one cannot deny the importance of digital infrastructure, such as the ones mentioned above, in the present age, it is equally important to understand that they may not be of much help in addressing governance and development concerns unless they are integrated into a wide reforms agenda, which could often involve not-so-popular, structural and institutional change. One such could be the long-called-for, real and effective devolution of functions, finances and functionaries to local government bodies, which has, in most instances, continued as a mere lip-service even after Constitutional Amendments of the early 1990s.
• Many studies have been conducted by researchers from reputed academic institutes in India and across the world on the problems that plague Indian experiments in using ICTs for governance and development, and they point to the need of bringing a greater understanding of local contextual realities into project designs.
• Amidst the ongoing endorsements by global corporate heads of the Digital India programme, we should not forget that unless use of digital technologies is appealing and makes sense to an Auxiliary Nurse Midwife (ANM) in a village health sub-centre, an anganwadi worker, a teacher in a government primary school, a village accountant in the revenue department, an agriculture assistant, a fair-price shop owner and a food inspector and similar such frontline service providers, who are the face of the state for many of our fellow citizens, the promise of leveraging digital technologies for achieving sustainable development may continue to elude us.

Answer : Impossible Trinity

• The Impossible Trinity (also known as the Inconsistent Trinity, Triangle of Impossibility or Unholy Trinity) is the hypothesis in international economics that it is impossible to have all three of the following at the same time:
• A fixed exchange rate
• Free capital movement - Freedom to invest and withdraw money
• An independent monetary policy - Which is essentially managing inflation

Significance for Indian Economic Policy Makers: The Global Financial Crisis of 2008 and the heightened macroeconomic and financial volatility that followed the crisis raised important questions about the current international financial architecture as well as about individual countries' external macroeconomic policies. Policymakers dealing with the global crisis have been confronted with the 'impossible trinity' or the 'Trilemma', a potent paradigm of open economy macroeconomics asserting that a country may not target the exchange rate, conduct an independent monetary policy and have full financial integration, all at the same time. This issue is highly pertinent for India. A number of challenges have emanated from India's greater integration with the global financial markets during the last two decades, one of which includes managing the policy tradeoffs under the Trilemma.

• The rise in the volatility of global capital flows has made macroeconomic management increasingly complex especially for emerging economies that are striving to achieve a balance between the diverse objectives of robust growth rate, sustainable current account deficit, competitive exchange rate, access to adequate external capital for financing investment, moderate inflation, and sufficient international reserves. This has also reignited the debate on suitable macroeconomic management measures. One of the main challenges that emerging economies like India face today as they integrate with global capital markets is managing the trade-offs presented by the well-known Impossible Trinity or open economy Trilemma and in this, India is no exception.
• The policy combination of exchange rate stability and financial openness has been the most dominant over the past two decades. India seems to have actively managed its exchange rate, building up a high level of international reserves by intervening heavily in the foreign exchange market and has also managed to retain some control over domestic monetary policy. In fact, active intervention in foreign exchange market coupled with maintaining a reasonable degree of control over international capital flows seem to have emerged as a potent combination of policy instruments in India as it strives to manage the macroeconomic Trilemma. These issues are likely to be highly relevant in the current context in India as policy makers actively engage in inflation targeting to control domestic inflationary pressures, the Rupee exhibits renewed volatility in the face of foreign investment inflows and India strives to revive its erstwhile high growth rate.

Current Situation: India has so far not attempted to manage all three factors. The country currently follows an independent monetary policy but it follows a mid-path in controlling the other two. The currency is partly managed and certain capital flows are freely allowed while others are restricted. This has worked alright until now. Even if the RBI cuts its policy rates to suit domestic needs, the outflow of funds is limited due to the restraints on capital flows. The currency is also not that greatly affected.

• But the RBI has made it clear that it would like to move towards full convertibility over the long-term. If that happens, RBI may not be able to maintain a tight rein on interest rates. An independent monetary policy will be difficult given that rupee is nowhere close to becoming a reserve currency like the dollar.

Answer : Democratization of economic policy meant to shift decision-making power from the profession experts sitting behind the closed doors to a larger group of public stakeholders/citizens that includes workers, ordinary citizens, rights groups, civil society organizations, NGOs etc. such a kind of approach can also address the flows inherent in capitalism that is prioritizing self- interests only, manipulation for personal benefits etc.,

• The argument advanced in favor of democratization of economic policy is that it will lead to better outcomes in terms of ensuring equitable distribution of resources. It will also deal with the problem of crony capitalism by constraining those policies that favor capitalists unevenly vis-s-vis poor.Poverty, inequality and unemployment have assumed permanence character in India. Economic policies in India have hitherto not been able to remove them completely and whatever progress has been done it at the snail’s pace. So in this backdrop we can say that in India as well there should be a say of all the stakeholders in framing economic policies.

Answer : The question deals with shortcomings in the Indian manufacturing sector. The limitations and efforts undertaken to overcome those limitations should be discussed.Reference to the past efforts by government and relevant policies may be mentioned.

• Share of agriculture and allied sector is decreasing every year - <14% now
• Service sector is doing well - 60% to GDP, but still India is at 15th position in world in Service sector/GDP ratio.
• Infrastructural bottlenecks
• The cost of doing business is much higher in India than in other countries
• Labour market rigidities
• Recent initiatives of Government
• New National Manufacturing Policy with an aim to increase the sectoral share of manufacturing in GDP to at least 25% by 2022;to increase the rate of job creation so as to create 100 million additional jobs by 2022; and to enhance global competitiveness:
• Labour reforms in Rajasthan
• Multi retail FDI level increased.
• MSP, APMC amendments

Answer : Out of the entire aviation sector companies only Indigo is in profit.

Enumerate reasons for the same: more tax, tightly controlled by government, not good regulator, etc.

What should be done

• Capacity enhancement: Construction of new airports, expansion and modernisation of existing airports, improvement in connecting infrastructure (road, metro, sea link, and so on.) and better airspace management.
• Modernization: Separation of Air Traffic Control (ATC) from Airport Authority of India (AAI).
• FDI: Allow 49% FDI by the foreign carriers in domestic airlines

India as a Trans-shipment Cargo Hub

• Strategic Geographic location of India
• 24×7 Customs Operation

Safety: Safety Programme by DGCA and safety management systems

Manpower Training: Acute shortage of trained Pilots/commanders in India. World class education and training sector

Independent Regulatory Body: Existing Directorate General of Civil Aviation could be subsumed in the proposed Civil Aviation Authority as an enforcement wing.

• 50% of our population is below 25 years of age and hence we have a high proportion of our population in the working age group.
• Demographic dividend without jobs and skills will be converted into demographic disaster
• Spread of left wing extremism has one of the reason as rising frustration of youth in the areas
• New social evils such as suicides, depression, violence, drug abuse and criminal tendencies increase in youth
• Need to channelize the energy of this youth in the right direction towards the development and growth of the nation.

Steps taken by the government

• National Skill Development Council and National Skill Development Corporation (NSDC)
• Various area based programs such as Roshni in the Left Wing Extremism affected areas or the red corridor, similarly Himayat programs aims at empowerment of the Kashmiri youth.
• The National Manufacturing Policy of the government aims at creating 100 million new jobs.
• MGNREGA 2.0 is planning to create infrastructure which will require creation of skilled labour.
• The procurement policies of the government make it mandatory to buy from MSMEs
• National Rural Livelihood Mission (NRLM) aims at providing gainful self-employment and skilled wage employment opportunities to the rural youth.
• The SHG-Bank linkage program provides credit facility for self-employment.
• The Government has increased the number of higher education institutions. For example, new IITs, IIMs, AIIMS and AIIMS like institutions
• The other welfare programs such as the mid-day meal, free medicines, Right to education etc. aims at creating an educated and healthy workforce for future.

Answer : Cash Crop Farming is also called commercial farming and cash cropping, it is a type of farming in which cash crops are grown. Cash crops are those which are produced for the purpose of generating cash or money. The products are therefore intended to be marketed for profit. Cash cropping is distinct from subsistence farming. In contrast to the aim of cash cropping, subsistence farming is practiced for sustenance, that is, for the food of the farmer and his family. Subsistence crops are also grown for feed of the farmer's livestock including working animals.

Advantages

• Better pricing for the products.
• Increased income for the farmers.
• Increased export and increased flow of Forex to the country.
• Introduction of new technology to increase production.

Disadvantages

• Increase vulnerability to the global fluctuations for the poor farmers.
• High risk factor associated with cash crops.
• Increase risk of credit to produce the cash crops.
• Staple food production will suffer.

Farmers in India are suffering under debt-trap in almost every part .It signifies the deplorable conditions of farmers in India (farmers' suicides in Maharashtra, Andhra Pradesh, etc.)

Answer : Inclusivegrowthbasicallymeans,"broadbasedgrowth,sharedgrowth,andpro-poor growth". It decreases the rapid growth rate of poverty in a country and increases the involvement of people into the growth process of the country. Inclusive growth by its very definition implies an equitable allocation of resources with benefits incurred to every section of the society. But the allocation of resources must be focused on the intended short and long term benefits of the society such as availability.

Strategy

• Skill training programme - Roshini , National Skill Development Commission, Udaan , Himayat, ITI colleges, etc.
• Employment generation programme - MGNREGA , Indira Aawas Yojana , Social Security Schemes , Food Security Act, etc.
• Financial Inclusion - Swavalamban, Swabhimaan schemes, etc.

Challenges

• The employment challenge: Large unemployed youth
• Access to essential services: A person is poor because her endowments of capital, land, labour and skills are meagre, and also because her access to public goods and services and natural resources is limited
• Social justice and empowerment
• Environment Sustainability
• Gender Equity
• Governance

Answer : A Foreign direct investment (FDI) is a controlling ownership in a business enterprise in one country by an entity based in another country. Foreign direct investment is distinguished from Portfolio Foreign Investment, a passive investment in the securities of another country such as public stocks and bonds, by the element of "control". The origin of the investment does not impact the definition as an FDI, i.e. the investment may be made either "inorganically" by buying a company in the target country or "organically" by expanding operations of an existing business in that country.

The following are the factors that influence the inflow of FDI in India

• Policy: Liberal industrial and trade policy, Foreign exchange policy (FERA in India have pulled in FDI), Tax policy (clear rules like BAPA and capital gains)
• Intellectual Property Right laws: Uruguay round negotiations have set the clear expectations on Patents
• Market size, GDP: The market size (like India have a huge consumption market), GDP growth rate compared to other countries
• Foreign Exchange Reserve: This determines the nations capability to control monetary policies and avert any BoP crisis, hence builds the confidence in the investors
• Other factors: Cost effective Infrastructure, low labour cost, presence of R&D, Debt to GDP ratio, industrial dispute resolution mechanism, inflation rates, market competition laws

FDI can boost innovation in India because:

• R&D needs huge investments and long gestation periods. Only deep pockets of FDI investors can afford it.
• Brings administrative ethics, management process and technologies that aids and boosts investments.
• Collaboration of domestic and foreign minds is bound to innovate better.
• Growth in employment and salaries creates new demands from emerging middle class that opening new avenues for innovation. For example, dish washers.

Answer : APMC is a market/ mandi provided by state Government to farmers to sell their agriculture product at a decent price. It has got some merits as well as demerits.

Agricultural Markets in most parts of the Country are established and regulated under the State APMC Acts. The whole geographical area in the State is divided and declared as a market area wherein the markets are managed by the Market Committees constituted by the State Governments. Once a particular area is declared a market area and falls under the jurisdiction of a Market Committee, no person or agency is allowed freely to carry on wholesale marketing activities. The monopoly of Government regulated wholesale markets has prevented development of a competitive marketing system in the country, providing no help to farmers in direct marketing, organizing retailing, a smooth raw material supply to agro-processing industries and adoption of innovative marketing system and technologies

Merits

1. It provides a designated place to farmers to sell their products with surety"
2. It is having storage/ cold storage facility which farmers doesn't have.
3. It ensures farmers a fixed return for product, they don't have to find buyer every time."
4. In absence of lack of knowledge of their product prices and lack of storage, farmers don't have to wait for product to get spoiled, face hassles in selling their product or sell at dirt cheap rates.

Demerits

1. The middleman in the mandi/ market buy product at very low price compared to market prices hence the benefits which farmers should have reaped, these people are booking."
2. The hoarders keep the product in storage and create problem in demand/ supply system"
3. This results in inflation in the food product in spite of having a good harvest (not good for economy)"
4. The number of markets is not enough and the farmers are required to travel a long distance before selling their product.

Alternatives

1. Make this market more competitive by letting private players, social entrepreneurs compete.
2. Letting electronic private Mandis operate which will help the farmers make more informed decision.
3. Also, contract farming and corporate farming will insure the products and farmer before in hand.

Answer : Both these institutions are criticized for having undemocratic governance structure dominated by western industrialized economies, in fact tradition is that the US citizen always heads the WB and the IMF is largely headed by the European citizen only. Secondly, the approach adopted by these institutions in formulating their policies appears to be benefitting western economies. For example IMF while providing loans imposes certain conditions termed as 'Washington consensus' that calls for the liberalization, privatization and deregulation of nationalized industries leading to overshadowing the economic sovereignty of the concerned government. Once such reforms are undertaken they will benefit these industrialized economies only.

• Despite these inherent weaknesses we cannot overlook multitude of roles played by these institutions in developing world economies, Such as by ensuring macroeconomic stability in turbulent times, providing development finance, and reporting on country performance. Additionally, they generate knowledge to assist policymakers worldwide. WB work on reducing poverty, working with fragile states to ensure macroeconomic stability and delivering physical infrastructureparticularly in immediate post-conflict situation , implementing sectoral programs in education, infrastructure, and the environment along with responding to natural disasters have taken the world economies to a greater level. Whereas financial support provided by the IMF to the member countries experiencing temporary BOP difficulties has helped in ensuring the regional as well as global economic stability. WB is committed to the cause for promotion of foreign investment and international trade facilitation of capital investments. This fuels energy in the global economy. The bank is an advocate for the creation of free markets for achieving market efficiencies leading to optimum utilization of resources thus helping world economies.

Answer : RRBs have taken deep roots and have become a sort of inseparable part of the rural credit in India since their birth. The edifice on which the RRBs were built had the rural ethos, local feels and pro-poor focus. But soon after they turned into loss making entities and deviated from their core objective of lending to the weaker section as they could not find sustainable fund raising options. To transform such a pathetic situation government constituted various committees from time to time such as Khusrau committee, Narsimham committee, etc.

• It is against this backdrop RBI recently granted in principle licenses for 10 small finance banks (to achieve the objectives once given to RRBs), mostly MFIs already under the supervision of RBI as NBFCs. They are at the bottom of the pyramid working at grassroots level. They will not only provide bank accounts but also loans to run their pygmy businesses and get out of income poverty.
• The entry of MFIs (NBFCs) in rural banking will improve the liquidity and help shape the lending policies and risk management practices along with increasing the strength of delivery networks. It will lead to optimum utilization of resources by outsourcing operations in which they do not have expertise such as treasury and cash to the universal banks. It will enhance cost effectiveness consequently will improve the financial viability of these institutional models thus increasing their chances of success. SFBs (MFIs-NBFCs) may collaborate with the existing universal banks and work with them.
• This will increase the availability of products and services and also the interests of the universal banks which find it unviable to open a branch in the backward rural areas. Niche products will be available such as gold loan. Furthermore, the mandate to lend only for financial inclusion, including small business units, small and marginal farmers, micro and small industries and unorganised sector entities makes them to achieve the core objectivesof rural banks. Key indicators of financial inclusion such as no. of districts covered, no. of branches, credit deposit ratio, availability of funds at lowers costs will substantially improve. It will lead to competition between RRBs and MFIs-NBFCs and a win-win situation for the end customers.

Answer : PSBs governance structure is not autonomous. Members of the governing bodies are most often selected by political masters. These members grant loans arbitrarily and at lesser interest rates. Further, loans are not granted to those needy. PSBs often end up giving loans to those who lacks credentials and financial strength. It may be because of compulsion or out of vested interests. To reform the governance structure PJ Nayak committee has come out with certain commendable recommendations so that autonomy of these PSBs can be secured which will lead to their efficient functioning.

• Project Indradhanush is a seven point reforms agenda for PSBs that will address problems impacting their governance, accountability, and capitalization. Under the project the government outlined the structure of seven members Bank Board Bureau that will oversee the appointments process at public sector banks and provide advisory services. It includes lateral entry of private sector officials in the PSBs to professionalize state-run lenders and improve their efficiency .these proposals may help PSBs effectively deal with the malaise of NPAs. But what was immediately required is the surgical response to bad loans may be by creating the 'bad banks' which holds stressed assets.
• Lastly the success of the plan depends on its relentless implementation otherwise it may turn to be another slew of measures conceptualized but not implemented in its word and spirit.

Answer : Under gold monetization scheme, people can deposit idle gold with authorized agencies and reap the benefits of gold price increase and also avail the interests on deposits. They can redeem it at the end of the tenure at the price prevailing then.The gold mobilize under it will be used in auctioning and replenishing RBI gold reserves and also it will be landed to the jewelers so it will help improving supplies in the market without increasing import of gold for meeting the reserve and domestic consumption requirement respectively, consequently reducing our balance of trade.

• Secondly it is proposed that banks will be permitted to deposit the mobilized gold as part of their CRR/SLR requirements with the RBI, thus it will increase money flow into the market as banks will be left with more money to lend. With this investments in the economy will automatically increase.

Answer : Both PDMA and CSF are the institutional solutions for the problem of debt management in India. Tarapore committee recommended establishment of CSF with the objective of addressing the irregularities in public debts repayments schedule and the consequent impact upon ballooning of gross borrowing and expenditure towards interest payments. FSLRC recommended PDMA and mandated it with the responsibility of minimizing the cost of rising and servicing public debt over the long term with an acceptable level of risks at all times. Both are directed towards achieving fiscal discipline. Both CSF and PDMAare mooted as debt management authorities independent of governments both center as well as state and the RBI.

• PDMA will have advisory council and a managing committee both of which having representative from RBI and government, consensus decision making is stressed by the commission. There is provision of complete independence to PDMA in matters pertaining to deciding its own staff, salary structure and outsource majority of its non-core activities. Another important feature is that it will have independent goals and objectives
• So we can conclude by saying that PDMA has similarities with CSF with underlying objective of both to be the debt management but it is also not a replica of CSF as it differs in its modus operandi and other features.

Answer : India has the fourth largest railway network in the world, despite this the state of Indian railways can be summarized as a rail without a speed and even at suchspeed prone to accidents due to lack of interagency coordination to prevent such failures. Even Shatabdis run at speeds that had already been achieved in pre-war Europe.

• The railway has not collapsed much as Air India because of non-competition and not as a result of its efficient functioning. Railways operations as well as state of its stations signal disastrous situation along with dismal performance in critical areas such as research and developments and manufacturing. On management and maintenance front it is facing issues such as working under the clutches of the government and often subjected to politically motivated decisions rather than rational and needy decisions one such example is that ofgovernment controlled tariffs, inadequate utilization of available resources, management entrusted with the responsibility of looking after running of schools, hospitals, real estate development etc., rather than concentratingsolely on its core business of running trains thus diverting the attention.
• The committee has sought to address most of these issues through its recommendations. One such recommendation is doing away with separate railways budget and placing railways under independent [of ministry] regulator. Another key recommendation is improvement in the internal resource generation and explore various methods of financing, no to railway privatization but allow private sector participation in the railway projects etc.
• Recommendations can be accepted but cannot be implemented in one go. Difficulty arises when running railways on commercial pattern as it is used by most of Indian population owing to its connectivity and low prices. Areas can be identified for privatization but before that there should be a clear cut policy with respect to handling of disputes arising out of privatization and involvement of multiple authorities. And last but not the least, Railways union and labor unions may oppose some of the reforms as a result to insecurity.

Answer : Majority of India's workforce still is dependent on agriculture sector directly or indirectly with industry and commerce dependent upon it as a source of raw materials and as a market for manufactured goods. Thus it may be argued that the developments of agricultural marketing systems are necessary.With the development of the economy buyers and sellers contact assumes new dimensions such as their number and types of exchanges expand. In such a scenario there is a concomitant need for increasingly specialized marketing services such as physical distribution, storage, grading, market information gathering etc.Being state subject agriculture and its marketing hitherto was regulated by the state governments by the establishment of APMC's. Although the objective of establishing APMC's was development of efficient marketing systems, promotion of agri-processing and agricultural exports, and ensuring infrastructure creation for the marketing of agricultural produce, but over a period of time these markets have become restrictive and monopolistic in character. Consequently there was no uniform policy with respect to agricultural marketing in India. Additionally, Farmers of one state were compelled to sell their produces in their respective state markets only which generally do not fetch adequate price for their produce and no diverse markets thus free market forces does not come into play leading to fractured price discovery mechanism.

• In our country agricultural marketing suffers from inefficiencies and infrastructural inadequacy. Needless curbs and controls, including movement restrictions, further constrain free and fair trade
• There is a positive contribution of agricultural and food marketing, towards attempt to improve rural incomes in developing countries. Rural based enterprises, including small holdings, can greatly improve their earning potential adopting a market orientation. They can be encouraged to add value to their commodities. Marketing operations lack transparency and are marked by high price volatility. The much needed market intelligence, especially price information, is not readily available to most farmers.
• Aggressive agricultural marketing policies are required to overcoming these deficiencies such as creation of unified national market and online platform for price discovery. Government online platform is a welcoming step in this direction.

Answer : DBT launched as a citizen empowerment tool with an objective to transfers benefits to the beneficiaries directly by removing the middlemen. It aimed at better targeting of subsidies and reducing delays in the delivery of benefits such as scholarships and pensions to the intended beneficiaries. It has also helped in curbing wastages and leakages savings crores of rupees of Indian exchequer, and result in financial inclusion.

• To introduce it in the state sponsored welfare programs would be cumbersome task without addressinglogistical, operational and technological challenges that still persists in most of the states especially BIMARU states. Beneficiaries of the state still do not have bank accounts mapped with Aadhar card. For availing the benefits of DBT at least 80% of the population of the each district within the state must have Aadhar card penetration which still is not the case, because Aadhar card is still not mandatory.Another point is that majority of the Indian population still lives in rural areas inclusion tribal areas without banking facility and infrastructural connectivity. Further, banks appointed banking correspondent agents may end up opening multiple accounts of the same beneficiary for earning incentives and may exploit them as well e.g. not disclosing balances, asking for commission, not giving passbooks etc. In state programmes, apart from cash component to be given to the beneficiaries, benefits in-kind component is also there which cannot be delivered directly without middlemen, such as in various nutritional programmes. So DBT does not work there.
• So it is a recognized and appreciated fact that DBT has stopped leakages but replicating it for state welfare programmes may not be bear fruits without addressing the above mentioned challenges.

Answer : The process of financial inclusion in the country started with the nationalization of banks in the year 1969 then RRB's were introduced with the objective of banking the rural population. Payments bank is another institutional initiative mooted by the apex bank for promoting financial inclusion. It is for the first time in the history of India's banking history that RBI has given differentiated licenses to take banks to the unbanked. Payments banks are mandated to provide banking services such as savings accounts and remittances to the hitherto unbanked sections such as migrant labourers, low income households and small businesses that too economically i.e. at low transaction costs. It is a sustainable model of banking for the unbanked as it was economically not viable for the banking banks to open branches in every village but the mobile platforms are doing the same job now.

• The model is empirically tested in other developing countries, such as Kenya wherein Vodafone’s ‘M-Pesa’ is used by around 70% of the adult population. This step signifies how policymakers are realizing banking inclusion as a core sector within banking sector, consequently making concerted efforts for the promotion of this sector by transforming citizens’ mobile phone into a stripped-down bank branch for a greater chance of success.
• So, while this is a bold move, and underscores that the RBI is anything but conservative, it is ironical too that the cycle of experiments that started with the 1969 round of nationalization has now come full circle. The responsibility of financial inclusion is now almost entirely entrusted to the private sector.

Answer : Era of hyper growth of Chinese economy seems to have reached its climax. Chinese economy is grappling with the problem of over capacity which is not supported by domestic consumption and global turmoil is also not supporting its exports. It follows command economy where state directs investments and thus lacks free-play of market forces. Now Chinese economy is nearing its saturation as its markets are essentially driven by replacement with fewer first time buyers. Saturation has turned Chinese markets into a battlefield of corporate wars i.e. pricing and innovation war, margin pressures thus profit declines. Another factor indicating its saturation is that in Chinese economy investments are extraordinarily high relative to other parts of GDP viz. investments, consumptions, and net exports. In addition to this ageing population, labor market volatility, and economic crisis are additional indicators for Chinese economic saturation.

• Indian economy is projected to be the fastest amongst the emerging economies and is expected to surpass Chinese economy. India follows a mixed economic model with freedom as the underlying principle of the economy that allows investors to invest at their choice. The political stability that came up with the new dispensation that is aggressively pitching for "make in India" to increase manufacturing sectors share in the GDP along with India's structural benefits accruing of these three D's i.e. democracy, demography and demand are positively indicating towards Indiato become economic leader.
• Transition from red tapism to red carpet to improve ease of doing business to attract investments as announced by our PM on several occasions, labor market reforms with introducing skill India mission and the vibrant private sector economy that keeps intact private demand are some such factors that support India's bid to become economic leader. Another key factor driving economic growth is population that is favorable for India because it is expected to become world’s largest in terms of population and also the youngest.
• On account of combining the advantage of free dynamic society with strong population growth coupled with aggressive economic policies of the government, the economic case of India becomes compelling.

Answer : The Twin objective of agricultural price policy were (1) to guarantee remunerative prices to farmers to induce them to adopt high-yielding varieties and apply modern agricultural inputs and (2) to provide food grains at affordable prices to the poor.

• Doha Round of WTO: The Doha Round of trade negotiations aim is to achieve major reform of the international trading system through the introduction of lower trade barriers and revised trade rules.
• Agriculture: More market access, eliminating export subsidies, reducing distorting domestic support, sorting out a range of developing country issues, and dealing with non-trade concerns such as food security and rural development.
• Non-agricultural market access (NAMA): To reduce or as appropriate eliminate tariffs, including the reduction or elimination of high tariffs, tariff peaks and tariff escalation (higher tariffs protecting processing, lower tariffs on raw materials) as well as non-tariff barriers, in particular on products of export interest to developing countries.
• Services: To improve market access and to strengthen the rules. Each government has the right to decide which sectors it wants to open to foreign companies and to what extent, including any restrictions on foreign ownership. Unlike in agriculture and NAMA, the services negotiations are not based on a “modalities” text.
• Trade facilitation: To ease customs procedures and to facilitate the movement, release and clearance of goods. This is an important addition to the overall negotiation since it would cut bureaucracy and corruption in customs procedures and would speed up trade and make it cheaper.
• India’s stand on WTO Doha round of negotiations: India needed a permanent solution on food security with necessary changes in World Trade Organisation (WTO) rules. The crux of India’s objections is the WTO limits on agriculture subsidies at 10 per cent of the total value of food grain production and on stockpiling food grains. Complying with the Food Security Act passed last year that guarantees subsidised food grains to about 70 percent of the nation's population could result in breaching these limits leading to penalties for India.

Answer : Cultural tourism is an instrument for economic development that achieves economic growth by attracting visitors outside the community-host. These visitors are motivated generally or partially by an interest in the historical, artistic, scientific or related to lifestyle and traditions reality and facts of a community, region, group or institution. Cultural-cognitive tourism is an interaction between cultural, ethnic and historical components of the society or of the place that is used as resources to attract tourists and tourism development.

The World Tourism Organization defines Cultural tourism as the trips, whose main or concomitant goal is visiting the sites and events whose cultural and historical value has turn them being a part of the cultural heritage of a community.

Following are the characteristics of responsible cultural tourism:

• It minimises negative economic, environmental, and social impacts;
• It generates greater economic benefits for local people and enhances the well-being of host communities, improves working conditions and access to the industry;
• It makes positive contributions to the conservation of natural and cultural heritage, to the maintenance of the world's diversity;
• It provides more enjoyable experiences for tourists through more meaningful connections with local people, and a greater understanding of local cultural, social and environmental issues;
• It is culturally sensitive, engenders respect between tourists and hosts, and builds local pride and confidence.

Answer : The Cartagena Protocol on Biosafety is an international agreement on biosafety, as a supplement to the Convention on Biological Diversity. The Biosafety Protocol seeks to protect biological diversity from the potential risks posed by genetically modified organisms resulting from modern biotechnology.

• The Biosafety Protocol makes clear that products from new technologies must be based on the precautionary principle and allow developing nations to balance public health against economic benefits. It allows countries to ban imports of genetically modified organisms if they feel there is not enough scientific evidence that the product is safe and requires exporters to label shipments containing genetically altered commodities such as corn or cotton.
• The required number of 50 instruments of ratification/accession/approval/acceptance by countries was reached in May 2003. In accordance with the provisions of its Article 37, the Protocol entered into force on 11 September 2003. The Protocol has 168 parties, which includes 166 United Nations member states, Niue, and the European Union.

Responsibilities of the member nations

• In accordance with the precautionary approach, contained in Principle 15 of the Rio Declaration on Environment and Development, the responsibilities of the member nations of the Protocol is to contribute to ensuring an adequate level of protection in the field of the safe transfer, handling and use of ‘living modified organisms resulting from modern biotechnology’ that may have adverse effects on the conservation and sustainable use of biological diversity, taking also into account risks to human health, and specifically focusing on trans-boundary movements.
• The governing body of the Protocol is called the Conference of the Parties to the Convention serving as the meeting of the Parties to the Protocol (also the COP-MOP). The main function of this body is to review the implementation of the Protocol and make decisions necessary to promote its effective operation. Decisions under the Protocol can only be taken by Parties to the Protocol. Parties to the Convention that are not Parties to the Protocol may only participate as observers in the proceedings of meetings of the COP-MOP.
• The Protocol addresses the obligations of Parties in relation to the trans-boundary movements of LMOs to and from non-Parties to the Protocol. The trans-boundary movements between Parties and non-Parties must be carried out in a manner that is consistent with the objective of the Protocol. Parties are required to encourage non-Parties to adhere to the Protocol and to contribute information to the Biosafety Clearing-House.

Answer : A noticeable trend in recent years has been the structural transformation of the Indian agri-system that comprises of input dealers to farmers to aggregators, wholesalers, processors and retailers. In the traditional network, most of these players operate in an uncoordinated manner giving rise to costs of fragmented operations. The transformation basically marks a shift toward organized market structure guided by economies of scale, which has started to unfurl over the last few years and have a long way to go. As mentioned earlier, the next revolution in Indian agriculture is likely to be led by the private sector and this is reflected in the emerging role of the private players in the organized processing and retailing sector. During the last five years, organized food and grocery retail sector has been growing at a phenomenal pace.The top 10 Indian food and grocery retailers, for example, have grown at an average annual rate of more than 70% per annum during 2002-07, albeit started from a low base. This trend is likely to continue for the next 10-15 years not to rule out some bumpy ride during 2008- 2010. The organized food processing industry has been growing very fast; nearly 13.7% in 2008 compared to 7% in 2004 and is poised to grow at 20% by 2015. The structural shift is quite evident from the fact that the organized food processing sector contributes about 81% of the gross output of the industry.

Measures for improvement:

• As the forward linkage is gaining roots, the need to establish strong backward linkage is being felt. There is a vacuum of quality input services in the rural areas and this is a sector that many of the retailers, processors, and also third party service providers are venturing into. The rural market for services such as supply of quality seed, pesticides, technological knowhow, and extension services is ever expanding and this provides a large business opportunity for the private players. Also, a strong backward linkage can also motivate farmers to enter into buyback arrangements with the retailers and processors. It has a potential to create a win-win situation wherein the farmers benefit from assured markets and the firm can monitor the supply chain. Private players like ITC (Choupal Saagar), DSCL (Hariyali Kisaan Bazaar), Tata (Kisan Sansar), and Future group (Aadhaar) are some of the key players operating in this segment of the agri-system, what is popularized as rural business hubs (RBHs). The origin of this model lies in the Public Private Panchayat Partnership (PPPP) model led by Confederation of Indian Industries (CII) and the Ministry of Panchayati Raj which aimed to develop villages into business hubs. Some of these RBHs are similar to rural malls which offer not only agri-inputs and services but also consumer goods, household items, grocery, food courts, fuel stations and also medical services.However the challenge lies in competing with the existing traditional network, scaling up these operations and reaching out beyond the hinterlands.

Answer : One should not jump to the conclusion that a treatment for inequality—redistribution—may be worse for growth than the disease itself. First, we need to ask if equality-enhancing interventions would invariably lead to a loss of economic efficiency. On reflection, that is too broad-brush a conclusion: we are all familiar with win-win policies that have potential both to promote efficiency and equality. Examples could include taxes on activities with negative externalities paid mostly by the better-off but harmful to the poor (such as, perhaps, excessive risk-taking in the financial sector), cash transfers aimed at encouraging better attendance at primary schools in developing countries, or spending on public capital or education that benefits the poor.

• A number of factors point out that some categories of government spending, for example, public investments in infrastructure, spending on health and education, and social insurance provision may lead to socio-economic development. The macroeconomic effects of redistributive policies are likely to reflect a balance between different components of the fiscal package, and more broadly, redistribution can also occur when progressive taxes finance public investment, when social insurance spending enhances the welfare of the poor and risk taking, or when higher health and education spending benefits the poor, helping to offset labor and capital market imperfections. In such cases, redistributive policies could increase both equality and growth.

Answer : Net Neutrality is the Internet's guiding principle: It preserves our right to communicate freely online. Net Neutrality means an Internet that enables and protects free speech. It means that Internet service providers should provide us with open networks - and should not block or discriminate against any applications or content that ride over those networks.

Net Neutrality in India: Till now there are no laws governing net neutrality in India, which would require that all Internet users be treated equally, without discriminating or charging differentially by user, content, site, platform, application, type of attached equipment, or mode of communication. There have already been a few violations of net neutrality principles by some Indian service providers. The government has once again called in for comments and suggestions regarding net neutrality.

• The debate on network neutrality in India gathered public attention after Airtel, a mobile telephony service provider in India, announced in December 2014 additional charges for making voice calls (VoIP) from its network using apps like WhatsApp, Skype, etc.
• In March 2015, Telecom Regulatory Authority of India (TRAI) released a formal consultation paper on Regulatory Framework for Over-the-top (OTT) services and net neutrality seeking comments from the public. The consultation paper was criticized for being one sided and having confusing statements. It received condemnation from various politicians and Indian Internet users.

Answer : Some studies indicate that economic push factors (for example lack of rural credit, unemployment, lack of land, general rural poverty) are most important while others suggest that economic pull factors (e.g. perception of high wages from urban employment) are predominant. A number of other motivations for rural-urban migration including educational opportunities offered in urban areas, marriage and joining the family already at the destination are cited in the literature. Also, a few studies suggest that rural-urban migration is facilitated by the concentration of migrants of same origin in the destination city.

Three categories of factors are perceived as important reasons for rural-urban migration. The first set is related to the need for education and acquisition of skills in various vocations. The second set relate to the absence of desirable job opportunities in rural areas. These include the absence of employment, absence of industries and companies and boredom in agriculture. The third set of factors is social, such as inadequate amenities and expulsion from rural areas due to an offence or crime committed by the migrant. The first two sets of factors are common in rural-urban migration literature as factors responsible for the movement of migrants. Of the social factors are, however, only inadequate social amenities has a fair mention in the literature.

Role of Rurban mission in mitigating the challenges posed by this migration

• The ambitious Rurban mission is expected to help reduce migration from rural to urban areas with modern infrastructure being created in villages, as the present high rate of migration was creating heavy pressure on the civic infrastructure in India’s cities. Government is committed to providing good amenities, jobs and infrastructure in rural areas on a priority basis. By providing basic facilities to all the stakeholders in the rural areas, the problem of migration could be tackled effectively. This scheme has been modelled on the existing Provision of Urban Amenities to Rural Areas (PURA) strategy. In the first phase, Rs 100 crore will be spent on the scheme in three identified projects in Warangal district of Andhra Pradesh and Sangli and Buldhana districts of Maharashtra.

Answer : Providing access to financial services to low-income households and small businesses is not a new goal for India. Policy makers are also well aware of its importance and have been very willing to learn from the successful experiences of other countries and to experiment with new ideas. However, the record of progress on this front has left a great deal to be desired. On both Financial Inclusion (defined as the spread of financial institutions and financial services across the country) and Financial Depth (defined as the percentage of credit to GDP at various levels of the economy) the overall situation remains very poor and, on a regional and sectoral basis, very uneven.

• An estimate suggests that close to 90 per cent of small businesses have no links with formal financial institutions and 60 per cent of the rural and urban population do not even have a functional bank account. And, while the bank credit to GDP ratio in the country as a whole is a modest 70 per cent. Given this important background, this Report overall makes a conscious effort to redress this imbalance and issues of risks and costs have been kept at the very centre of the discussions of each of the strategies for providing better access to financial services to small businesses and low-income households.

With this perspective in view and in accordance with the Terms of Reference given to it, in its deliberations, the Committee focused its attention on:

1. Framing a clear and detailed vision for financial inclusion and financial deepening in India.
2. Articulating a set of design principles that will guide the development of institutional frameworks and regulation for achieving financial inclusion and financial deepening, including approaches to prudential regulation, consumer protection, and systemic risk management for institutions involved in financial inclusion and deepening, so that the eventual design: (a) provides a complete suite of suitable financial services to each and every small business and low-income household in a flexible, convenient, reliable, and continuous manner; (b) is highly cost effective; (c) ensures a high degree of customer protection, and enhancement of financial wellbeing; and (d) enhances systemic stability.
3. In the light of the detailed vision and the design principles, carefully reviewing each existing channel and suggesting how its performance may be improved based on both domestic and global experiences.
4. Where necessary, recommending new ideas for consideration by the RBI and other policy makers, in order to address specific barriers to progress and to encourage participants to work swiftly towards the full achievement of the vision in a manner that is consistent with the design principles.
5. Developing a comprehensive monitoring framework to track the progress of the financial inclusion and deepening efforts on a nationwide basis.

Answer : Consisting of all unincorporated private enterprises owned by individuals or households engaged in the sale or production of goods and services operated on a proprietary or partnership basis and with less than ten total workers.

Characteristic features of this sector are

• Ease of entry,
• Smaller scale of operation,
• Local ownership,
• Uncertain legal status,
• Labour-intensive
• Operating using lower technology based methods,
• Flexible pricing,
• Less sophisticated packing,
• Absence of a brand name,
• Unavailability of good storage facilities and an effective distribution network,
• Inadequate access to government schemes, finance and government aid,
• Lower entry barriers for employees,
• A higher proportion of migrants with a lower rate of compensation

Challenges faced by Workers of Unorganized sector

• Lower job security and poorer chances of growth,
• No leaves and paid holidays,
• Lower protection against employers indulging in unfair or illegal practices
• Working Environment
• Caste and Class Difference
• Low wage rate
• Indebtedness
• Bonded labor (Dadan)

Answer : Livestock sector includes animal Husbandry, dairy and fisheries sector, etc.

• It also plays important role in the rural economy as supplementing family incomes and generating gainful employment in the rural sector.
• India's livestock sector is one of the largest in the world. It has 56.7% of world's buffaloes, 12.5% cattle, 20.4% small ruminants, 2.4% camel, 1.4% equine, 1.5% pigs and 3.1% poultry. In 2010-11 livestock generated outputs worth Rs. 2075 billion (at 2004-05 prices) which comprised 4% of the GDP and 26% of the agricultural GDP. The total output worth was higher than the value of food grains
• Despite significant increases in livestock production, per capita consumption of milk (69 kg) and meat (3.7 kg) in 2007 has been much lower against corresponding world averages of 85 and 40 kg
• Livestock sector grew at an annual rate of 5.3% during 1980s, 3.9% during 1990s and 3.6% during 2000s. Despite deceleration, growth in livestock sector remained about 1.5 times larger than in the crop sector which implies its critical role in cushioning agricultural growth.
• Livestock sector did not receive the policy and financial attention it deserved. The sector received only about 12% of the total public expenditure on agriculture and allied sectors, which is disproportionately lesser than its contribution to agricultural GDP.
• In India distribution of livestock is more equitable than that of land. It is evident from the data that in 2003 marginal farm households (=1.0hhectareofland)whocomprised 48% of the ruralhouse-holds controlled more than half of country's cattle and buffalo and two-thirds of small animals and poultry as against 24% ofland.
• Similarly, animal husbandry promotes gender equity as more than 3/4.
• The labour demand in livestock production is met by women across the India. The share of women employment in livestock sector is around 90% in Punjab and Haryana as well as other states where dairying is a prominent activity and animals are stall-fed.

Answer : Tax Avoidance is the willfully not paying tax by using legal loopholes. Tax evasion is the illegal evasion of taxes by individuals, corporations, and trusts. Tax evasion often entails taxpayers deliberately misrepresenting the true state of their affairs to the tax authorities to reduce their tax liability and includes dishonest tax reporting, such as declaring less income, profits or gains than the amounts actually earned, or overstating deductions. Tax avoidance is legal but causes loss to the exchequer.

India has comprehensive Double Taxation Avoidance Agreements (DTAA) with 88 (signed 88 DTAAs out of which 85 have entered into force) countries. This means that there are agreed rates of tax and jurisdiction on specified types of income arising in a country to a tax resident of another country. Under the Income Tax Act 1961 of India, there are two provisions, Section 90 and Section 91, which provide specific relief to taxpayers to save them from double taxation. Section 90 is for taxpayers who have paid the tax to a country with which India has signed DTAA, while Section 91 provides relief to tax payers who have paid tax to a country with which India has not signed a DTAA. Thus, India gives relief to both kinds of taxpayers.

A large number of foreign institutional investors who trade on the Indian stock markets operate from Singapore and the second being Mauritius. According to the tax treaty between India and Mauritius, capital gains arising from the sale of shares are taxable in the country of residence of the shareholder and not in the country of residence of the company whose shares have been sold. Therefore, a company resident in Mauritius selling shares of an Indian company will not pay tax in India. Since there is no capital gains tax in Mauritius, the gain will escape tax altogether.

Way to avoid tax evasion:

• Reducing tax rates
• Make more simplified laws and system
• Design a well organised tax administration
• Strengthen the anti-corruption policy
• Design a permanent tax structure
• Make penalty provision more stronger
• Give relief provisions to huge tax payers

Answer : From a highly centralised planning system, the Indian economy was gradually moving towards indicative planning where role of Planning Commission was to concern itself with the building of a long term strategic vision of the future and decide on national priorities. It has to work out sectoral targets and provide promotional stimulus to the economy to grow in a desired direction.

• The Planning Commission has played an integrative role in the development of a holistic approach to the policy formulation in critical areas of human and economic development. In the social sector, schemes which require co-ordination and synthesis like rural health, drinking water, rural energy needs, literacy and environment protection have yet to be subjected to coordinated policy formulation.
• In fixing priorities, the Planning Commission examines projects and programmes in the perspective of economy as a whole. With the emergence of severe constraints on available budgetary resources, the resource allocation system between the States and Ministries of the Central Government is under strain. This requires the Planning Commission to play a mediatory and facilitating role, keeping in view the best interest of all concerned.
• The way in which the Planning Commission works (as, effectively, a second Cabinet) means that policy making is hugely conflicted in India. The Cabinet accountability for policy is over-ridden by this side-organisation which "binds" the hands of Ministers and prevents them from being held to account for policy failures.

Answer : India’s road network is under intense pressure today due to increase in population, explosive growth in the number of private vehicles which has increased the number of personalised vehicles, partly due to the absence of an efficient and reliable public transport system. There are limitations on the road space that can be provided within the existing built up environment. Thus for sustainability in urbanisation it is required that our regional space is reorganised to upgrade towns and cities to integrate them with larger cities.

• Sustainable urbanization can be brought by the creation of inter connected clusters with rapid and last mile connectivity to transit-road, rail, highways, along with improving existing infrastructure and basic amenities and ensuring will organized public transport facility. Such enhanced connectivity opens up opportunity for growth across wider inter connected region with benefit of taking pressure of concentration of population of larger cities to absorb additional rising population. Thus ensures regional development along with more balanced and sustainable development.
• High speed rails like metros, monorails, multi-lining of highways, efficient public transport system like CNG fuel led buses are central to this idea. Apart from the transit systems more infrastructural connectivity through integrated land development, market hubs, and economic spaces needs to be focused upon. These strong inter linkages will lead to sustainable and balanced urbanisation which is essential for our long term growth. Missions such as JNNURM, Smart cities, High speed transit systems should be incorporated in greater numbers to achieve the same.

Answer : India is endowed with significant mineral resources. India produces 89 minerals out of which 4 are fuel minerals, 11 metallic, and 52 non-metallic and 22 minor minerals. In India, 80% of mining is in coal and the balance 20% is in various metals and other raw materials such as gold, copper, iron, lead, bauxite, zinc and uranium.

Mining is at the beginning of the value chain and has a capacity to kick start economic development that few other businesses offer. They create opportunities for local suppliers of goods and services. They bring with them technology and skills which can be transferred to other sectors of the economy. They open a window onto the operation of world markets.And they have a demonstration effect in relation to how modern businesses can be run, both with regard to operating practice and best practice for health and safety. It does not require a sophisticated supply chain in the country in which it takes place, as manufacturing so often does, and it does not require developed local markets.

Environmental impacts of mining and mineral processing includes:

• Surface water pollution: Soluble contaminants in domestic or agricultural use waters from release of mine and processing water or leakage from waste deposits, deposition of solids on agricultural land and in shallow sea zones, withdrawal of water for industrial purposes, alteration of aquatic flora and fauna, including destruction of fish species and accumulation of toxic elements in fish and sand deposition in river channels and shallow sea zones.
• Underground water pollution: Soluble contaminants in wells, springs etc. resulting from leakage from waste heaps and mine water and Natural water sources drying up as a consequence of water table lowering.
• Air pollution: Dust blown on inhabited, agricultural lands, accumulation in plants of toxic elements carried by dust, acidification of water bodies and soil resulting from SO emissions and damage to buildings from SO emissions
• Solid waste: Hazards related to lack of stability of waste deposits, land disturbance and withdrawal of agricultural land.
• Excavation:Loss of fauna and flora habitats, Land subsidence due to underground mining

Socio-cultural impacts of mining and mineral processing includes:

• In addition of environmental impact, large-scale impacts occur from indirect effects such as displacement of people, colonization, poverty, unemployment, etc. But mineral development does not always boost a country’s economic growth and may in some cases, contribute to increase poverty. This is due to the presence of low level of employment in the sector, use of mostly imported technology, high market volatility of minerals, institutional corruption and mismanagement.
• Even when mineral development results in national economic growth, the benefits are not always equitably shared and local communities closest to the source of mineral development suffers the most. In some cases, mining has provided jobs to the rural youths which in turn trigger indirect negative social impacts due to rise in the wages. The other major issue related to mining is displacement of people. As in the case of India, the main concentration of mineral wealth happens to fall in the ecologically thick, tribal inhabited areas of south, central and northeastern India. The displacement of people due to mining has only multiplied the exploitation and degradation of women’s rights with regard to land and livelihoods.
• Women displaced by mining, have lost the rights to cultivate their traditional crops, and forests being cut down for mining, they are unable to collect forest produce for consumption (food, fodder, medicines or ceremonial needs) or for sale. The cash flow that tribal and rural women have access to, by sale of forest produce and by breeding livestock, has disappeared. Thus the side effects of mining on socio- environment are tremendous.

Answer : Infrastructure development is defined as the basic physical and organizational structure required for the functioning of a community or enterprise, or the services and facilities required for an economy to function. It can also be defined as the set of interconnected elements that provide framework and thus supporting the entire structure of development. It is an important term for judging a country or region’s development. It facilitates the production of goods and services, and also ensures the distribution of finished products to the market.

Issues related to corruption/others related to infrastructure development and means to resolve them can be summed up as follows:

• The first wave of investment in infrastructure and natural resources, which began in 2002, has run into numerous problems, reflecting inter alia the complexities of PPP contracting and the limited capacity in the system. Allegations of corruption, and interventions by investigating authorities and courts, have interrupted many projects and adversely affected firms. Problems of land acquisition and environmental regulation have led to stalled projects. The weakness in integrated planning has led to difficulties such as ports that lack railway lines or power plants that lack coal supplies.
• The role of government in infrastructure should be usefully divided into planning, contracting, and regulating. Planning is the decision to build an element of infrastructure. This inevitably requires inter-relationships between multiple elements: e.g. where there is a port, there will be a requirement for railway lines and roads. Contracting is the task of giving out the contract to a private producer for building an element of infrastructure. Once an asset is working, the question of regulating arises, as there is the market failure arising from monopoly power.
• There is a legitimate role for political considerations in the planning process. As an example, political authorities may decide that it is important to build transportation infrastructure in backward states, or in states with greater law and order problems, even when their economic viability is lower.
• Once an asset is working, there is need for an arms-length independent regulator. Integral to a level playing field, in the eyes of the regulator, is the corporatization of government infrastructure assets, so that the regulator sees a landscape with multiple firms and can treat them in an ownership-neutral way.
• Further, it may be useful to decompose the risks of an infrastructure project into the early stage and the steady state. The early stage risk is political risk, construction risk, regulatory risk, and the traffic risk of the first year of tolling. These are substantial risks.
• Recent Initiatives: To resolve the issue related to infrastructure development, a Harmonized Master list of Infrastructure Sub-sectors has been drawn up and published in the Gazette of India in October 2013. An institutional mechanism has been set up under the chairmanship of the Secretary, Department of Economic Affairs, with representation from the Planning Commission, Department of Revenue, Reserve Bank of India (RBI), Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA), Pension Fund Regulatory and Development Authority (PFRDA), and concerned ministry for updating the master list and revisiting the sub-sectors outside the master list on the basis of well-defined principles.

Answer : Definition: Mobilization of resources denotes the process that achieves a defined mission through the mobilization of knowledge for human use of skills, equipment and services etc. It also involves seeking new sources as well as correct and maximum use of the available resources.

A resource mobilization strategy involves the following steps:

• Assessment of the current situation.
• Identifying requires resources.
• Comparing what is needed and what is available to determine the gaps.
• Quality best strategies for approaching various stakeholders.
• Documentation of all the activities.

In this context, some of the initiatives taken by the government are as follows:

• On the resources side, the Union budget 2014-15 proposes to finance the incremental spending in the current fiscal from the additional receipts targeted to come mainly from higher Non-Tax revenue.
• The budget projects total receipts of Rs. 2012 lakh crore from Non Tax Revenue while the figure for this head projected in the figure for lead projected in the interim budget was Rs. 1.8 lakh crore. This is because the new government expects higher amounts to accrue from ‘Dividends and Profits which includes Dividends from PSU, RBI as well as Non-tax revenue from Economic Services (such as communication, services, roads, power, petroleum etc.)
• The government also projects to raise Rs. 58,425 crore by way of diversity PSUs.
• In addition to this, putting in place a stable and predictable tax regime to spur growth and ensure and investor friendly environment has been termed as our of the top priorities.

Answer : India’s livestock sector is one of the largest in the world. It has 56.7% of world’s buffaloes, 12.5% cattle, 20.4% small ruminants, 2.4% camel, 1.4% equine, 1.5% pigs and 3.1% poultry. According to the recently available data, livestock generated outputs worth Rs. 2075 billion (at 2004-05 prices) which comprised 4% of the GDP and 26% of the agricultural GDP. The total output worth was higher than the value of food grains. Livestock sector is expected to emerge as an engine of agricultural growth in the 12th plan and beyond in view of rapid growth in demand for animal food products. Achieving growth rate of 5-6%, however, would require addressing challenges of shortage of feed and fodder and frequent occurrence of some deadly diseases. The sector has remained under-invested; and neglected by the financial and extension institutions. Livestock markets are under-developed, which is a significant barrier to the commercialization of livestock production. Besides, the sector will also come under significant pressure of increasing globalization of agri-food markets.

Some of the major challenges in the growth of allied sector are as follows:

• Livestock sector receives only about 12% of the total public expenditure on agriculture and allied sectors and about 4-5% of the total institutional credit flowing to agriculture and allied sectors. Only 6% of the animal heads (excluding poultry) are provided insurance cover. Livestock extension remains grossly neglected. Only about 5% of the farm households in India do access information on livestock. Organized slaughtering facilities are too inadequate.
• Lack of access to organized markets and meager profits distract farmers from investing into improved technologies and quality inputs. Informal market intermediaries often exploit the producers.
• Shrinking and degrading pastures coupled with limitations of fodder, lack of sufficient veterinary care and apathy to assisted reproductive technologies have been the major constraints. The potential of raising Pashmina goats’ viz. Changthangi in Ladakh and Chegu in Himachal Pradesh remains under exploited. Interventions by the DAHD&F have hardly addressed any of the above issues.
• Sufficient facility/setup for disease diagnosis, reporting, epidemiology, surveillance and forecasting are not on board. Several diagnostic kits required for disease surveillance and monitoring are imported at a huge cost. The limited diagnostics available in the country are produced by few laboratories and are not of desired quality.
• Bulk of the investment for livestock development comes from the state governments. The central government contributes about 10% to the total investment. There is hardly any private sector investment in animal husbandry. The dairy sector, however, has attracted considerable private investment in processing, value addition and marketing. Flow of institutional credit, mainly the commercial banks is about 10%. More than 70% of the refinance disbursement by NABARD goes for dairy development. Investment linked tax incentives and attractive credit facility to private investors are missing.
• Suggestive measures: For achieving targeted growth rate of 5-6 % in milk production, provision should be made for production of required good quality semen from high genetic sources. To achieve that, the existing semen stations should be strengthened and upgraded to category ‘A’, and /or new semen stations established to ensure availability of minimum 150 million doses of quality semen to cover 40% breedable cows and buffaloes and 70% AI delivery at farmers’ doorstep. Larger focus should on field progeny testing for quality bull production. Both NPCBB and NDP should be implemented in tandem.
• For increasing growth rate from present 2% to 3% in rural poultry, a rural poultry mission project with focus on providing low input birds should be initiated.
• The existing Immunization programs for deadly diseases should be the national commitment with 100% central funding. A comprehensive national network of diagnostic laboratories should be established. The vaccine and diagnostic production should be privatized with suitable incentives.
• The share of animal husbandry in agricultural credit should be increased at least to 10% and interest rate on animal husbandry credit should be at par with crop loan. The facility of the Kisan credit cards should be extended to all livestock farmers. Livestock insurance coverage should be expanded to all types of production systems and species with appropriate incentive framework.

Answer : Human resource management refers to the policies and practices one needs to carry out the people or human resource aspects of management position including recruiting, screening, training, rewarding and appraising, in other words Human resource management is a process concerned with the management of human energies and competencies for achieving organizational goals through acquisition, development, utilization and maintenance of a competent and committed workforce in a changing environment.

Critical analysis of the initiatives of the government for Human Resource Management in the light of reinvigorated National Skill Development Programme: In March 2009, the government announced a National Policy on Skill Development laying down the framework within which it wanted skills-related training to be conducted. The policy clarified the roles that different stakeholders – government, industry, trade unions and civil society – would need to play for the creation of a skills ecosystem in India. It came with a mandate to skill 150 million people by 2022 in 20 high growth sectors and unorganized sectors identified by the government and the informal segment through a three-pronged approach revolving around creating, funding and enabling sustainable skills training initiatives in the private space.

• However, despite these initiatives and commitments, still there are number of challenges and shortcomings in the Human Resource Management and skill development which could be summed up as below:
• Building true market place competencies rather than mere qualifications.
• Creating effective linkages between school education and skill development;
• Providing mobility between education and training, different learning pathways to higher levels, and establishing a national qualifications framework;
• Providing opportunities for life-long learning for skill development;
• Promoting greater and active involvement of social partners and forging a strong, symbiotic, PPP in skill development;
• Establishing institutional arrangements for planning, quality assurance, and involvement of stakeholders and coordination of skill development across the country;
• Governance of a skill development system that promotes initiative, excellence, innovation, autonomy, and participation, while ensuring that the legitimate interests of all beneficiaries are protected;
• Strengthening the physical and intellectual resources available to the skill development system;
• Mobilizing adequate investments for financing skill development sustainably.

Vocational Training as a part of School Curriculum: Since vocational training is a subject on the concurrent list, the Central and state governments should share the responsibilities. Both of them should join hands for formulating policies, laying down standards, curriculum development, trade testing, and certification at the school level. At the state-level, the state government departments are responsible for vocational training programmes. Skill development can become a sustainable business, with the potential to become the largest social enterprise sector, and should not be viewed from the prism of aid/ charity/corporate social responsibility initiatives. It is a national priority and needs a coordinated approach by combining separate areas of government action on workforce participation, social inclusion and innovation so that policies on skills can connect with the wider economic, employment and social strategies.

Answer : India’s services sector that remained resilient even during and immediately after the global financial crisis buckled under the pressure of continued global and domestic slowdown, resulting in sub-normal growth in the last two years. However, early shoots of revival are visible in 2014-15 with signs of improvement in world GDP growth and trade also reflected in pick-up in some key services like IT, aviation, transport logistics, and retail trading. Different indices and estimates also indicate an expansion in India’s services business.

• The services sector with an around 57 per cent contribution to the gross domestic product (GDP), has made rapid strides in the last few years and emerged as the largest and fastest-growing sector of the economy. Besides being the dominant sector in India’s GDP, it has also contributed substantially to foreign investment flows, exports, and employment.
• India’s services sector covers a wide variety of activities that have different features and dimensions. Some services like IT and telecommunications are very sophisticated, involving high technology and expertise, while some are simple like those of barbers and plumbers. Some services like transport have high linkages with the industrial sector and some like tourism have high employment linkages. Some services like railways and port fall under the definition of infrastructure, while some like construction fall under the definition of industry. Thus there are many borderline inclusions and exclusions.
• Employment in the Services Sector: There has been a lot of debate on employment generating capacity of services sector. It has been argued that employment growth in services sector has not been commensurate to the income growth in the sector or the rise in its share in India’s GDP. The change in the production structure from agriculture to services has not been reflected by a proportionate change in the occupational structure. As a result, services-led growth has been a jobless growth.
• In terms of size of total employment (both organised and unorganised), in 1993-94, close to 63% of the population was engaged in agriculture sector and around 21% in services. Over the years, the percentage of people employed in agriculture has declined and employment in services has increased, though the broad pattern of employment has remained the same with agriculture having the highest share. There has been a change in the pattern of employment within the services sector. Wholesale and retail trade account for a substantial part of services sector employment and its share is rising. The share of transport, storage and communication is also increasing. However, the share of public administration and defence has declined.
• The pattern of the sectoral share of employment has changed over the last two decades with the share of agriculture falling from 64.8 per cent in 1993-94 to 48.9 per cent in 2011-12 and of industry rising from 15.6 per cent to 24.3 per cent. The share of the services sector in employment has gone up in the same period from 19.7 per cent to 26.8 per cent.
• Trade, hotels and restaurants is the only sector where the share of public sector is less than the private sector employment. There are state-wise variations in employment in services. Delhi and Kerala have the highest share in organised sector employment. These states also have one of the highest shares of services in the GDP.
• Overall, services sector employment in India is low compared to its share in GDP, but it is growing. Services sector has the largest share of employment within the total organised sector employment, but within services, share of organised sector employment is small. Within the organised services sector, public sector dominates the employment in services and thus private sector has not been very successful in creating organised services sector employment.

Answer : Impacts of Industrial reforms in Indian industries

• First, a number of changes in industrial, foreign investment, foreign technology agreements, the MRTP Act, etc. have done away with the prior clearance of government. In such cases, project time and, therefore, project cost will be reduced. This will free material and human resources for more productive uses: from cultivating contacts with persons with power and influence to get such clearances. Thus, the input cost per unit of output in the proposals which are freed from prior clearance requirements will go down.
• Second, the changes in respect of foreign investment, foreign technology agreements and rupee convertibility are designed to attract capital, technology, and marketing and managerial experience and expertise from abroad. These measures, together with reduction in import duties, will give a boost to exports in particular. They will lead to additions of scarce resources of technology and capital from abroad. In as much as these resources are also more efficient, industrial production will increase both through their higher productivity as well as through their additionality.
• Third, some changes such as the opening up of some areas reserved earlier for public sector for private enterprises, privatisation of public sector, delicensing and reduction in import duties would make Indian enterprises more competitive among themselves and vis-a-vis imports.
• Fourth, some measures thought of for the public sector such as purposeful formulation and the implementation of Memorandum of Understanding and its monitoring, professionalisation and greater autonomy may be expected to improve the performance of the enterprises that will remain in the public sector.
• Fifth, amendments in the MRTP Act regarding large houses and dominant undertaking may be expected to promote large and efficient scales of production and greater emphasis on controlling and regulating monopolistic, restrictive and unfair trade practices will curb the anti-competitive behaviour of the firms in the monopolistic, oligopolistic and ineffectively competitive markets and thus, promote competition and through it efficiency.
• Thus, additionality of resources and improvements in technological, allocative and x-efficiencies that will follow pro-competition policies coupled with increased support from investment in physical and social infrastructures and their supplies may be expected to yield respectable growths of GDP and industrial production in a sustained manner.

Answer : The central public-sector enterprises (CPSEs) play a significant role in the growing Indian economy. There were altogether 277 CPSEs under the administrative control of various ministries/departments. Public sector enterprises have been playing a dominant and unique role in industrial growth and development of Indian economy. In order to dismantle the accumulated problems of unemployment, disparities of rural and urban, inter-regional and inter-class disparities and technological backwardness and to set up a socialistic pattern of society in the country establishment of public enterprises have been conceived.

Impact of liberalization on the performance of PSES:

• The government during the 7th FYP recognized the need for liberalization an PSE reform, since it was the urgent need of the hour for achieving the higher growth rates for poverty alleviation and, in addition to this public sector was in the need of competition for unlocking new industrial policy 1991 brought about significant changes like equity disinvestment, managerial revamp with greater autonomy, referring a sick PSU to the Board of Industrial and Financing Reconstruction and so on.

Some of the positive impact of liberalization on PSEs can be seen as under:-

• Liberal FDI norms and import of capital goods is now forcing them to perform well.
• Increasingly they are being subject to market discipline mainly by listing in the stock exchanges.
• They are now being granted financial and managerial autonomy resulting in better functionary and global competitiveness.
• Above all, the reforms have paid off and the overall performance has improved.

Disinvestment: In disinvestment, there is no change in the management from public to private heads because either the government holds majority equity or even if the government holds less than 51% of equity, rest of it is sold to various individuals and institutions and none of them hold enough to take over management. It is only a money raising activity with some accompanying benefits.

Critical evaluation of disinvestment policy:

• The amount raised through disinvestment is too meager. Further, the way money released by disinvestment is being used, remaining undisclosed.
• The loss of PSU’s is rising.
• This is welcome but disinvestment of profit making public sector units will rob the government of good returns. Further, if department of disinvestment wants to get away with commercial risks, why should it retain equity in disinvested PSU’s, e.g. BALCO (49%), Modern Foods (26%) etc.
• The growth in social sector is not in any way hindered by non-availability of manpower.
• This is true but only when the govt, ensures that the market system regulates and disciplines privatized firms taking care of public’s interest.
• Privatization programme is generally not been affected through the public sales of shares. Earlier, sale of shares (1991-96) attracted the employees to a limited extent and was not friendly to small investors and employees.
• In most cases, shares of disinvested PSU’s are by and large in the hands of institutions with little floating stock. The present policy of privatization through the strategic partner route would also not achieve these objectives.
• No monopoly is good. Only fair and full competition can bring relief to consumers

Answer : The Planning Commission was established in 1950 by Jawaharlal Nehru for promoting a rapid rise in the standard of living by efficiently exploiting resources, increasing production and creating employment opportunities to all. Initially, it was the only advisory body to the PM and later on bodies like Economic Advisory Council and National Advisory Council were invented.

However, recently the government has announced the scrapping of the 64 year old commission and the new body to be formed is likely to be known as the National Development Reforms Commission consisting of eight Members three from the industry and other comprising of former or existing chief ministers and cabinet ministries.

Requirement of a new Commission/why Planning Commission (PC) is no more required in present economic scenario: It is argued the Planning Commission has outlived its significance ever since 1991 when the new economic regime was brought about. In a pro-market reforms economy, these bodies have almost no or very little role to play.

• Now, in the wake of highly globalized era and continuously changing economic scenario, India needs an institution for creative thinking on optimally using its young talent. The country has to push the public-private partnership model and boost up federalism.
• Most often, the PC has been criticised as a parking lot for political cronies and bureaucrats. Sometimes, states blame the palm panel which more or less approves their annual plays, misuses its discretionary powers, hence scrapping PC is likely to bring about more transparency and ensuring better centre state relationship.
• The new body thus formed should actively play a more coordinating role, not between the ministries only but also among the state, which in turn will strengthen the economic federalism in India. Also, there must be clear cut demarcation between the new commission and the Finance Commission. And, all the plan & non plan related work should be handed over to the Finance Commission.

Answer : Exchange Rate

Exchange rate is the amount of the national currency required by the nation to purchase one unit of foreign currency say US dollar. Since most of the international trade that takes place today in money terms exchange rate have an important influence on the flow of international trade. Two types of exchange rate regimes in the contemporary world:

1. Fixed Exchange rate
2. Floating / fluctuating exchange rate

In the fixed exchange rate, the exchange rate of the national currency is fixed and tied to another universally accepted foreign currency say US dollar. The central bank of the nation stand as ready to purchase and sell the foreign currency to keep the exchange rate fixed. In case of fluctuating exchange rate, exchange rate is determined by the demand and supply of foreign exchange by the nationals of a country. The exchange rate appreciates or depreciates, depending on the market forces of demand and supply. This in turn has an impact on the competitive position of the economy. A devaluation/depreciation of a nation’s currency may decrease imports and increase exports to help improve the foreign exchange position of the nation. This is measured and reflected in Balance of payments position of the nation.

Convertibility: When one currency is freely exchangeable with another in the market, this attribute is referred to as convertibility. In a convertibility exchange rate regime one can purchase another currency by paying in with our currency at the market exchange rate.

• Convertibility of a currency may be full or partial. Full float of a currency in the exchange market vis-à-vis other currencies for the determination of exchange rate is practiced by the developed nations. The developing nations like India usually adopt a policy of “managed float” or “partial float”. India’s exchange rate was determined by managed float till 1992. Before India adopted what we call Liberalised Exchange Rate Management System (LERMS) in 1992, the exchange rate of rupee was determined by the Reserve bank of India on the basis of a basket of currencies. IN LERMS, or Partial convertibility 60% of foreign currency holding was permitted to be converted on the market rate whereas remaining 40% on official rate.

Answer : The Reserve Bank of India Act was enacted on March 6, 1934, but became operational from April 1, 1935. In the last 80 years, there have been some amendments to the Act. In the preamble of RBI Act, the term ‘monetary stability’ remains open to debate and interpretation. Though, price stability is being given more importance than exchange rate stability or payment system stability. Price stability, it is argued, is critical for growth and can be quantified and achieved in India -- but only if the RBI is freed of the overbearing influence of the Central government.

• Those in favour of greater central bank autonomy argue that the current system of monetary policymaking in India is unsatisfactory because it is done in consultation with the Ministry of Finance. They also argue that even though the governor and the deputy governors are appointees of the government and are not directly accountable to the public at large, the bank could give periodic inflation reports—a practice in many advanced countries, which could satisfy the accountability criterion to some extent.
• In March 2013, the Financial Sector Legislative Reforms Commission (FSLRC) headed by Justice B.N. Srikrishna proposed the creation of a Monetary Policy Committee (MPC) for deciding monetary policy. The MPC would comprise the Governor, one Deputy Governor and five external members appointed by the government, of whom two would be appointed in consultation with the RBI Governor. One representative of the government would be present but would have no voting rights.
• Again in the Urjit Patel committee report on monetary policy framework noted that the government need not be represented on the monetary policy committee (MPC). The committee may not be required to consult the government on policy objectives. However, explicit legal provisions are required for this proposal to take shape.
• This would need to cover areas such as (a) the relationship between the proposed MPC and the board of directors of the RBI; (b) the relationship between the proposed MPC and provisions of the laws and regulations on commercial banks and other financial institutions; and (c) the institutional mechanisms required to ensure that policy decisions are strictly ‘monetary’ in character and do not impinge on the authority of other organisations.

Answer : Urban Poverty Alleviation Programmes

Interest Subsidy Schemes for Housing for Urban Poor (ISSHUP): The National Housing and Habitat Policy, 2007 lays emphasis on social harmony and on increasing institutional finance for housing for the poor and its accessibility at affordable rates. A new Central Sector Scheme to provide an interest subsidy of 5% per annum to Economically Weaker Sections and Low Income Group segment of the urban areas has accordingly been launched. This is expected to encourage flow of Institutional Housing Finance for the Urban Housing for EWS/LIG house-holds. The National Housing Bank (NHB) and Housing & Urban Development Corporation Ltd. (HUDCO) would be nodal agencies for disbursement of subsidies.

• Swarna Jayanti Shahari Rozgar Yojana (SJSRY) / National Urban Livelihoods Mission (NULM): With a view to provide gainful employment to the urban unemployed or underemployed through encouraging the setting up of self-employment ventures on provision of wage employment, Swarna Jayanti Shahari Rozgar Yojana was launched on 1997. The Scheme is being implemented through State / UT Governments and is funded on 75:25 bases between the Centre and the States. The schemes now has 5 components namely (i) Urban Self Employment Programme (USEP), (ii) Urban Women Self-help Progrmme (UWSP), (iii) Skilled Training for Employment Promotion amongst Urban Poor (STEP-UP), (iv) Urban Wages Employment Programme (UWEP) and (v) Urban Community Development.
• National Urban Livelihoods Mission (NULM): To reduce poverty and vulnerability of the urban poor households by enabling them to access gainful self-employment and skilled wage employment opportunities, resulting in an appreciable improvement in their livelihoods on a sustainable basis, through building strong grassroots level institutions of the poor. The mission would aim at providing shelter equipped with essential services to the urban homeless in a phased manner. In addition, the Mission would also address livelihood concerns of the urban street vendors by facilitating access to suitable spaces, institutional credit, social security and skills to the urban street vendors for accessing emerging market opportunities.
• Jawaharlal Nehru National Urban Renewal Mission (JNNURM): JNNURM was launched on 2005 with the objective of: Focused attention to integrated development of basic services to theurban poor; Security of tenure at affordable price, improved housing, water supply,sanitation; Convergence of services in fields of education, health and socialsecurity;As far as possible providing housing near the place of occupation of theurban poor effective linkage between asset creation and asset management toensure efficiencyscaling up delivery of civic amenities and provision of utilities withemphasis on universal access to urban poor; ensuring adequate investment of funds to fulfill deficiencies in the basic services to the urban poor.
• Rajiv Awas Yojana: Improving and provisioning of housing, basic civic infrastructure and social amenities in intervened slums; Enabling reforms to address some of the causes leading to creation of slums; Facilitating a supportive environment for expanding institutional credit linkages for the urban poor; Institutionalizing mechanisms for prevention of slums including creation of affordable housing stock; Strengthening institutional and human resource capacities at the Municipal, City and State levels through comprehensive capacity building and strengthening of resource networks; Empowering community by ensuring their participation at every stage of decision making through strengthening and nurturing Slum Dwellers’ Association/Federations.

Rural Poverty Alleviation Programmes

• Aajeevika: To reduce poverty by enabling the poor households to access gainful self-employment and skilled wage employment opportunities resulting in appreciable improvement in their livelihoods on a sustainable basis, through building strong and sustainable grassroots institutions ofpoor.
• Mahatma Gandhi National Rural Employment Guarantee Act: The Mahatma Gandhi National Rural Employment Guarantee Act aims to enhance the livelihood security of the people in rural areas through guaranteed wage employment of at least 100 days in a financial year through work that develop the infrastructure base of that area.
• Indira Awaas Yojana: To address the acute housing shortage among rural BPL families.
• Grants to National Institute of Rural Development (NIRD): Enhancement of knowledge, skills and attitudinal changes among trainees, faculty members of SIRDs and other RD Institutes for effective implementation of RD programmes, policy recommendations in respect of specific RD programmes.

Answer : The Ninth Ministerial Conference of the WTO held in Bali, Indonesia, from 3 to 7 December 2013 strengthened the credibility of the WTO as an institution. The outcome ensured that the development dimension remains the central focus in the Doha Round.

• Bali Summit reaffirmed India’s leadership role amongst the developing countries and demonstrated its constructive approach in negotiations. India played a key role in arriving at a breakthrough and shaping the agreement. India ensured an outcome which secures its supreme national interests. It was made amply clear that while being fully prepared to engage, India will never compromise on fundamental issues pertaining to food security, livelihood security, and the welfare of its poor.
• An important development in Bali was the countries entering into Trade Facilitation agreement. India’s persistent efforts, along with those of other like-minded countries, eventually resulted in either elimination of unwarranted parts of the negotiating text or suitable modifications therein to resolve implementation difficulties. The Bali Ministerial Decision has established a preparatory committee to perform such functions as may be necessary to ensure the expeditious entry into force of the TF agreement. India has initiated inter-Ministerial consultations for drafting India’s notifications on category of commitments required under the agreement.
• India’s stand: India’s consistent position has been that matters pertaining to livelihood, food security, and rural development are of vital importance. Special and differential treatment is a must for developing countries as provided under the provisions of the WTO. It is also in complete conformity with the commitment of member states in other multilateral fora like the United Nations (UN) and the Food and Agriculture Organization (FAO) where the fight against poverty and hunger is accorded highest priority.
• India emphasized that an interim solution cannot be a temporary solution nor can it be terminated until a negotiated permanent solution is in place. It was made clear that without a satisfactory decision on food security, India considered the Bali Package as lacking in horizontal balance and would, therefore, not be able to support it. The outcome on the food security proposal provides an opportunity to begin correcting some of the imbalances in the trade rules which are part of the historical legacy of imbalance in the WTO.

Answer : Agriculture plays a vital role in the Indian economy. Over 70 per cent of the rural households depend on agriculture as their principal means of livelihood. Agriculture along with fisheries and forestry accounts for one-third of the nation’s Gross Domestic Product (GDP) and is its single largest contributor. Agricultural exports constitute a fifth of the total exports of the country.

• India is among the 15 leading exporters of agricultural products in the world and has also emerged a significant exporter in certain crops like cotton, rice, meat, oil meals and sugar. Over the years India has developed export competitiveness in certain specialized agriculture products like basmati rice, guar gum and castor. As per WTO’s Trade Statistics, in 2012 India’s agricultural export had a share of 2.6% of world trade and imports had a share of 1.47%.
• Agricultural Exports increased from Rs 1,87,000 crore in 2011-12 to 2,32,000 crore in 2012-13 registering a growth of nearly 24%. Increase in value of agricultural exports during 2012-13 was primarily on account of higher exports of guar gum, cotton, basmati and non-basmati ricemarine products, meat and meat preparations, oil meals and spices. The share of agricultural exports in total exports increased from 12.8% from 2011-12 to 13.1 % in 2012-13.
• In recent years, products like rice and maize, meat, guar gum, and cotton have replaced traditional agri exports. Agri exports (including marine) grew by 5.1 per cent in 2013-14 over 2012-13 to US$ 37,292 million, of which exports of marine products alone increased by 44.8 per cent over the same period.
• Since the opening up of exports of rice in 2011, there has been a surge in its share in total exports from US$ 2575 million in 2010-11 to US$ 7742 million in 2013-14. Exports of total dairy, poultry, meat, and marine products have doubled their share in agri exports between 2008-09 and 2013-14.

Answer : As India struggles to reverse the economic slowdown that has followed a decade of high growth rates, land related issues are increasingly becoming a critical determinant. There are two major reasons why this is so.

First, the reallocation of resources from agriculture to manufacturing and services is the sine qua non of development. This structural transformation cannot be achieved without rapid improvement in agricultural productivity and release of enough surplus labour to run the factories. Low yields in Indian agriculture have a lot to do with the imperfections in land markets vales measures are taken to increase productivity significantly food supply will be a serious bottleneck.

Second, the second reason that land is so important is our huge population relative to the land available, and its concentration in the fertile areas. In India, the space required for non-agriculture production must come largely at the expense of farmland. Stiff resistance to land acquisition has sprung up all across the country in the last decade or so from the Narmada Bachao Aandolan to Singur. In fact, it is the sign of a maturing democracy that is no longer easy to evict poor in the name of land.

This is not to say that the problems have gone unrecognized or that legislative efforts have been absent. Two of the signature laws passed by the government have to do with food security and land acquisition. However, all these initiatives, despite being well intentioned, have not paid sufficient attention to the operation of market forces both its limitations and possibly benign uses to which they can be put. There is insufficient recognition of informal constraints facing decision makers and the often intended consequences of policies through how they shape incentives of various affected parties. Both are likely to be the serious hurdles in the way of implementation.

Answer : There has been limited success in establishing efficient agricultural marketing practices in India. The monopoly of government-regulated wholesale markets has prevented development of a competitive marketing system in the country. In the context of liberalization of trade in agricultural commodities and for the domestic farming community to reap the benefits of new global market access opportunities, there is a need to integrate and strengthen the internal agricultural marketing system.

• Various committees and task forces of the government recommended that control over agricultural markets by the state be eased to facilitate greater participation of the private sector, particularly to stimulate massive investments required for the development of agricultural marketing. The model Agricultural Produce Marketing Act of 2003 was circulated to all states for adoption. The reforms have largely focused on addressing some of the concerns within the existing framework of state Agricultural Produce Marketing Committees (APMC). They have however failed to address monopolistic and uncompetitive practices in inter-state trading of agricultural products. The Committee on Agricultural Reforms (2013) noted that, ‘By and large, the APMCs have emerged as some sort of Government sponsored monopolies in supply of marketing services/ facilities, with all drawbacks and inefficiency associated with a monopoly’.
• Thus, the APMC Act has not achieved the basic objective of setting up a network of physical markets. There are some successful initiatives in direct marketing, such as Apni Mandi in Punjab, Uzhavar Sandhai in Tamil Nadu, Shetkari Bazaar in Maharashtra, Hadaspur Vegetable Market in Pune, Rythu Bazar in Andhra Pradesh, Krushak Bazaar in Odisha, and Kisan Mandi in Rajasthan.

Some measures that would facilitate the creation of a barrier-free national market are:

1. Permit sale and purchase of all perishable commodities such as fruits and vegetables, milk and fish in any market. This could later be extended to all agricultural produce.
2. Exempt market fee on fruits and vegetables and reduce the high incidence of commission charges on agricultural/ horticultural produce.
3. Taking a cue from the success of direct marketing efforts of states, the APMC/other market infrastructure may be used to organize farmers markets. FPOs/self-help groups (SHGs) can be encouraged to organize farmers markets near urban centres, malls, etc. that have large open spaces. These could be organized every day or on weekends, depending on the concentration of footfalls.
4. Include ‘facilitating organization of farmers markets’ under the permitted list of corporate social responsibility (CSR) activities under Companies Act 2013, to encourage companies engaged in agri-allied activities, food processing etc. to take up this activity under CSR and also help in setting up supply chain infrastructure. This would be similar to the e-Choupal initiative of ITC Ltd., but under CSR.

All the above facilitators can also tie-up a link to the commodity exchanges’ platform to disseminate spot and futures prices of agricultural commodities.

Answer : Amongst the developing countries, India has been the largest recipient of foreign aid. Multilateral aid-90 per cent of which has been provided by the World Bank - accounts for about 60 per cent of India's total aid. Amongst bilateral donors, Japan has been the most generous, giving India 23 per cent of the total bilateral aid used by India.

• Supporters of foreign aid claim that while arguments against aid effectiveness are partially true, they are over-emphasized. They argue that the poor "are too poor to save for the future and thereby accumulate the capital that could pull them out of their current misery." Rich nations should increase official development assistance from 0.3 per cent to 0.7 per cent of their GNP, as pledged by them in Monterrey Financing for Development Conference in 2002.
• However, Economist against Foreign aid, argue that foreign aid does not have any measurable impact on growth, and that it has miserably failed to reduce poverty, primarily because of it being tied to centralised, state planning. According to them, initially poor countries grow faster than rich ones, once rich countries control them for economic freedom.
• In general, foreign aid has led to the burgeoning of government bureaucracies, with increasing state interference, inefficiency, lack of accountability, corruption, and so on. At the utilisation level, it has more often been used for consumption rather than investment, to serve political purposes rather than achieve development. Evaluation mechanisms have been weak, and so have been the feedback and improvement systems. On the other hand, economic freedom gives markets, which are great feedback mechanisms for learning what is succeeding and what is failing.
• So, most South Asian countries prefer for private capital than that of foreign aid. Governments in the region should therefore ease the restrictions placed on the flow of private capital, instead of seeking more aid, where FDI has been a significant source of availing capital and technology for exports as well as economic growth.
• FDI and remittances have the potential to offset aid as important engines of growth and development in South Asia, and these countries need to develop conditions that bring in more FDI. At a macro level, to ensure aid effectiveness, South Asia in general, India in particular, needs to bring in good governance and sound macroeconomic policies, which not only make aid effective, but are also able to use aid for building infrastructure and other avenues which help in attracting FDI.
• Nevertheless, until aid flows continue, it might be more effective to have direct transfers of cash or vouchers in targeting the affected population, and in achieving the targets set for development programmes.

Answer : The unprecedented commitment of the Government of India to seriously address the need for employment generation is a propitious opportunity to implement strategies for generating full employment in the country.

While many formal studies have been prepared to assess the growth and employment potential in India' formal private sector, less attention has been given to the conditions and strategies to promote rapid expansion and job creation in the rural and informal sectors.

Strategy to expansion of employment generation in rural economy

1. The Indian economy is already generating approximately seven million employment and self-employment opportunities per annum; almost all of them in the informal sector, but in there are a serious lack of accurate information on the types and numbers of these jobs. The most effective strategy for employment generation will be to provide the missing links and policy measures needed to accelerate this natural process of employment generation.
2. There is enormous scope for raising the productivity of Indian agriculture, doubling crop yields and farm incomes, and generating significant growth in demand for farm labour. The present evidence to demonstrate that improving plant nutrition through micronutrient analysis and improving irrigation through deep chiselling of soil can result in a tripling of crop yields.
3. Rising rural incomes consequent to higher productivity will unleash a multiplier effect, increasing demand for farm and non-farm products and services, thereby stimulating rapid growth of employment opportunities in other sectors.
4. Indian agriculture is constrained by weak linkages between agricultural training and extension, crop production, credit, processing, marketing, and insurance. The report presents an integrated strategy for bringing together all these elements in a synergistic manner by
   • Establishment of village-based Farm Schools to demonstrate and impart advanced technology to farmers on their own lands.
   • Establishment of a network of sophisticated soil test laboratories capable of high volume precision analysis of 13 essential plant nutrients coupled with development of expert computer systems to interpret soil test results and recommend individualized packages of cultivation practices for each crop, location and soil profile.
   • Establishment of Rural Information Centres to act as a medium for transmission of soil test data and recommended practices, access to current input and market prices, and other essential information for upgrading agriculture.
   • Policy and legal measures to encourage contract farming arrangements between agri-business firms and self-help groups in order to increase small farmers' access to advanced technology, quality inputs, bank credit, processing, marketing and crop insurance.
   • Measures to strengthen farm credit and insurance programmes, including creation of linkages between crop insurance, crop loans, and farm school training to encourage farmers who seek credit and crop insurance to adopt improved cultivation practices.
5. In order to ensure ready markets for the crops that are produced, the strategy focuses on the potential for linking crop production with huge untapped markets and specific agro-industries, including energy plantations to fuel biomass power plants, bio-diesel from Jatropha, ethanol from sugarcane and sugar-beet, edible oil from Paradise Tree, horticulture crops and cotton.
6. The India labour force suffers from a severe shortage of employable skills at all levels and that intensive development of vocational skills will act as a powerful stimulus for employment and self-employment generation. In addition to Farm Schools to impart advanced skills in production agriculture, the report recommends establishing a network of government-certified, rural vocational institutes providing training and certification in hundreds of vocational skills not covered by the ITIs.

Answer : Agricultural Price Policy plays an important role in achieving growth and equity in the Indian economy in general, and the agriculture sector in particular. The major underlying objective of the Government’s Price Policy is to protect both producers and consumers. Achieving food security at both the national and household levels is one of the major challenges in India today. Currently, the Food Security System and Price Policy basically consist of three instruments: Procurement Prices/Minimum Support Prices (MSPs), Buffer Stocks and the Public Distribution System (PDS).

Agricultural Price Policy is one of the important instruments in achieving food security by improving production, employment and incomes of the farmers. There is a need to provide remunerative prices for farmer in order to maintain food security and increase the incomes of farmers.

• Minimum Support Price: In each season the Government used to announce the Minimum Support Prices (MSPs). for major agricultural commodities and organizes purchase operations, wherever required, through public, cooperative, and other designated agencies to ensure that prices do not fall below that level. It decides on the support prices for various agricultural commodities taking into account the recommendations of the Commission for Agricultural Costs and Prices (CACP), the views of State Governments and Central Ministries as well as such other relevant factors as are considered important for fixation of support prices.
• Market Interventions Scheme: The Department of Agriculture & Cooperation implements the Market Intervention Scheme (MIS) for procurement of horticultural commodities which are perishable in nature and are not covered under the Price Support Scheme. The objective of intervention is to protect the growers of these commodities from making distress sale in the event of a bumper crop during the peak arrival period when the prices tend to fall below economic levels and cost of production. The condition is that there should be either at least a 10 percent increase in production or a 10 percent decrease in the ruling market prices over the previous normal year.
• Price Support Scheme (PSS): The Department of Agriculture and Cooperation implements the PSS for procurement of oil seeds, pulses and cotton, through NAFED which is the Central Nodal Agency, at the Minimum Support Price (MSP) declared by the Government. The NAFED undertakes procurement of oil seeds, pulses and cotton under the PSS as and when prices fall below the MSP. Procurement under PSS is continued till prices stabilize at or above the MSP. Losses, if any incurred by the NAFED in undertaking MSP operations are reimbursed by the Central Government. Profit, if any, earned in undertaking MSP operations is credited to the Central Government.
• Agriculture Marketing: While production programmes are important to raise productivity and overall production in the country, it is equally important to have efficient agri-markets. This is critical to keep the cultivators incentivized in production. An efficiently functioning market enables the producers to get a better price for their produce while simultaneously it can make goods available to consumers at a lower price. This can normally be achieved by ensuring that agri-markets are well integrated and unified at national level, exports and imports are reasonably open, there is ample competition amongst buyers and sellers avoiding any monopoly, be it from the state or private players, the price discovery mechanisms are transparent, infrastructure is developed and modern, and intermediaries between the producers and consumers are minimized.

Answer : After achieving unprecedented growth of over 9 per cent for three successive years between 2005-06 and 2007-08 and recovering swiftly from the global financial crisis of 2008-09, the Indian economy has been going through challenging times that culminated in lower than 5 per cent growth of GDP at factor cost at constant prices for two consecutive years, i.e. 2012-13 and 2013-14. Sub-5 per cent GDP growth for two years in succession was last witnessed a quarter of a century ago in 1986-87 and 1987-88. Persistent uncertainty in the global outlook, caused by the crisis in the Euro area and general slowdown in the global economy, compounded by domestic structural constraints and inflationary pressures, resulted in a protracted slowdown.

• The slowdown is broadly in sync with trends in other emerging economies, but relatively deeper. India’s growth declined from an average of 8.3 per cent per annum during 2004-05 to 2011-12 to an average of 4.6 per cent in 2012-13 and 2013-14. Average growth in the emerging markets and developing economies including China declined from 6.8 per cent to 4.9 per cent in this period (calendar-year basis). What is particularly worrisome is the slowdown in manufacturing growth that averaged 0.2 per cent per annum in 2012-13 and 2013-14.
• In addition to the growth slowdown, inflation continued to pose significant challenges. Although average wholesale price index (WPI) inflation declined in 2013-14 to 6.0 per cent vis-à-vis 8.9 per cent in 2011-12 and 7.4 per cent in 2012-13, it is still above comfort levels. Moreover, WPI inflation in food articles that averaged 12.2 per cent annually in the five years ending 2013-14, was significantly higher than non-food inflation. Fortunately, the upward trend of inflation that played a part in slowdown in growth, savings, investment, and consumption, appears to have subsided.

Answer : The acceleration of growth in recent years has been accompanied by efforts at greater inclusiveness which has had resonance in many of the slower growing States. However, within this framework of acceleration, despite efforts to be inclusive, there are concerns whether historically disadvantaged groups have benefited adequately and also whether some of them are still neglected. In this context, some of the major issues arising out of exclusion of large sections of society along with the remedial measured can be summed up as follows:

• Over the years several steps have been taken to bridge the gap between the SCs/STs and the rest of the population. These include reservations in educational institutions and government employment. Today there is some progress in improving the position of SCs, STs and OBCs in school enrollment, and in parameters such as literacy and the percentage of people below the poverty line. But gaps still persist, and further efforts are needed. Scholarship schemes for Scheduled Castes (SCs), Scheduled Tribes (STs), Other Backward Classes (OBCs) and Minorities have enabled many students from these communities to continue their education. Greater effort is needed, however, to improve enrollment ratios and to reduce dropout rates especially for girl children among SCs, STs, OBCs and Minorities.
• Along with special incentive for meeting specific needs, the basic strategy arising from inclusive growth is to make disadvantaged groups full participants in the market economy. This may be achieved by providing them the necessary skills to improve employability for quality jobs in the private sector. Entrepreneurship should also be promoted in rapidly growing sectors such as retail, tourism etc. De-notified, nomadic and semi-nomadic tribal communities and the internally displaced people (IDP’s) have been deprived of developmental benefits, as there is no exclusive development programme designed for them. Efforts will, therefore, be made to devise, in consultation with them, suitable development programmes
• Among Scheduled Tribes there are 75 Particularly Vulnerable Tribal Groups (PTGs). They demand special and immediate attention as they suffer on many counts including lack of proper health care. A plan of action needs to be put into place for their survival, protection and development.
• Manual scavengers are the most severely disadvantaged among these groups. The Government had committed to eradicate this heinous practice and provide them sustainable rehabilitation by the end of the Eleventh Five Year Plan. This unfulfilled commitment needs to become priority for fulfillment during the Twelfth Five Year Plan.
• Though ‘Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act’ has been in force since 1995, large numbers of differently abled persons continue to exist on the margins of society. The Twelfth Five Year Plan must initiate special action in consultation with the stakeholders in both urban and rural areas to ensure that their concerns are adequately met.
• To deal with the legitimate aspirations of the people of these neglected regions the overall growth strategy must have a component of regional development. This will require inter-state cooperation and strengthening the pace of development of inter-state and intra-state connectivity of tribal and other isolated communities through forests and difficult terrain. It will need better governance and deeper involvement of local people in the development processes. Skill development and employment opportunities must be an important component of this strategy. There is urgent need to identify such areas for continued and enhanced development.