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Answer Writing
Workbook

GENERAL
STUDIES
Paper - 3

st
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GS Mains Paper-3 Workbook

INDIAN ECONOMY - I
Practice Questions

Q1. Why the labor reforms have not been pushed through in past 20 years, despite the fact
that other sectors have gone under generations of reforms? Critically analyze the major
arguments against labor reforms.

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Q2. What do you understand from crowding-out? It is said that economists must calculate
the net crowding-out rather than advising against crowding-out in general. Critically
analyze.

OR
Q3. Why e-commerce in India has been perceived as a threat and disrupting force for
organized retail? Critically analyze the recent steps taken by the DIPP to regulate the
e-commerce sector in India.
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Q4. Elaborate on the working of Venture Capitalist funds and crowd-funding. What are the
major advantages involved with them for borrower and risks involved for lenders; also
suggest how such risks can be minimized?

Q5. Land leasing is the unfinished agenda of land reforms and is must for agriculture
reforms. Critically examine the need for land leasing in view of above statement. What
effect will it have on rural employment?
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Q6. Swiss challenge model is an innovative PPP model, but there are challenges in the
Indian context. Comment.

Q7. How the recently launched Hydrocarbon Exploration and Licensing Policy (HELP) would
tackle the legacy issues facing the hydrocarbon sector? Analyze the impact of low crude
oil prices on the HELP.

Q8. "There is a need to align fiscal expansion or contraction with credit contraction and
expansion respectively." Critically analyze the statement and suggest the suitable
amendments needed in the laws to achieve this.

Q9. At times the banks have failed to meet the priority sector lending targets and the money
has instead gone into RIDF. In this context, will the guidelines for Priority Sector
Lending Certificates (PSLCs) by RBI enable banks to achieve the purpose of providing
finances to the needy, when the banks themselves are bogged down with issues of
rising non-performing loans and low credit growth?

Q10. Analyze the New Foreign Trade Policy of 2015-2020, amidst the rising challenge of
decreased demand for exports due to impeding global slowdowns? Also discuss some
adjustments that can be made in advance to face the upcoming slowdown in least
impacting way?
Indian Economy [1]
GS Mains Paper-3 Workbook

INDIAN ECONOMY - I
Answer

1. Why the labor reforms have not been pushed through in past 20 years, despite the fact that
other sectors have gone under generations of reforms? Critically analyze the major arguments
against labor reforms.
Hints:

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The Article 246 (with 7th schedule) of the Indian constitution puts the issues related to
labour and labour welfare under the concurrent list. The irony of putting labour in concurrent

laws.
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list is that today we have around 47 central labour laws and more than 100 state labour

The employers view flexibility in labour markets as a pre-requisite for promoting economic
growth and generating jobs, whereas, the trade unionists view flexibility in labour markets
as a strategy for profit-maximizing of the firms, which reduces their bargaining power
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without generating sufficient employment opportunities. For them this insecurity has been
the major cause of concern.
The trade unions and labour unions are very strong pressure groups and are supported by
a unprincipled opposition in parliament, which opposes for the sake of opposition and
obstruction irrespective of party ideology. Because of this reason any proposal to bring even
the necessary labour reforms is also blocked and vehemently opposed.
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Currently any manufacturing firm, which has employee strength of 200 or more, has to take
permission from the labour ministry to fire a worker, if the worker is found unnecessary or
is considered inefficient.
This leads to contract hiring / temporary hiring, where the workers are not on the permanent
payrolls of large companies, and are liable to be exploited and underpaid and not provided
any training.
Also sick companies which need to shut down, as they may no longer be viable cannot let
go of the workers and shutting them down is a long arduous process.
This deters buyers who may want to revamp the whole company or introduce new
technologies, which can bring in more automation and efficiency and probably turn the
company around.
The Laws framed mainly to cater the manufacturing sector, do not address the problems of
the service sector, which today, accounts for 55 per cent of our GDP. The outdated and
inflexible nature of labour laws protects a handful of say 6-7 percent of the workforce,
seriously hampering employment generation capacity of the organized sector and most of
the 10-12 million youth joining labour force every year, are forced to join informal economy,
where the working conditions are pathetic and earnings are also abysmally low.
[2] Hints: Indian Economy
2. What do you understand from crowding-out? It is said that economists must calculate the
net crowding-out rather than advising against crowding-out in general. Critically analyze.
Hints:
Crowding out is an economic phenomenon which takes place when increased governmental
spending decreases private sector investments and fails to increase aggregate demand. Higher
government spending requires capital. This capital is also required by private investors,
including individuals, companies, etc for investment purposes. To attract this capital,
government has to raise the interest rate of securities, so as to make them attractive. The
higher interest rate means high borrowing rates, which discourage people from borrowing
money and causes private sector investments to fall.
Crowding in also originates from government deficit spending, but relies mostly on how
much the government puts in to increase economic activity. An increase in economic activity
creates an opportunity for businesses to increase their operations towards profitability. Thus
the private sector crowds-in to meet the increasing consumer needs, which also maximizes
their profits.

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Crowding-in advances a counter argument against a strict crowding-out hypothesis. This is
because while crowding-in asserts economic growth due to deficit spending, crowding-out

OR
suggests increased interest rates caused by deficit spending.
In times of economic recession, people and businesses are desperate to save their money and
invest it securely. In such times, the government can borrow money even at a lower interest
rate and continue deficit spending. However, in such a scenario, it is likely that government
spending will also increase productive activities and boost demand, thus leading to increased
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private sector investment. For businesses, crowding in is a preferable scenario as it boosts
profits.
Thus, rather than focusing on crowding-out effect of government borrowing and consider
it to be principally wrong, economists must consider net-crowding-out, which factors-in
crowing in and the multiplier effect of government spending.
3. Why e-commerce in India has been perceived as a threat and disrupting force for organized
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retail? Critically analyze the recent steps taken by the DIPP to regulate the e-commerce
sector in India.
Hints:
The tussle between offline retailers (including Reliance, Future Group and Aditya Birla
Group) and online firms (like Flipkart, Snapdeal and Amazon) has been playing out for a
few years now.
This public battle between online and offline retailers centered on the pricing strategies
adopted by the online firms, which were considered as anti-competitive and price-distorting,
as online companies were selling several products even below their production costs in order
to gain market size.
In order to address such concerns, the DIPP has issued set of regulations, discussed as follows:
a) 100% FDI under automatic route is permitted in marketplace model of e-commerce, whereas
FDI is not permitted in inventory based model of e-commerce.
b) A marketplace is simply a platform where buyers meet sellers using technology and the role
of the marketplace platform should be limited to facilitating the transaction (through
payments, warehousing, and logistics).
Hints: Indian Economy [3]
c) The marketplace should not influence the terms of the transaction-buyers and sellers should
carry it out at their own risk and reward. The seller should be liable for product quality and
warranty.
d) Discounts, offers or inducements of any kind have to be offered solely by the seller, and will
not be layered on "directly or indirectly" by the online marketplace. The word "indirectly"
means that, marketplaces can't refinance the sellers for the discounts through credit transfers
or other incentives.
e) No single seller can be more than 25% of the marketplace revenue. However, this single
seller can be a group company of the marketplace and since it could influence such a seller,
this restriction does not allow more than 25% of its revenues from such a group company.
f) Online marketplaces are rendering a service to the sellers and they should charge them for
such services. That should dictate the economics of these models.
Analysis of regulations

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A marketplace like Amazon, Flipkart or Snapdeal may invest in brand-building, attracting
customers, building vendors, showcasing products and indulging in all kinds of marketing
on "behalf" of the sellers, but they cannot offer any inducements to the customers that the

OR
seller has not explicitly agreed to give.
Online retailers were supposed to create efficiencies and pass them on to customers, create
new markets, and develop vendors. They were supposed to use the power of technology,
analytics and utilize access to millions of Indians on smartphones to cut wastage, reduce
inventory losses and create super-efficient, super-lean businesses.
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They were also supposed to open under-served markets and take brands to markets that
were hard to reach-and facilitate creation of powerful brands in India. But all we've seen
is an unsustainable level of price-cutting, unprecedented media blitzes, wastage and
inefficiencies that is not sustainable and may ultimately lead to the bankruptcies. This caused
massive damage to offline companies and brands that lost control over their pricing.
In effect, Government has leveled the playing field between offline retail and online retail-
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and stopped any deviant behavior by online firms who were using capital to distort pricing
and induce customers.
4. Elaborate on the working of Venture Capitalist funds and crowd-funding. What are the
major advantages involved with them for borrower and risks involved for lenders; also
suggest how such risks can be minimized?
Hints:
There are various financing options available to modern entrepreneurs, when starting a new
company, such as venture capital and crowd funding. Venture capital is money that is given
by risk investors to help build new start-up firms that often are considered to have both
high-growth and high-risk potential.
In exchange for their funding, venture capitalists expect a high return on their investment
as well as shares of the company.
In contrast Crowd-funding is a way of raising finance by asking a large number of people
each for a small amount of money. Until recently, financing a business, project or venture
involved asking a few people for large sums of money. Crowd-funding switches this idea
around, using the internet to talk to thousands - if not millions - of potential funders.
[4] Hints: Indian Economy
People invest simply because they believe in the cause. Rewards can be offered or Investors
receive their money back with interest. This is also called peer-to-peer (p2p) lending, it
allows for the lending of money while bypassing traditional banks.
Benefits of alternate sources of finance
Entrepreneurs often turn to venture capitalists for money because their company is so new,
unproven and risky that more traditional forms of financing, such as through banks and
debentures, aren't readily available.
Unlike other forms of financing where entrepreneurs are only required to pay back the loan
amount plus interest, venture capital investments most commonly come in exchange for
ownership shares in the company to ensure they have a say in its future direction.
The relationship between the VC fund and beneficiary company is lengthy and engaging.
Instead of working to get the loan + interest immediately, the venture capitalists work with
the company for five to 10 years before any money is repaid.
Aside from the financial backing, obtaining venture capital financing can provide a start-up

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or young business with a valuable source of guidance and consultation. This can help with
a variety of business decisions, including financial management and human resource

management.

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In a number of critical areas, including legal, tax and personnel matters, a VC firm can
provide active support, all the more important at a key stage in the growth of a young
company. Faster growth and greater success are two potential key benefits.
Risks with VC funds
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Investing in start-ups is a risky business. The high failure rate of venture capital companies
parallels the high failure rate for new businesses themselves.
The failure rate of venture capital companies is between 20% and 90%. However, the risks
associated with venture capital firms are often off-set by the successful few investments that
drive profits.
Risk of fraud e.g. funds may be used for different purpose than what was initially disclosed.
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Risks with Crowd-funding


A lot of donors are just average people. They are not subject matter experts and might be
ignorant on the processes that go into various projects.
Since the companies are small and private, or probably not even registered, then audited
company accounts as well as business plans may not be available to allow them to find out
more about the company.
Crowd funders give small dollar amounts and thus are not particularly bothered by the
returns, they write it off as soon as they give the money
There is a free-rider problem where everyone thinks that others have carried out due diligence
whilst in essence no one has.
Minimization of Risks
Risks can be reduced by extending regulations to these areas and settling the accountability
norms to prevent frauds.
SEBI has already created database of registered VC funds, which get technical support from
SEBI.
Hints: Indian Economy [5]
SEBI (Venture Capital Funds) Regulations ("VCF Regulations") were framed in 1996 to
encourage funding by entrepreneurs' early-stage companies in India. This also provided an
official and regulatory framework for this largely unorganized market.
SEBI is currently in the process of establishing regulations on crowdfunding. Once this picks
up, it will be a boon to the SME/early-stage startups to raise funds from small-time investors.
Similarly, it would also provide an accountability mechanism for the borrowers, particularly
in case of equity crowdfunding.
Risk of fraud is primary reason as why SEBI wants to regulate crowdfunding as there is
possibility of genuine websites being used by fraudsters claiming to be promoters of projects
or of false websites being established, simply to defraud the investors or to entice individuals
to provide credit card details etc. Thus, there is a risk of misuse as well as cyber-security
and/or identity theft.
5. Land leasing is the unfinished agenda of land reforms and is must for agriculture reforms.
Critically examine the need for land leasing in view of above statement. What effect will
it have on rural employment?

E
Hints:
OR
In the first three decades after Independence, land reforms remained high in the stated
agenda of governments and state administrations. Actual success was significant in the
abolition of large estates, for which there was high political backing because the zamindars
of the past were close allies of the British colonial rulers.
The success in redistributing ceiling-surplus land, abolishing or regulating tenancy, allocating
surplus cultivable government land to the landless, and preventing land alienation from
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tribal and other socially vulnerable landholders was, however, much more limited. However,
even these modest gains are highly ephemeral on the ground.
When neo-liberal economic policies hit India with gale force in 1991, land reform went off
the radar of the Indian polity; it became a forgotten agenda in State policy. Thus, today:
a) No more than 4.9 per cent of farmers control 32 per cent of India's farmland
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b) A "large" farmer in India has 45 times more land than the "marginal" farmer
c) Four million people, or 56.4 per cent of rural households, own no land
d) Only 12.9 per cent of land marked - the size of Gujarat - for takeover from landlords
was taken over by December 2015.
The draft National Land Reforms Policy, prepared in 2013, suggests policy correctives:
a) Stopping land-holding exemptions to religious, educational, charitable, research and
industrial organisations beyond 15 acres.
b) Allowing smaller land-holdings in states where the existing limit is more than five to 10
acres for irrigated land and 10 to 15 acres for non-irrigated land.
c) A "single-window" to redistribute surplus land within a specified time.
d) A crackdown on benami - in someone else's name - land.
e) A database of land inventories available for public scrutiny.
The expert committee constituted by Niti Aayog to review the existing agricultural tenancy
laws of various states has suggested a model land leasing law to secure the ownership rights
[6] Hints: Indian Economy
of land owners while also providing security of tenure to tenants. The committee has also
called for the facilitation of access to bank credit and insurance for all tenants, including
share croppers.
It has suggested the enactment of a Model Land Leasing Act, 2016, to permit and facilitate
leasing of agricultural land, to improve agricultural efficiency and equity, access to land by
the landless and semi-landless poor, occupational diversity and to promote accelerated rural
growth and transformation.
Legalization of land leasing could be an important contributing factor in this respect. It
would encourage large land owners to lease out land without fear of losing their land
ownership rights and invest in non-farm enterprises (with appropriate capital and technology
support), which is vital for occupational diversification and rapid rural transformation. This
will reduce the pressure of population on agriculture and enable small farmers to augment
their size of operational holdings by leasing in the land.
Many marginal and small farmers would be better off leasing out their land to more viable

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farmers on rent, while seeking paid employment within or outside agriculture. This would
help them to maximise incomes by way of rentals as well as wage incomes. Land owners
who are otherwise forced to operate small uneconomic holdings will thus have the opportunity

OR
to legally lease out land to other farmers with the assurance of being able to resume possession
at the end of agreed lease period.
Legalising land leasing would greatly help as the ''legal ban or restrictions on land leasing
have led to concealed tenancy in almost all parts of the country. Informal tenants are most
insecure, as they either have short duration oral leases or get rotated from plot to plot each
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year so that they cannot prove continuous possession of any particular piece of land for any
specified period which could give them the occupancy right, according to law of a state. This
provides a disincentive to tenant farmers to make any investment in land improvement for
productivity enhancement.
As many as 570 million Indians, or 47.1 per cent (including 6.7 per cent in urban areas), still
depend on agriculture, which contributes 15 per cent to the GDP, according to a 2011-12
National Sample Survey Office 2011-12 report and 2011 census data. Thus, any change in
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the land reforms policy or a renewed focus on it would lead to the change in employment
structure of these people.
6. Swiss challenge model is an innovative PPP model, but there are challenges in the Indian
context. Comment.
Hints:
A 'Swiss Challenge model' is a way to award a project to a private player on an unsolicited proposal.
Under it any person with credentials can submit a development proposal to the government.
That proposal will be made online and a second person can give suggestions to improve and beat
that proposal. An expert committee will accept the best proposal and the original proposer will get
a chance to accept it or reject the proposal.
In case the original proposer is not able to match the more attractive and competing counter proposal,
the project will be awarded to the counter-proposal.
The Swiss challenge method is one that has been used in India by various states including Karnataka,
Andhra Pradesh, Rajasthan, Madhya Pradesh, Bihar, Punjab and Gujarat for roads and housing
projects.
Hints: Indian Economy [7]
Advantages of Swiss Model:
It cuts red tape in awarding contracts as the bid is presented by the private players.
Timelines is shortened as first step itself which is time consuming takes no time which is
project proposal by private players.
It fosters innovation and enterprise in the infrastructure sector by rewarding the private
sector for its ideas.
An element of competition can be introduced by the modifying the model
Challenges in Indian Context:
The biggest concerns are the lack of transparency and competition while dealing with
unsolicited proposals. It can potentially foster crony capitalism, and allow companies space
to employ dubious means to bag projects.
The government has now brought PPP projects under the ambit of the CAG, so there is some

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scrutiny of projects where significant concessions including land at subsidised rates, real
estate space, viability gap funding, etc. are granted by the government. But there is still no
strong legal framework at the national level, and such projects may be challenged in case

OR
of a lack of transparency or poor disclosures.
Kelkar committee called for the discouragement of Swiss Challenge Model, however in 2009,
the Supreme Court approved the method for award of contracts.
There is example of Mumbai Metro & Airport Metro Line Delhi where economic viability
concerns are raised by private players.
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Since the government authorities might not have complete knowledge of the infrastructural
requirements, this model might result in wasteful expenditure.
Bureaucrats, who ultimately sign off on such projects, continue to be afraid to take calls that
might face an investigation later.
Swiss Challenge model looks promising if done in transparent manner. There are good example of
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success of this model in South Africa, Korea, Indonesia & Taiwan. Governments need to have a
strong legal and regulatory framework to award projects under the Swiss Challenge method.
7. How the recently launched Hydrocarbon Exploration and Licensing Policy (HELP) would
tackle the legacy issues facing the hydrocarbon sector? Analyze the impact of low crude oil
prices on the HELP.
Hints:
India is amongst the least intensively explored countries. The production of oil and gas has as a
result stagnated in recent years. Government recently launched Hydrocarbon exploration and
licensing policy to overhaul of the oil and gas exploration sector. It replaces the existing NELP (New
Exploration Licensing Policy) which was introduced in 1999.
Tackling Legacy Issues:
HELP tries to overcome the bottlenecks created by NELP & resolve the long pending conflicts created
by older policy.
HELP introduce the concept of "open acreage". This will allow companies to define the
contours of the block they wish to explore. Under Nelp, this delineation was done by the
director general of hydrocarbons.
[8] Hints: Indian Economy
It establishes the principle of market-related pricing. This will replace the de facto policy of
administered pricing. It gives companies the freedom to market the products. Hitherto
marketing rights were circumscribed by bureaucratic intervention.
Facilitates Ease of Doing Business under Uniform licensing policy covering all conventional
& unconventional hydrocarbons. Unconventional hydrocarbons like shale oil & shale gas
were not covered under NELP & it was heving fragmented licence regime. Thus, Help not
only plugs the existing policy gaps but also removes inefficiencies in exploiting natural
resources due to a fragmented policy framework and the ubiquitous red tape.
the production-sharing contract between government and contractors would henceforth be
governed by a revenue-sharing model instead of a profit-sharing one. Thus it will resolve the
issues like inflating cost to artificially depress profits, delayed exploration and disputes &
litigation which hampered the progress of most of the exploration projects.
Incentives for investment in high risk areas with concessional royalty regime, which leads
to reduction in cost.

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However the bottoming of oil prices has created the new challenges for the policy.
Challenges & Concern raised:

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Due to downfall in crude oil prices globally, the profits of oil companies have shrunken. In
such scenario a shift from production sharing to revenue sharing will discourage the new
investors as it will prolong the time to recover the cost.
Fall in oil price along with new policy may aggravate the challenges of new exploration. As
it involve huge risk & investment.
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Balance sheets of oil companies are in bad shape so banks are hesitating to give credit easily
to such projects given their high gestation periods and the rising NPAs.
If the gas prices are set too high, sectors like power, fertilizers etc. may be affected.
HELP is the most significant policy change for the upstream sector since 1998, and signals the
government's desire to promote the sector and ease doing business in India. Its success will be
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driven by the attractiveness of Indian basins and how well these policies are implemented. Resolving
legacy issues will also encourage existing and new entrants in the sector to participate in helping
achieve the government's vision of enhanced domestic hydrocarbon production in India.
8. "There is a need to align fiscal expansion or contraction with credit contraction and expansion
respectively." Critically analyze the statement and suggest the suitable amendments needed
in the laws to achieve this.
Hints:
India being a developing economy is expected to have a fiscal deficit to maintain the growth prospects
however the Fiscal Responsibility and Budget Management (FRBM) Act insists on a blanket 3 per
cent arithmetical limit on fiscal deficit.
Finance Minister in his budget speech said that there is a need to align fiscal expansion or contraction
with credit contraction and expansion respectively. Thus it recognises the inverse correlation between
fiscal deficit (fiscal expansion) and bank credit (monetary expansion).
What is inverse correlation between fiscal deficit and bank credit?
If credit growth falls, fiscal deficit may need to rise and if credit rises, fiscal deficit ought to fall - to
ensure adequate money supply to the economy.
Hints: Indian Economy [9]
The logic of correlation between credit expansion and fiscal deficit has five sequential limbs:
Money is the blood of economic growth.
Most money that fuels the economy is created by banks, not by government.
Banks and financial institutions fund business and others, and it is that credit money which
drives the economy.
If, for whatever reason including lack of business confidence, the bank credit to the economy
does not adequately grow, like it did not in the last few years, economic growth will suffer
for want of adequate money.
That is when the Budget needs to step in, to pump money into the economy by incurring
deficit (spending more than the income), and, for the purpose, borrow the money lying with
banks or even by printing more money, if that is needed. This ensures that growth does not
decelerate for want of enough money circulating in the economy.
The FRBM law has ignored the fourth and fifth limbs of the logic and fixed the 3% fiscal deficit as

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inviolable. If the government spends more than its income, then deficit arises, which it has to finance
by borrowing money created by banks. The FRBM Act says it cannot borrow more than 3% of GDP
- even if banks do have money, even if the private sector does not take it, and even if the economy
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needs it for growth. The money may lie idle in banks, and yet the law will not allow the government
to borrow.
However, it is unanimously agreed that money is critical for economic growth. Without adequate
money, GDP growth will suffer.
From 2012-13 to now, i.e. 2015-16, the Indian economy seems to have been experiencing- shrinking
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money expansion and credit demand shrinking even faster.


Way ahead
It's time to align the monetary and fiscal economies. If bank credit growth falls, fiscal deficit may
need to go up. If bank credit growth rises, fiscal deficit should reduce. The FRBM Act need to be
amended to have a range of fiscal deficit instead of a fixed value so that economic growth can be
maintained by targeting a suitable fiscal deficit & also adhering to it. This is of much importance in
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global slowdown & credit agencies monitoring the India's financial consolidation.
9. At times the banks have failed to meet the priority sector lending targets and the money
has instead gone into RIDF. In this context, will the guidelines for Priority Sector Lending
Certificates (PSLCs) by RBI enable banks to achieve the purpose of providing finances to
the needy, when the banks themselves are bogged down with issues of rising non-performing
loans and low credit growth?
Hints:
In order to achieve financial inclusion and balanced credit flow RBI mandate PSL targets to every
commercial bank and also foreign banks that have more than 20 branches in number. 40 % of their
adjusted net bank credit should be remained for the sectors with 18% for agriculture and 10% for
weaker sections. But they have often failed to meet these targets and the money goes into the RIDF.
So, the RBI has come with the new idea of PSL certificates.
According to the new guidelines, banks unable to meet their priority sector lending (PSL) targets
and sub-targets can buy PSLCs issued by the banks that have over-achieved their targets.
This mechanism works like carbon credit in Kyoto protocol. Accordingly, banks can issue four
kinds of PSLCs agriculture, small and marginal farmers, micro-enterprises and those issued for
overall lending targets.
[10] Hints: Indian Economy
Thus, a bank not meeting any sub-targets will have to buy the specific PSLC to meet its goal. As the
banks PSL achievement would be computed as the sum of outstanding priority sector loans, and
the net nominal value of the PSLCs issued and purchased, there will be no transfer of loan or risks.
The buyer would pay a fee to the seller, which will be market determined.
This is seemed to be a good move in the directions when banks are bogged down with issues of
rising non-performing loans and low credit growth as it has many significances such as:
This will provide flexibility to the banks in achieving priority sector lending (PSL) targets as
they can buy these certificates if they fail to comply with the limits.
Currently, several small and even large banks find it tough to meet their target and as a last
-ditch effort deploy money into Rural Infrastructure Development Fund (RIDF) or disburse
loans to some exporter towards the end of the year.
RIDF offers comparatively lower yields and thus serves as a key disincentive for banks to fall
below their priority sector lending targets. With the new guidelines in place, industry experts
say that this flexibility being provided by the central bank will not only allow banks to

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efficiently utilize their resources in their strong business domains, but will also go on to help
develop a secondary market for trading and provide liquidity for such papers.

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PSLCs will allow market mechanism to drive priority sector lending by leveraging the
comparative strength of different banks. It said that while a bank with expertise in lending
to small farmers can over-perform and get benefit by selling its over performance through
PSLCs, another bank better at lending to small industrycan buy these certificates while
selling PSLCs for micro enterprise loans.
It is an interesting innovation and is in line with other changes that the RBI has brought for
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priority sector lending. Directed credit on a large percentage of credit book is not desirable
and some degree of flexibility was required. Also, many foreign and small banks dont find
it viable to do rural banking or lending to SMEs, so this will help them meet their targets
without deploying much of their resources for the same.
The coming time will be critical to see if the idea will be useful to the banks and will enable them to
make their business profitable.
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10. Analyze the New Foreign Trade Policy of 2015-2020, amidst the rising challenge of decreased
demand for exports due to impeding global slowdowns? Also discuss some adjustments
that can be made in advance to face the upcoming slowdown in least impacting way?
Hints:
Foreign Trade Policy (FTP) of a country are government actions, especially tariffs, import
quotas, and export subsidies, designed to increase net exports by promoting exports or
restricting imports.
Currently International trade is facing slowdown due to weakening of global demand
especially in developed countries & readjustment of Chinese economy. Its impact is clearly
visible on the India's foreign trade as export declined by 15.3 per cent to $261billion in 2015-
16.To recover from the shrinking exports & boost economic activity in the country government
announced FTP 2015-2020.
a) The New FTP recognize a 'whole-of-government' approach which looks to streamline the
State and Union Territory (UT) Governments and various departments and ministries of
the Government of India in the process of international trade. This approach will enhance
the direct participation of states to improve on exports, finding new areas of expertise &
new markets to focus. However, the framework of this coordination is still not clear.
Hints: Indian Economy [11]
b) Multiple schemes will be replaced with two major schemes i.e. Manufacturing Exports
from India Scheme (MEIS) & Service Export from India Schemes (SEIS), this will simplify
the whole process for better implementation. These schemes are also extended to SEZs,
this move will enhance the efficiency & capacity utilization of SEZs.
c) The Policy encourages procurement of capital goods from indigenous manufacturers
under EPCG scheme and export obligation has been reduced to 75% as against 90%
earlier. This will promote the domestic capital goods manufacturing industry.Such
flexibilities will help exporters to develop their productive capacities for both local and
global consumption.
d) Duty credit scrips issued under MEIS and SEIS and the goods imported against these
scrips are fully transferable and usable for payment of customs duty, excise duty and
service tax. This will translate the use of these scrips without delay & for multipurpose.
e) Online filing of documents/ applications and Paperless trade in 247 environment will
improve Trade facilitation and enhancing the ease of doing business. Recently, the
government has reduced the number of mandatory documents required for exports and

E
imports to three, which is comparable with international benchmarks.
f) Agricultural and village industry products to be supported across the globe at rates of
OR
3% and 5% under MEIS. Higher level of support to be provided to processed and
packaged agricultural and food items under MEIS. This will reduce the agriculture
wastage & enhance rural economic activity. Industrial products to be supported in
major markets at rates ranging from 2% to 3%.
There are few areas of concern like MEIS, for example, is a new scheme that is aimed and
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boosting exports but of specified goods to specified markets and SEIS is for increasing
services exports of notified services. The markets are yet not free and the government's new
Policy is still trying to keep itself entrenched as a conduit between Indian exporters and their
markets. SEZs in India is not performing for what they were expected, they just become
place of IT companies enjoying tax holiday without significantly contributing toward
manufacturing. New policy has not given required attention to boost manufacturing in
SEZs.
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It is predicted that global slowdown will remain in the near future, India need to make some
adjustment to it.
a) India should implement the GST, as this will reduce the taxation burden on export
products & simplify the process.
b) Structural & taxation reforms are required to boost the manufacturing at SEZs.
c) India need to work out new Regional Trade Agreements & RCEP Agreement need to
be given priority in wake of TTP of which India is not a member.
d) Government need to clear its stand on Minimum Alternate Tax (MAT) and Dividend
Distribution Tax (DDT) to clarify the doubts of investor & stay away from retrospective
taxation for stable taxation regime & to build confidence of investors in India.
New FTP envisage to achieve $ 900 billion export & 3.5% foreign trade share by 2020.In
current circumstances & predicted global slowdown to be continued, these targets will be a
challenging task for India, however, sustained efforts to boost domestic manufacturing,
stable taxation, removing infrastructure & technological bottlenecks, exploration of new
markets & diversification of export products can enable India to achieve its target.

[12] Hints: Indian Economy


GS Mains Paper-3 Workbook

INDIAN ECONOMY - II
Practice Questions

Q1. The term green finance has gained a lot of attention in the past few years with the
increased focus on green development. Why the green finance is an ambiguous term
and what are the issues in mobilization and effective use of green finance? Is it a
sufficient step towards the sustainable development?

E
Q2. Taxation is not just about financing expenditure; it is economic glue that binds citizens
to the state in a two-way accountability relationship. Analyze in the context of India's

OR
Fiscal capacity and fiscal discipline?

Q3. The risk borne by a single party is extreme in case of both the PPP models (BoT and
EPC). In the light of above statement explain how Hybrid Annuity model will resolve
this problem also highlight its key features? Also analyze how the adoption of this
SC
model can help in completion of stalled projects?

Q4. Discuss, why the government efforts towards establishing a successful crop insurance
system have failed so far? Can the newly Launched Pradhan Mantri Fasal Bima Yojana
reverse the existing dismal state of affairs; analyze the scheme on parameters of stability,
inclusiveness and fiscal burden?
GS

Q5. In order to attract more investment in the Hydrocarbon sector, the government has
replacedProduction Sharing Mechanism with Revenue Sharing Mechanism. Explain the
differencesbetween both of these models. Will the Revenue Sharing Model be able to
solve the issues related to the earlier method? Discuss.

Q6. Financial inclusion is not merely about opening more and more bank accounts, but is
rather about developing a habit among people to deposits their small savings into banks.
Discuss the importance of financial inclusion in context of resource mobilization efforts
of government? Also evaluate the Pradhan Mantri Jan Dhan Yojana in the context of the
statement?

Q7. The problem of farmers' suicide in India is deeply embedded in the credit structure of
rural India than a singular crop failure. Elucidate.

Q8. Accessibility to raw materials is the first upstream requirement for food processing
industry. What role Contract Farming can play in improving the supply and quality of
raw materials? Is it feasible according to Indian agriculture scenario?

Q9. Elaborate the link between Policy Paralysis and the rise in unemployment. Also describe
how such situation leads to the erosion in confidence in government and further leads
to various other problems in an economy.

Indian Economy [13]


Q10. Success of the 'Make-in-India' initiative would depend on the ability to attract
investments - both domestic and foreign - into the sector. In this context elaborate the
major challenges faced by Make in India initiative and also suggest some measures to
overcome these challenges.

E
OR
SC
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[14] Indian Economy


GS Mains Paper-3 Workbook

INDIAN ECONOMY - II
Answer

1. The term green finance has gained a lot of attention in the past few years with the increased
focus on green development. Why the green finance is an ambiguous term and what are the
issues in mobilization and effective use of green finance? Is it a sufficient step towards the
sustainable development?

E
Hints:
Green finance is a phenomenon that combines the world of finance and business with

OR
environment friendly behavior. It may be led by financial incentives, a desire to preserve the
planet, or a combination of both. In addition to demonstrating proactive, environment friendly
behavior, such as promoting mass transit or the recycling of used goods, green finance is
about avoiding the promotion of any business or activity that could be damaging to the
environment now or for future generations.
SC
However, there is no commonly accepted definition of green finance; it is also taken as a
synonym to green investment. Different organizations & countries have developed different
guideline & definitions of it thus making it ambiguous.
The issues in mobilization and effective use of green finance are:

a) The return on green finance is long term, low in monetary value & many times intangible,
so that the ability of the financial system to mobilize private green finance, especially in
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developed countries is difficult.

b) Developing countries like India have challenges of development & poverty alleviation,
so allocation of resources toward meeting fundamental needs & promoting the green
projects which require heavy investment is a challenge.

c) In many countries, green finance & much of the green projects are limited to the
investment in renewable energy; India whose 60% of installed capacity is coal based,
greening of coal technology is required which is mostly limited to private players in
developed countries. It is subjected to IPR & makes them cost prohibitory.

d) Green bonds are perceived as new and attach higher risk and their tenure is also
shorter. There is a need to reduce risks to make them investment grade.

e) While environmental risk assessment is important, banks should not overestimate risks
while providing green finance.

f) Green finance should also consider unsustainable patterns of consumption as a parameter


in deciding finance, particularly conspicuous consumption and unsustainable lifestyles
in developed countries
Hints: Indian Economy [15]
There is also a need for an internationally agreed upon definition of green financing as its
absence could lead to over-accounting. In spite of many definitions & standards sustainable
development & sustainable economy is at the heart of green finance. It is one of the most
important the necessity to promote the environment friendly development & sustainable
practices, however, many other components are required as a sufficient conditions for
sustainable development. It include change in mind set of people to optimally utilize the
resources, International agreements on common issues like global warming & preservation
of wild life & forests, policies that promotes sustainability in industry & social life and green
technology transfer from developed to developing countries.
2. Taxation is not just about financing expenditure; it is economic glue that binds citizens to
the state in a two-way accountability relationship. Analyze in the context of India's Fiscal
capacity and fiscal discipline?
Hints:
Democracy is a contract between the state and its citizens. This contract has a vital economic
dimension: the state's role is to create the conditions for prosperity for all by providing

E
essential services and protecting the less well-off via redistribution.
The citizen's part of the contract is to hold the state accountable when it fails to honor the
OR
contract, but a citizen's stake in exercising accountability diminishes, if he does not pay in
a visible and direct way for the services the state commits to providing.
Both government & people are accountable to run the show. This both end accountability
ensures that the public money is utilized efficiently & enough resources are mobilized to
pace the development ahead. Government need to adhere to fiscal discipline & have constant
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monitoring & transparency in spending.


While analyzing it from prism of Fiscal capacity i.e. spending and especially taxation is key
to long run economic development. Simple tax-GDP (16.6%) and spending-GDP(26.6%)
ratios suggest that India is under-taxed and it under-spends w.r.t comparable countries.
India does tax and spend less than other politically developed nations, but given that most
other democracies took time to strengthen tax capacity, perhaps India is not an outlier on
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this dimension, either.


India does stand out in the number of individual income taxpayers, currently about 4
percent, far from our desirable estimate of about 23 percent (i.e., size of middle class), i.e.,
we are utilizing much less than our fiscal capacity.
Building long-run fiscal capacity is vital. One low hanging fruit would be to refrain from
raising exemption thresholds for the personal income tax, allowing natural growth in income
to increase the number of taxpayers.
Beyond that, building fiscal capacity is also about creating legitimacy in the state. This can
be acquired by prioritizing improved delivery of essential services that all citizens consume:
public infrastructure, law and order, less pollution and congestion, etc. reducing corruption,
fiendishly difficult as it is, must be a high priority not just, because of its economic costs, but
also because it undermines legitimacy.
The more citizens believe that public resources are not wasted, the greater their willingness
to pay taxes.
Similarly fiscal discipline is essential and subsidies to the well-off(amounting to about R1
lakh crore) need to be scaled back. The utilization of fiscal capacity in itself would also bring
about much of fiscal discipline.
[16] Hints: Indian Economy
3. The risk borne by a single party is extreme in case of both the PPP models (BoT and EPC).
In the light of above statement explain how Hybrid Annuity model will resolve this problem
also highlight its key features? Also analyze how the adoption of this model can help in
completion of stalled projects?
Hints:
Most of the earliest highway projects allocated through PPP mode were implemented through
BOT (Built-Operate-Transfer)-TOLL MODE. Under this model the private party is selected
to build, maintain, and operate the road based on most competitive bidding, i.e., the one
who offered most share of revenue to the government.
Here, all the risks- land acquisition and compensation, construction (i.e., risk associated with
cost of project), traffic risk and commercial risk were with the private party. The private
party is dependent on toll for its revenues. The government is only responsible for regulatory
clearances. Thus, in this model all the risk of non-implementation and cost-overrun was
borne by the Private sector.

E
To solve this Problem Government Brought EPC model. EPC stands for engineering,
procurement, and construction. It is a model of contract b/w the government and private

contracting. OR
contractor. The EPC entails the contractor; build the project by designing, installing and
procuring necessary labor and land to construct the infrastructure, either directly or by sub-

Under this system, the entire project is funded by the government rather than the PPP model
where there is cost sharing. It was not a sustainable model in Long run since it. suffered
from one inherent limitation i.e. the financial resources available with the government.
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HAM model is a Combination OF EPC model and BOT-Annuity model. Under this model.
The government will provide 40 percent of the project cost to the developer to start work
while the remaining investment has to be made by the developer. Thus, under this model
Risk is shared equally between both the parties i.e. Government and Private player and thus
it resolves the problem of extreme risk borne by a single under the previous 2 models.
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Key features of the HAM Model


Under this the government will pay 40 per cent of the project cost to the concessionaire
during the construction phase in five equal installments of 8 per cent each.
HAM is a mix of BOT Annuity and EPC models. As per the design, the government will
contribute to 40% of the project cost in the first five years through annual payments (annuity).
The remaining payment will be made on the basis of the assets created and the performance
of the developer. Here, hybrid annuity means the first 40% payment is made as fixed
amount in five equal installments whereas the remaining 60% is paid as variable annuity
amount after the completion of the project depending upon the value of assets created. -
Revenue collection would be the responsibility of the National Highways Authority of India
(NHAI); developers will be paid in annual instilments over a specified period of time.There
is no toll right for the developer.
An important feature of the hybrid annuity model is allocation of risks between the partners-
the government and the developer/investor. While the private partner continues to bear the
construction and maintenance risks as in BOT (toll) projects, it is required only to partly bear
the financing risk. The developer is insulated from revenue/traffic risk and inflation risk,
which are not within its control.
Hints: Indian Economy [17]
How the adoption of this model can help in completion of stalled projects?
In the hybrid annuity model, one need not bring 100 per cent of finance upfront and since
40 per cent is available during the construction period, only 60 per cent is required to be
arranged for the long term. It would be easier for Private Players to raise the remaining 60%
fund from the Market, since lending for hybrid annuity-modeled projects would be
comparatively easier as there is no traffic risk associated. Lenders would be comfortable as
the execution risk is less for contractors as the bidding rolls out only after 90% land is
available.
This makes it attractive and viable for the private player to invest in Highway projects, as
in last few years many of the highway projects were stuck due to Lack of fund availability
for private players due to high NPAs of the banks and lack of long term financing options
in India. This will help in completion of stalled Projects.
4. Discuss, why the government efforts towards establishing a successful crop insurance system
have failed so far? Can the newly Launched Pradhan Mantri Fasal Bima Yojana reverse the

E
existing dismal state of affairs; analyze the scheme on parameters of stability, inclusiveness
and fiscal burden?
Hints:

OR
Though India has launched various crop insurance schemes such as First Individual Approach
Scheme 1972-1978, Pilot Crop Insurance Scheme (PCIS) 1979-1984, Comprehensive Crop
Insurance Scheme (CCIS) 1985-99 which was modified in 1999 as National Agricultural
Insurance Scheme (NAIS) followed by Modified National Agricultural Insurance Scheme
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(MNAIS), Pilot Weather Based Crop Insurance Scheme (WBCIS), and National Crop Insurance
Programme (NCIP), but still the farmers have not derived benefits from insurance schemes
commensurate with the cost of the premiums they have had to pay (despite government
subsidy) due to various reasons:
a) Procedures for taking out the policies and claiming compensation have been cumbersome.
b) Delay in receiving crop claim- limited data and quality and reliability of such data due
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to outdated collection models.


c) Availability of suitable data to assess the crop loss- India does not have a suitable
weather data to assess the crop loss which results in low claims being paid to the
farmers.
d) Crop insurance premium being too meager in amount- the amount that is received is
too low to compensate for the loss of the crop.
e) Other major problem is that of limited land titles-leading to limited farmers' access to
crop insurance, given the poor records and the frequent need to bribe officialdom to
prove title even when legality is unquestioned.
f) Big and influential generally corner most of the claims due to political influence and
better information about how such schemes work.
Due to above mentioned Problems, barely 23 per cent of cultivators have till date opted for
insurance cover.
How can Pradhan Mantri Fasal bima Yojana improve the situation?
PMFBY has a potential to reverse the above dismal situation because it has following elements:
[18] Hints: Indian Economy
a) Presently farmers have been required to pay a premium share of as high as 15 per cent
in several areas in the country; this crop insurance scheme would cap the premium at
2% for kharif crops and 1.5% for rabi crop. This would make it affordable for the
farmers to buy crop insurances and therefore this scheme would bring Financial Inclusion
as even small Farmers will be able to buy Agriculture Insurance due to meager
contribution in Premiums.
b) Secondly in Earlier schemes there was a provision of capping the premium rate which
resulted in low claims being paid to farmers This capping has now been removed and
farmers will get claim against full sum insured without any reduction.
c) Thirdly, under this scheme use of technology will be encouraged and smart phones will
be used to capture and upload data of crop cutting to reduce the delays in claim
payment to farmers.
d) Another unique feature is that this insurance scheme will provide localized risk coverage
and has added a number of natural calamities. For instance, given that last year,
unseasonal rains during March and April had destroyed crops during the harvest season

E
in several states, the insurance plan will now provide coverage for post-harvest losses
caused owing to rain and hailstorm across India. Earlier, this was applicable only to
cyclone-prone regions.
OR
Though PMFBY is a sound scheme if we take the Parameters of Inclusion and Stability,
however, many critics believe that implementation of the scheme could lead to fiscal burden
of whopping Rs 8,800 crore once the target of bringing 50 per cent crop under insurance
is achieved in three years, as the Centre's financial liability goes up, the bill of the states
where the scheme gets implemented will also go up correspondingly. This could have negative
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effect on the fiscal consolidation process of the incumbent government.
Though it would have negative implication on the government finances, however, that price
may still be worth paying for a country where only a fifth of farmers have crop insurance
coverage. Subsidized premiums and prompt claims settlement enabled by remote sensing
and GPS technology - as opposed to patwaris and crop-cutting experiments - should help
substantially expand coverage. An increase in the area insured should also bring down
premium rates, through spreading of risks across more farmers. That would also help contain
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the government's subsidy burden.


5. In order to attract more investment in the Hydrocarbon sector, the government has
replacedProduction Sharing Mechanism with Revenue Sharing Mechanism. Explain the
differencesbetween both of these models. Will the Revenue Sharing Model be able to solve
the issues related to the earlier method? Discuss.
Hints:
The government has recently announced a radical overhaul of the oil and gas exploration
policy. It has launched Hydrocarbon exploration and licensing policy to replace the existing
NELP, which was introduced in 1999.Under the New policy Production sharing Mechanism
have been replaced by the Revenue sharing mechanism.
Differencebetween the 2 models
Under the production sharing contract (PSC), the contractor first recovers his expenditure
before sharing profit.
Under the Revenue sharing model, companies would have to pay the Government an agreed
amount, depending on the level of output, and not on the investment in the exploration
block.
Hints: Indian Economy [19]
How Revenue sharing Model will solve the issues related to the earlier method?
In profit sharing method contractors gold-plated (fake increase) their costs to artificially
depress profits. This not only led to disputes and litigation, but also caused project delays
as government pored over each decision by the contractor to check for possible fraud.
Other problems of production sharing method included fewer revenues for the government.
No continuous supply of oil and gas during the times of low oil prices was secured and this
method was also criticized by Ashok Chawla committee on pricing of natural resources of
favoring the private sector at the cost of government.CAG report too highlighted about some
irregularities.
Such problems are less likely to occur under revenue-sharing, the Government will not be
concerned with the cost incurred and will receive a share of the gross revenue from the sale
of oil, gas etc. This is in tune with Government's policy of "Ease of Doing Business.
Government revenue would definitely increase under the revenue sharing method as they
will have to share revenue with the government from day 1, unlike Production sharing

E
method where they will only get revenue once the cost of contractor is met.
Revenue sharing mechanism would increase transparency and would reduce the government
OR
intervention in the sector, since government would not face the burden of scrutinizing the
cost of the firms involved in the sector. This is in tune with the government motto of
minimum government maximum governance.
However, many experts believe that Revenue sharing model is notgood for oil and gas
exploration sector as the companies will not feel confident about investing huge capital with
significant costs under circumstances in which their recovery is not guaranteed.
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It may be possible that the oil and gas production might suffer in the unforeseeable future
rendering the investment recovery in danger.
Thus even though Revenue sharing model will bring in more transparency in the Hydro carbon
sector and reduce Government interference in the sectorIn a country like India where 2/3rd of the
oil and gas blocks remains undiscovered/underdeveloped moving to RSC is not a good idea as in
such blocks PSC is preferred because of the high investment and risk involved.
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Instead government could have opted for the continuation of the older method along with
strengthening regulations and monitoring over such projects and streamlining the blockades like
red-tapism,weak contracts,etc in order to ensure adequate revenues along with continuous oil and
gas supply.
Supplementary Notes
Key features of the NELP
A single license for exploration and production of all forms of hydrocarbons in blocks to
firms offering the maximum revenue to the government would be given. Blocks would be
allocated under the 'open acreage policy', wherein companies can submit bids for areas of
their choice. Under open acreage policy companies can choose blocks from the designated
area round the year without waiting for roadshows and auctions like in NELP.
Production-sharing contract between government and contractors would henceforth be
governed by a revenue-sharing model instead of a profit-sharing one.
It provides for a common license for all hydrocarbons, including shale gas and coal bed
methane, and does away with computing complex investment multiples and scrutinizing
cost recoveries
[20] Hints: Indian Economy
It also provides marketing and pricing freedom for the crude oil and natural gas produced.
On the lines of NELP, cess and import duty will not be applicable on blocks awarded under
the new policy.
6. Financial inclusion is not merely about opening more and more bank accounts, but is rather
about developing a habit among people to deposits their small savings into banks. Discuss
the importance of financial inclusion in context of resource mobilization efforts of government?
Also evaluate the Pradhan Mantri Jan Dhan Yojana in the context of the statement?
Hints:
Well developed and widely spread financial system extends credit facility to those who do
not have adequate finance themselves but have business ideas and zeal to carry entrepreneurial
activities resulting in acceleration of growth.
On the contrary, absence of financial penetration and deepening results in absence of debt
leverage to micro enterprises and they have to either borrow at very high rates of interest
or have to be contented with their own capital. This leads to restricted growth in economic

E
activities.
Financial Inclusion is indeed about bringing a large section of people within formal monetary

OR
system, so that overtime they would get integrated with the rest of the economy. Similarly,
another objective is to boost the financial flows in economy.
In Indian context, financial inclusion is further important to reduce leakages from the financial
flows from government, whether its subsidy benefits or the NREGS payments.
The small savings by people into formal banking or post-offices further brings new funds in
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market and increase the availability of money. This helps not only the corporate sector to
borrow at reduced costs, it also enables Government to borrow funds without crowding-out
the private sector investments.
As small savings accounts in post offices and increased SLR funds are available for it
exclusively and don't reduce the supply of credit in market. Thus, financial deepening can
have a considerable impact on the resource mobilization efforts of government.
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Performance of Jan Dhan Yojana


At present, only 58% of Indian households have access to banking services, which means
more than 40% of households lack access to formal credit and finance system and therefore,
are forced to depend on usurious money-lenders. Furthermore, potential investors among
them have no option but to put money in shady Ponzi schemes.
A formal bank account becoming the norm will also help the government to directly pay all
subsidies into the accounts of the poor and help plug the leaks. An efficient, transparent and
sleek system of subsidy disbursal will help the government to better assess and implement
its social welfare schemes.
The PMJDY scheme, wishes to bring such people within formal finance and aims for expansion
of financial services to hitherto unexplored territories. It has also been successful in creating
a world record in terms of creating new accounts.
As per an assessment by Bill and Melinda Gates Foundation, the scheme has improved over
the previous financial inclusion scheme, the concept of Bank Mitr was introduced much
before the PMJDY, however, their availability was issue, but now as per the study, the
availability has improved significantly and the intent among banks to make this scheme is
clearly visible.
Hints: Indian Economy [21]
It is, however, too early to declare the program an unqualified success. A few points deserve
a mention here. Out of the total 136.8 million accounts, 85.9 million (63%) are still zero
balance accounts. Account access alone does not create financial inclusion, which requires
regular use of accounts. There is however, a high hope for that, because government is
increasingly linking those accounts for subsidy transfer and pension payments leading to
their increasing use as per JAM trinity objective.
Pros
Expand banking, financial & insurance sectors
Allow direct cash transfer to targeted beneficiaries
Plug the leaks in subsidy system
Ensure transparency, weed out corruption
Cut avenues for black money generation
Remove the influence of money lenders & Ponzi schemes

E
Better data collection & assessment
Cons

OR
Another social welfare scheme
Questionable viability of banking, insurance accounts
Priority versus freebies banking
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Burden on the taxpayer


7. The problem of farmers' suicide in India is deeply embedded in the credit structure of rural
India than a singular crop failure. Elucidate.
Hints:
India is an agrarian country with around 60% of its people depending directly or indirectly
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upon agriculture. Farmer suicides account for 11.2% of all suicides in India.
There are a number of conflicting reasons for farmer suicides, such as monsoon failure, high
debt burdens, genetically modified crops, government policies, public mental health, personal
issues and family problems.
But the basic reason is lack of credit facility to the farmers. Credit is a catalyst that lubricates
the process to accelerate the farm and non-farm sector development including rural
industrialization, business and service segments of the economy. Credit helps farmers invest
in creating assets to generate output and income through deploying science, technology and
modern methods of business management.
The crop failures which are leading to farmers suicide in India are not compensated by
appropriate National agriculture insurance but this get more pronounced due to lack of
credit facilities which hampers the growth of infrastructure facilities like rural godowns,
post-harvest management facilities.
As commercial banks are not present in remote locations of India, where agriculture is
supposed to thrive, it becomes an important limitation as the rural population has a strong
dependence on it. Co-operative banks which have been set up previously were also doomed
to fail as a result of bad loans and a lack of funds. They prefer lending out to areas where
each farmer owns a much larger proportion of land and also, have better irrigation systems.
[22] Hints: Indian Economy
Thus lack of credit facilities add more worries to the farmer than the crop failure because
with better credit facilities he can reduce the intensity of crop failure or can manage the crop
failure due to natural disasters properly.
Hence timely and adequate supply of credit is a basic requirement of small farm families.
This can be improved by expanding the outreach of the formal credit system to reach the
really poor and needy; by reducing rate of interest for crop loans to 4 per cent simple, with
government support; by providing moratorium on debt recovery, including loans from non-
institutional sources, and waiver of interest on loans in distress hotspots and during calamities,
till capability is restored; by establishing an Agriculture Risk Fund to provide relief to farmers
in the aftermath of successive natural calamities; by developing an integrated credit-cum-
crop-livestock-human health insurance package.
8. Accessibility to raw materials is the first upstream requirement for food processing industry.
What role Contract Farming can play in improving the supply and quality of raw materials?
Is it feasible according to Indian agriculture scenario?
Hints:

E
Contract farming refers to the production and supply of agricultural produce under advance
contracts, the essence of such contracts being a commitment to provide an agricultural

maximum) and time.


OR
commodity of a type, at a time and a price, and in the quantity required by a known buyer.
It basically involves four things - pre-agreed price, quality, quantity or acreage (minimum/

The contracts could be of three types; (i) procurement contracts under which only sale and
purchase conditions are specified; (ii) partial contracts wherein only some of the inputs are
SC
supplied by the contracting firm and produce is bought at pre-agreed prices; and (iii) total
contracts under which the contracting firm supplies and manages all the inputs and the
farmer becomes just a supplier of land and labor.
Food processors can minimize their overhead costs per unit of production by operating their
plants at or near fully capacity by obtaining assured, stable and quality raw material supplies
from farms under contracts.
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For a processor, contracts are more flexible in the face of market uncertainty, make smaller
demands on scarce capital resources and impose less of an additional burden on management.
They also overcome land constraint for corporate firms, reduce production risk, and are
politically more acceptable than corporate farming.
Contracting can give a positive image to the company as it may be perceived as progressive
especially if it works with small farmers, and can help it get access to state or donor funds.
At more macroeconomic level, contracting can help to remove market imperfections in
produce, capital, land and labor markets, remove intermediaries and therefore make upstream
value chain (agricultural marketing) more efficient, and can help in better co-ordination of
local production activities as it often involves initial investment in processing, extension, etc.
Contract farming would generate gainful employment in rural communities, particularly for
small holders and landless agricultural labor and promote rural self-reliance in general by
pooling locally available resources & expertise to meet new challenges.
But In present Indian agriculture scenario in which small farms contribute around 30-35%
to the total agricultural output; Contract farming has not benefitted in a meaningful way
due to information asymmetry, weak bargaining power and legal ambiguities which create
insurmountable hurdles to producer-buyer relationships.
Hints: Indian Economy [23]
However Contract farming is the need of the hour in the Indian agricultural scenario due
to the whole gamut of benefits it provides not only to the immediate parties involved but also
to society as a whole. Contract farming would reduce the load on the central & state level
procurement system by increasing private sector investment in agriculture. It would bring
about a market focus in terms of crop selection by Indian farmers and generate a steady
source of income at the individual farmer level.
9. Elaborate the link between Policy Paralysis and the rise in unemployment. Also describe
how such situation leads to the erosion in confidence in government and further leads to
various other problems in an economy.
Hints:
The Indian Economy, which was doing exceptionally well in the first decade of 21st century
had the potential to grow at 8 to 9 per cent, but it was slowed down to 4.6 per cent. The
government with its short-sighted policies missed a very good opportunity to put the economy
on a high growth trajectory.

E
According to the Economic Survey for 2012-13, the moderation in growth was primarily
attributed to weakness in industry which registered a growth rate of 3.5 per cent and 3.1
per cent in 2011-12 and 2012-13, respectively. This industrial weakness is attributed to the
OR
policy paralysis, government didnt brought meaningful reforms to the system and instead
of concentrating on doling out subsidies for votes, it should have focused on expediting
investment in big infrastructure projects and bringing pending reforms in labour and fiscal
sector.
The reasons attributed to policy paralysis are:
SC

a) Formation of coalition government leads to pressure from political parties and consensus
cannot be developed for example the railway reforms rise in fair of railways had to be
reversed due to TMC objection, which in turn led to further deterioration in finances of
Indian railways.
b) Judicial Activism The Vodafone judgment on Transfer pricing created negative investment
sentiments in India and though it was a laudable decision, it affected foreign investment
GS

flow in India.
c) Corruption and scams including 2G, Coal gate and their indictment by the CAG also
created situation where government was always in defence mode could not take tough
decisions.
Such environment lead to erosion in confidence among the domestic corporate sector and
foreign investors, as a result, there was reluctance in investing in new plants and thus, not
enough employment was generated.
It also affected the efficiency and ICOR increased during this period, which means the
productivity and export competitiveness fell during the period and no wonder country had
to face a semi-currency crisis in 2012-13.
Similarly, government also ran huge fiscal deficit, which added to the inflation and further
eroded the investors confidence.
Increased inflation with falling incomes also lead to a huge decline in savings and investment
ratio. Indias savings and investment was 36.8% and 38.1% of GDP, respectively, in FY08.
In FY13, the overall savings rate dropped to 30.1% of GDP and investment to 34.8% of GDP.
This also shows an increase in the viability gap and further dependence on foreign capital.
[24] Hints: Indian Economy
10. Success of the 'Make-in-India' initiative would depend on the ability to attract investments
- both domestic and foreign - into the sector. In this context elaborate the major challenges
faced by Make in India initiative and also suggest some measures to overcome these
challenges.
Hints:
Make in India was launched in Sept 2014 to offer red carpet to investors from India and
abroad to invest in India and make the country a manufacturing hub.
It was launched because without focusing on manufacturing sector i.e. industrialization,
India cant sustain 7%+ growth; Job creation; Increasing Exports; and cannot attract FDI.
Challenges in attracting investment are:
a. Problems in India
i. Tax terrorism Unfriendly tax regimes. One Vodafone case is enough to make
oversees investors shy away; non-implementation of GST

E
ii. Infrastructural constraints i.e. poor transportation, electricity

OR
iii. Archaic labor laws Have proved a strong deterrent for any overseas company to
set shop in India.
iv. Land acquisition problem couple with environmental problem
v. No fast track approvals i.e. red tapism, no single windo clearance
vi. Difficulty of exit,
SC

vii. Lack of skill Acc. to eco survey 2014-5, only 2% of workers have any formal skill
training.
b. Investing countries side reasons
i. Developed countries are also realizing how crucial local manufacturing is to jobs,
so there is an attempt to reverse outsourcing and revive local manufacturing.
GS

ii. European countries are investing less due to euro crisis


These challenges can be overcomed by:
a) Increasing FDI cap (recently FDI cap increase in railways to 100%; In defense to 49%;
In insurance to 49%)
b) Invest India cell has been set up by government to act as a first reference point for
guiding investors with respect to regulatory & policy issues and to assist in getting
license
c) Home ministry has been asked to give all security proposals to investment within 3
months.
d) States and central department has taken steps to simplify & rationalize environment like
online filing of tax return, etc
e) Labor reforms undertaken partially; more in the pipeline.
f) Proper implementation of Skill India mission.

Hints: Indian Economy [25]


GS Mains Paper-3 Workbook

INDIAN ECONOMY - III


Practice Questions

Q1. Critically analyse the recommendations of the Shanta Kumar Committee report regarding
reorientation and restructuring of the role of FCI.

Q2. The commodities market is set to see a complete makeover with the merger of its
regulator, Forward Markets Commission (FMC), with SEBI. In this context elaborate the
major benefits from this proposed merger?

E
Q3. Compare the different delivery mechanism - "PDS, Food Coupons and Cash transfers"
OR
for providing food security to vulnerable section of the society.

Q4. What is the stipulated role of MUDRA bank; how it has addressed the issues of
microfinance industry and users in India?

Q5. Why entrepreneurship is considered as one of the most important focus area for
SC

employment generation and development. Discuss the recent measures taken by


government?

Q6. Why PPP has not been successful in case of development of railway infrastructure,
while the same model did well for highways? Analyze with suitable examples?
GS

Q7. What is the difference between a Maharatna, Navratna, and Miniratna company? How
the status does help these companies in their day-to-day working?

Q8. Illustrate the meaning of merit and non-merit subsidies with respect to Indian
Agriculture? Critically analyze why the non-merit subsidies must be phased out slowly?

Q9. The MSP in India is not decided by technocrats and policy-makers, but by politicians
with an attempt to appease the farmer community. Analyze the impacts of this policy?

Q10. Discuss the state of 3rd generation financial reforms in India, what are major objectives
of these and how many of these have been implemented?

[26] Indian Economy


GS Mains Paper-3 Workbook

Answer

1. Critically analyse the recommendations of the Shanta Kumar Committee report regarding
reorientation and restructuring of the role of FCI.
Hints:
A High level Committee report (HLC) on the procurement and storage of food grains by FCI
and its distribution through the PDS system, confirms that the practices of FCI so far were
not only ineffective and incompetent in meeting their objectives, but also a huge wastage of
government money.
Flaws of the existing FCI practices as highlighted by the HLC are:
a) About 47% of the foodgrains released from the FCI warehouses find leakages into some
other destinations.
b) A staggering amount of food grains procured by FCI get wasted every year due to poor
storage practices and lack of sufficient space in warehouses. The FCI failure to sell these
excess of grains on time in open markets or through exports results in rottening of grains
and infestation by pests, making them fit for nothing.
c) Only a meager of 6% farmers get the benefit of MSPs procurement by FCI and other
government agencies.
Key Recommendations made by the committee are:
a) FCI should hand over all procurement operations of wheat, paddy and rice to Andhra
Pradesh, Chhattisgarh, Haryana, Madhya Pradesh, Odisha and Punjab as they have sufficient
experience and reasonable infrastructure for procurement.
b) FCI procurement should focus on eastern belt, where farmers do not get minimum support
price.
c) FCI should outsource its stocking operations to various agencies such as Central Warehousing
Corporation (CWC), State Warehousing Corporation (SWC), Private Sector under Private
Entrepreneur Guarantee (PEG) scheme. It should be done on competitive bidding basis,
inviting various stakeholders and creating competition to bring down costs of storage.
Movement of grains should be containerized in order to reduce transit losses. While, railways
should have faster turn-around-time by having more mechanized facilities.
d) The report is critical of the MSPs that the government fixes on food grains every year for
providing better income to farmers on selling their produce. It not only shoots the price of food
grains and create distortions in the market, but is largely responsible for the high inflation over
the years. Instead, it suggests the government to provide a direct cash subsidy to the farmers
through Jan Dhan Yojana on various agricultural items used in productions including pesticides
and let farmers sell their grains at the market price. It would help to rein in inflation.
Hints: Indian Economy [27]
e) It desist the FCI from making purchases of grains beyond its buffer stocks until it achieves
improvements in its storage practices and capacity by constructing more all seasoned
warehouses and silos and incorporating some of the best modern practices of storing food
grains.
However, there are some criticism against the report, those include
a) The above measures are likely to impact the food security targets under MDG and other
welfare objectives.
b) Similarly such steps would leave farmers on the mercy of market forces. Earlier also commodity
trade has only increased inflation and not helped farmers as expected at the time of
introduction.
Despite these fears, it is necessary to carry out PDS reforms and bring efficiency in the
system. These steps can save government Rs 36,000 crore every year in this difficult time
of global economic situation and also help solve the dispute that the government has
with international communities in WTO over its food procurement programme.
2. The commodities market is set to see a complete makeover with the merger of its regulator,
Forward Markets Commission (FMC), with SEBI. In this context elaborate the major benefits
from this proposed merger?
Hints:
Forward Markets Commission (FMC) is the chief regulator of commodity futures markets in
India. It was setup in 1953. In the aftermath of NSEL scam, FMC was brought under the
Finance Ministry in 2013.
The functions of the Forward Markets Commission are as follows:
a) To advise the Central Government in respect of the recognition or the withdrawal of
recognition from any association or in respect of any other matter arising out of the
administration of the Forward Contracts (Regulation) Act 1952.
b) To keep forward markets under observation and to take such action in relation to them, as
it may consider necessary, in exercise of the powers assigned to it by or under the Act.
c) To collect and whenever the Commission thinks it necessary, to publish information
regarding the trading conditions in respect of goods to which any of the provisions of
the act is made applicable, including information regarding supply, demand and prices,
and to submit to the Central Government, periodical reports on the working of forward
markets relating to such goods;
d) To make recommendations generally with a view to improving the organization and
working of forward markets;
e) To undertake the inspection of the accounts and other documents of any recognized
association or registered association or any member of such association whenever it
considers it necessary.
It allows futures trading in 23 Fibers and Manufacturers, 15 spices, 44 edible oils, 6
pulses, 4 energy products, single vegetable, 20 metal futures, 33 others Futures.
Ever since the government approved online futures trading in commodities in 2003, there have
been several committees (Percy Mistry committee in 2007, FSLRC etc)) that recommended the
merger of commodity market regulator Forward Markets Commission (FMC) with capital
market regulator Securities and Exchange Board of India (SEBI). Finally in Budget, 2015 finance
minister announced that Forwards Markets Commission will be merged with SEBI
[28] Hints: Indian Economy
Benefits of the merger

a) Stock exchanges will be able to become universal exchanges wherein equities, debt
instruments and currencies are traded under the same roof as commodity derivatives.
Stock exchanges already have depositories and clearing corporations that will cater to
the needs of commodity traders as well.

b) It will strengthen regulation of commodity forward markets will make it easy for SEBI
to track money movements better in financial markets.

c) It will reduce wild speculation.

d) Convergence of securities, commodities and currency trading will boost financial markets
in India.

e) The SEBI-FMC merger will bring down transaction costs in stock and commodity markets.

f) Currently, a broking company operating in stock market can not apply for a membership
in MCX or NCDEX in the same name and cive-versa. There is no reason why a single
company cannot be given memberships in equity, commodity and currency exchanges
in India. The SEBI-FMC merger would wipe off such anomalies. This would in turn
immensely help financial markets in India grow mature, stable and steady.

g) It will provide enormous opportunities: investment derivatives such as exchange traded


funds for silver and other metals, weather and freight derivatives, and index futures
and options trading in commodities.

h) It will offer arbitrage opportunities across segments in an exchange, and make margin
money fungible for trading across various asset classes like commodities, currencies and
equities.

3. Compare the different delivery mechanism - "PDS, Food Coupons and Cash transfers" for
providing food security to vulnerable section of the society.

Hints:

The World Food Summit of 1996 defined food security as when all people at all times have
access to sufficient, safe, nutritious food to maintain a healthy and active life. It involves
strengthening the livelihood security of all members within a household by ensuring physical
and economic access to balanced diet including the needed micronutrients, safe drinking
water, and environmental sanitation, basic health care and primary education.

There are three delivery mechanisms - PDS, Food Coupons and Cash transfers for providing
food security to vulnerable section of the society.

The recent National Food Security Act aims to make the right to food a statutory right. It
proposes to use the existing Public Distribution System (PDS) to deliver foodgrain to 75% of
the rural and 50% of the urban population.

However each method of delivery would have its own implications, financial and otherwise.
The table below compares these methods of delivery

Advantages and disadvantages of PDS, Food Coupons and Cash transfers and other delivery
mechanisms
Hints: Indian Economy [29]
4. What is the stipulated role of MUDRA bank; how it has addressed the issues of microfinance
industry and users in India?
Hints:
The main of the MUDRA (Micro Units Development and Refinance Agency Bank) Bank is
to empower the small micro business. This business will help grow the economy of the
country. Small entrepreneurs, when are helped to grow, helps the economy to grow along
with them.
The reason for this scheme to get into action is that the current remote entrepreneurs are
unable to get money from the institution. These people get their finance from money lenders
at a very high interest rate, which in return effects the growth of the micro business.
[30] Hints: Indian Economy
The biggest bottleneck to the growth of entrepreneurship in India the poor SME support
system. Overall, the non-corporate small business sector lacks not only financial support, but
also the draconian labour laws.

Role of MUDRA

The main objective of the committee is to build a suitable system to grow these businesses
by providing finance.

These banks are also to setup a good method of using the last-mile credit agent scheme
system to small and micro business.

Another important objective of the bank is to make a good credit guarantee system so that
the money is not loaned to a person who will go into debts and later becoming a liability
to the government.

The committee will also be guiding the person in order to ensure that his business won't be
a failure.

Registering all the Microfinance Institutions and agencies to evaluate the performance rating
and later accreditation for the first time.
Mudra Bank will ensure clients are properly protected and will lay down principles and
methods of loan recovery in case of a default.
Schemes Offered by MUDRA Bank

Currently the scheme will be offering three types of loan divided in three segments known as the
starters, the mid-stage finance and next level growth seekers. The three loans that are provided by
the MUDRA bank are as follows:

Shishu- this is the scheme for starters and will be lending the amount of Rs. 50,000
Kishor- this scheme is for the mid-level organization and will be lending amount from the
Rs. 50,000 to Rs. 5 Lakh
Tarun- This is the scheme for the next level organization helping them to grow. This will
cover loan from Rs. 5 lakh to Rs. 10 lakh.

The scheme will help empower the small business and is surely to help Indian economy grow along
with entrepreneurs.

5. Why entrepreneurship is considered as one of the most important focus area for employment
generation and development. Discuss the recent measures taken by government?

Hints:

Entrepreneurship is basically the practice of starting a business in order to earn profit on new
found opportunities. It is a challenging task as many businesses which start fail to take off.

Entrepreneurship has many uncertainties, especially when new products are created for
which there is no existing market. Entrepreneurship affects economic growth in various
ways and employment generation and innovation are most important of those.

New firms not only bring new ideas, but they also have lower hierarchies compared to old
established firms. This encourages labour and increases productivity.
Hints: Indian Economy [31]
Entrepreneurship converts a job seeker into job provider and thus, boosts the job availability,
especially in new technology and domains. Thus, net new jobs are added as they do not
replace old firm in equal measure and add to the number of firms and industries.
MUDRA bank is major initiative taken by Government to boost entrepreneurship. As it will
ensure financial availability for budding entrepreneurs and help them setting up business
and will provide partial insurance cover over losses.
Similarly pushing ahead with the ambitious Skill India mission, the government has launched
a number of initiatives aimed at developing skills and promoting entrepreneurship among
youth. These include a redesigned Model Skill Loan Scheme, Skill Card for persons certified
under Pradhan Mantri Kaushal Vikas Yojana and the new National Policy for Skill
Development.
6. Why PPP has not been successful in case of development of railway infrastructure, while
the same model did well for highways? Analyze with suitable examples?
Hints:
Physical infrastructure, such as roads, water and sanitation networks, and transportation
systems, involve large investments that can put a strain on the public purse. This strain is
especially great for countries, such as India, whose economies is undergoing rapid
development and urbanization and has a great need for expanded infrastructure.
Public-private partnerships (PPPs) are increasingly being used by governments and public
sector authorities throughout the world as a way of increasing access to infrastructure
services for their citizenry and economies at a reduced cost.
In Indian context, PPP means an arrangement between a government or statutory entity or
government owned entity on one side and a private sector entity on the other, for the
provision of public assets and/ or related services for public benefit, through investments
being made by and/or management undertaken by the private sector entity for a specified
time period, where there is a substantial risk sharing with the private sector and the private
sector receives performance linked payments that conform (or are benchmarked) to specified,
pre-determined and measurable performance standards.
The PPP model has not been successful in Railways, because of three major issues:
Too much interference of politicians, as railways is used for populist sentiment. This
drives the profits down and forces operator to adopt some of the inefficient practices.
Very long gestation period, while infrastructure projects generally have very long
gestation period, railways is much longer than them. Most private companies don't
want to work in such uncertain environment as profit can't be predicted for too
foreseeable a future.
BoT model that worked in case of highways is not possible for railways as railways can't
work in multi-fare format. Neither a differential fare policy possible given the political
scenario and similarly, nor a toll can be levied.
Very few railway PPP projects have been signed so far and all of them have been in the area
of freight and commercial lines around ports or some sections in dedicated western freight
corridor. But, response is still far from encouraging and even 10% of targeted investment
couldn't be met in 12th FYP. One of the few successful projects is Pipavav railways in
Gujarat, which was developed for a modernization of pipavav port. Even this project had
to face too many problems and red tapesim and took double time then stipulated.
[32] Hints: Indian Economy
7. What is the difference between a Maharatna, Navratna, and Miniratna company? How the
status does help these companies in their day-to-day working?
Hints:
Various PSUs have been awarded additional financial autonomy. These are public sector
companies that have comparative advantages, giving them greater autonomy to compete in
the global market so as to "support them in their drive to become global giants".
Financial autonomy was initially awarded to nine PSUs as Navratna status in 1997. In 2010,
the government established the higher Maharatna category, which raises a company's
investment ceiling from Rs. 1,000 crore to Rs. 5,000 crore. The Maharatna firms could now
decide on investments of up to 15 per cent of their net worth in a project while the Navaratna
companies could invest up to Rs. 1,000 crore or 15% of their net worth on a single project
or 30% of their net worth in the whole year (not exceeding Rs. 1,000 crores).
Miniratna have two tiers, while Miniratna I can invest up to Rs. 500 crore or equal to their
net worth, whichever is lower; the Miniratna II can invest up to up to Rs. 300 crore or up
to 50% of their net worth, whichever is lower.
Advantages:
Grating of status allows company to hire more independent directors at subsequent stage,
which increases its professionalism and frees it from bureaucratic setting.
There is larger autonomy in day to day business and most decisions do not require ministry's
pre-approval, which saves time and cost.
Financial independence allows company to plan their investment in advance, as compared
to a case where the company is required to seek approval each time and most decisions are
taken by the time profit or returns have already exhausted.
Granting status allows healthy competition among companies to do well and achieve better
status and thus autonomy. this spirit helps in growth.
8. Illustrate the meaning of merit and non-merit subsidies with respect to Indian Agriculture?
Critically analyze why the non-merit subsidies must be phased out slowly?
Hints:
Subsidies can correct for the under-consumption of goods with positive externalities. With
the social benefits of a particular service or commodity exceeding the aggregate of private
benefits to individual consumers, market solutions result in under-consumption and subsidies
can make the necessary correction.
However, the benefits can be maximized only when the subsidies are transparent, well
targeted, and suitably designed for effective implementation without any leakages. All subsidies
should be targeted sharply at the poor and the truly needy like small and marginal farmers,
farm labour and urban poor.
Major non-merit farm subsidies include,
a. Under Nutrient Based Subsidy scheme, the prices of all fertilizers except urea are
almost decontrolled. Urea prices are governed by New Pricing Scheme-III (NPS-III). Due
to this urea is the most consumed fertilizer. It leads to Unbalanced use i.e. even in areas
which requires potash as nutrient we apply urea, which is a major source of nitrogen
which affects productivity.

Hints: Indian Economy [33]


b. In case of major irrigation (canals) then there are no maintenance charges and in case
of minor irrigation i.e. tube-wells then electricity is provided at subsidized rate and
sometimes even free. It leads to over-exploitation of groundwater which in turn leads
to lowering of ground water table; leads to water-logging and consequent salinity.
Similarly, a few merit subsidies would include, soil and water conservation, agricultural
research and education, flood control and drainage, as these benefit the needy and non-
needy alike and non-needy sections can't take undue advantages of such subsidies.
Thus, from above discussion it is clear, how subsidies distort markets, price, and usage of
resources. Also the benefit of subsidy goes to more affluent ad rich farmers and not to small
and marginal farmers as they can only have access to tube-wells; Price subsidies in electricity
can only benefit the (relatively wealthy) 67.2 percent of household that are electrified.
Further these contributes to high fiscal deficit -In 2014-5, our fertilizer subsidy bill alone was
Rs 70,000 crore. We must slowly phase them out and replace them with other mechanisms
such as direct cash transfer to the needy farmers. For better targeting JAM Number Trinity-
Jan Dhan Yojana, Aadhaar and Mobile numbers- solution could be explored which will
allow the state to offer this support to poor households in a targeted and less distortive way
9. The MSP in India is not decided by technocrats and policy-makers, but by politicians with
an attempt to appease the farmer community. Analyze the impacts of this policy?
Hints:
The MSP is used as a tool to incentivize farmers to produce food grain and help them during
periods of crop failure. However, like all other social sector spending, it has become a tool
to appease farmers as their votes influence the final election outcome.
While MSPs are supposed to be used as a tool to compensate farmers in particular during
periods of stress like dough and/or flood; which means that during normal periods, MSPs
ought to be lowered or even suspended). However, in reality MSPs in India have always
moved in one direction, which is upwards.
The continuous uptrend in MSPs creates market distortions. There has never been even a
single instance when specific hikes in MSPs, say for drought relief, or as bonuses to meet
specific procurement targets etc., were withdrawn the subsequent year. Rather, these act as
a floor for prices that year.
From financial year 2007 onward, a substantial hike in MSPs was announced for paddy rice
and wheat and this was followed by steep across-the-board hikes the year after. From then
on, MSPs have been rising very fast. While, between 1998-99 and 2006-07, the MSPs have
increased between 3.1% and 4.2% p.a., they rose by between 9.3% and 15.7% p.a. over
2006-07 and 2013-2014.
Consider for example, rice and wheat subsidies. The government provides both producer
and consumer subsidies totaling about Rs. 125,000 crore. Wheat and rice are procured from
farmers at guaranteed above-market minimum support prices (MSPs - Rs. 14/kg of wheat,
Rs. 13.6/kg of rice). Which was even higher than the prevailing market price and determined
the floor market price.
This also meant that any type of grain, whether stale, inferior quality, or pest ridden, would
sell at this price only instead of going into cattle feed at lower prices. This has also pushed
up the cattle feed price too.
[34] Hints: Indian Economy
High MSPs induce distortions, some of which ultimately hurt the poor, apart from obvious damage
to the exchequer, in following ways:
High MSPs result in farmers over-cultivating rice and wheat, which the Food Corporation
of India then purchases and houses at great cost.
High MSPs also encourage under-cultivation of non-MSP supported crops. The resultant
supply-demand mismatch raises prices of non-MSP supported crops and makes them more
volatile.
High MSPs and price subsidies for water together lead to water-intensive cultivation that
causes water tables to drop, which hurts farmers, especially those without irrigation facilities
and infrastructure.
10. Discuss the state of 3rd generation financial reforms in India, what are major objectives
of these and how many of these have been implemented?
Hints:
The objective of the 3rd Generation Reforms is to resolve the issues that the financial sector faces as
of now.
First, India's financial system is not providing adequate services to the majority of domestic
retail customers, small and medium-sized enterprises, or large corporations. Government
ownership of 70 percent of the banking system and hindrances to the development of
corporate debt and derivatives markets have stunted financial development. This will inevitably
become a barrier to high growth.
Second, the financial sector-if properly regulated but unleashed from government strictures
that have stifled the development of certain markets and kept others from becoming
competitive and efficient-has the potential to generate millions of much-needed jobs and,
more important, have an enormous multiplier effect on economic growth.
Third, in these uncertain times, financial stability is more important than ever to keep
growth from being derailed by shocks hitting the system, especially from abroad. Although
the Indian economy dodged the Asian crisis and the recent subprime crisis, a lot remains to
be done to secure the stability and durability of the financial system.
Many of the reforms are intertwined. For instance, it makes sense to level the playing field
between banks and non-bank financial corporations by easing the requirement that the
former finance priority sectors and the government.
But making these changes while the government continues to have huge financing needs
and without having a more uniform and nimble regulatory regime could be dangerous.
The connections, which stretch beyond just financial reforms to broader macroeconomic
reforms, can in fact have a positive effect by reinforcing the effects of individual actions.
For instance, the process of removing restrictions on capital flows could serve as an adjunct
to other reforms if handled adroitly. Allowing foreign investors to participate more freely in
corporate and government debt markets could increase liquidity in those markets, provide
financing for infrastructure investment, and reduce public debt financing through banks.
India's rich and complex political process being what it is, focusing solely on the big picture
could bog down progress. A hundred small steps, many of them less controversial, but still
requiring some resolve on the part of policymakers, could get the process of reforms going
and build up momentum for the bigger challenges that lie ahead.
Hints: Indian Economy [35]
For instance, converting trade receivable claims to electronic format and creating a structure
to allow them to be sold as commercial paper could greatly boost the credit available to small
and medium enterprises.
It is believed that if other policies are in sync, financial sector reforms could add significantly
to economic growth and also make a major contribution to the sustainability of this growth,
in both the economic and political dimensions.

[36] Hints: Indian Economy


GS Mains Paper-3 Workbook

INDIAN ECONOMY - IV
Practice Questions

Q1. Explain how India has moved from central planning to indicative planning; also discuss
the reasons behind such a shift? Is NITI Aayog more compatible to this mode of planning
as compared to planning commission?

E
Q2. What is the difference between Free Trade Agreement, Comprehensive Economic
Cooperation Agreement (CECA) and Comprehensive Economic Partnership Agreement
(CEPA)? How have such arrangements helped the Indian economy to reap the benefits
of globalization?

OR
Q3. The high level of subsidies provided to agriculture sector and various welfare programmes
by the Indian government is a big leakage from the government exchequer that impairs
the abilities of the government for fiscal consolidation on the one hand and create
SC
productive assets and infrastructure on the other. Comment.

Q4. Enumerate the measures initiated by the government of India to reap the demographic
dividend.

Q5. What are the main features of Bharatiya Mahila Bank? Is such an institution desirable
GS

when we are making an equal opportunity society? Give reasons in favour of your
opinion.

Q6. What are the main constraints in the conclusion of the Doha round of the WTO? It is
often alleged that emerging economies, especially India and China have impeded the
process of multilateralism in the WTO. Do you agree and why?

Q7. Enumerate the recent measures which government of India has initiated for financial
inclusion. Also, critically evaluate the recommendations of Nachiket Mor Committee on
financial inclusion.

Q8. What are the objectives of buffer stock policy? Has the policy been effective in inflation
control and uninterrupted supply of food grains to the people of the country?

Q9. Explain and elaborate the backward and forward linkages of food processing industry
in promoting rural development.

Q10. What are the main components of land reforms? Enumerate the major difficulties in
land reforms in India and suggest measures to remove these.

Indian Economy [37]


GS Mains Paper-3 Workbook

INDIAN ECONOMY - IV
Answer

1. Explain how India has moved from central planning to indicative planning; also discuss the
reasons behind such a shift? Is NITI Aayog more compatible to this mode of planning as
compared to planning commission?
Hints:

E
Post independence, there was a system of authoritative/imperative planning in India. Under
this detailed policy was set with precise estimates of output, production and investment;

OR
with government directing both the public & private sector substantially.
But post 1990's with the launch of 8th 5YP we moved to indicative planning. Under this
only a broad framework is given instead of precise targets set and government follows a
policy of persuasion and encouragement with private sector to achieve broad goals.
The indicative machenism works through monetary and fiscal policy tools, where in they are
SC

used to determine the interest level, price level, and public sector investment in the economy,
which further affects the inflation, employment, and private sector investment and thus,
helps government to achieve its target.
Reasons
i. Imperative planning failed to achieve growth as well as distribution
ii. In era of liberalization and globalization with too much uncertainty, one can't set too
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long term target


iii. Huge role of private sector, as state doesn't have much money to invest, so the state can
only persuade, not compel it.
Now it is argued that in the background of this shift, whether there was a need for an apex
planning body with over-riding power or not. However, despite increasing space for private
sector, the public sector and planning still has relevance.
a) We are lagging behind in social indicators like health, education, and basic infrastructure,
which can't be left to private sector. And this requires states intervention and this
further increased with the inclusive growth agenda.
b) State role in achieving growth has reduced but has a major role in distribution of
resources.
c) We still have a strong public sector which can be seen by presence of many profitable
PSU's.
Thus we definitely need a planning body, but not with an overriding powers which erodes
state governments autonomy and sets precise target. And in this background NITI Aayog
has rightly replaced the planning commission which has the task of
[38] Hints: Indian Economy
a) Setting national agenda in consultation with states.
b) To develop mechanisms to formulate "plans at the village level" and aggregate these
progressively at higher levels of government.
c) Acting as a Resource Centre which will act a repository of research and best practises
on good governance.
d) To provide advice and encourage partnerships between key stakeholders and national
and international like-minded Think Tanks, as well as educational and policy research
institutions.
NITI Aayog will seek to facilitate and empower this critical requirement of good governance,
which is people-centric, participative, collaborative, transparent and policy-driven. It will
provide critical directional and strategic input to the development process, focusing on
deliverables and outcomes but the centralization of economic powers may be carried further
forward under NITI AAYOG.
2. What is the difference between Free Trade Agreement, Comprehensive Economic Cooperation

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Agreement (CECA) and Comprehensive Economic Partnership Agreement (CEPA)? How
have such arrangements helped the Indian economy to reap the benefits of globalization?
Hints:
OR
Free Trade Agreements (FTAs), Comprehensive Economic Cooperation Agreement (CECA) and
Comprehensive Economic Partnership Agreement (CEPA) - all three are essentially a part of
'Generalized System of Preferences (GSPs)' strategy under World Trade Organization (WTO)
agreements. GSP provision is an exception in Most Favoured Nation (MFN) system of WTO. This
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allows a country to offer preferential treatment to selected developing countries and free trade area
partner countries, in contrast of MFN.
Though these are very similar concepts, but a modest difference can be established in terms of their
objectives, structures, and functioning.
CEPA and CECA are wider terms of FTA in all essence.
While FTA does not comprise services, CEPA and CECA are much more comprehensive and
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contain very wide aspects of trade and cooperation aspects such as goods, services, and
investments and even Intellectual Property (IP) protection issues.
Also, where FTA can be signed with two or more than two countries, CECA and CEPA are
necessarily bilateral trade agreements.
CECA and CEPA are different from each other only in terms of trade liberalization conditions.
CECA mainly address the tariff bottlenecks while the CEPA has been envisaged to address
tariff as well as non-tariff barriers. CEPA also includes the commitments related to trade
promotion. Thus, it is far more comprehensive than FTA and CECA.
Multilateral trade agreements have become too complex and global trade negotiations are moving
at very slow speed, for e.g. Doha Round. Thus, in such scenario, regional or bilateral trade negotiations
such as FTA, CECA, or CEPA have become very crucial not only for India's growth, but also for
regional economic development and prosperity.
Along with slow moving global trade negotiations, international trade governing bodies such as
WTO, IMF etc. are becoming weak day by day due to various structural bottlenecks and the lack of
internal democracy. This also provides necessary impetus to India to strengthen regional economic
integration. On accounts of strong bilateral or regional trade arrangements India can withstand
any adverse move in international trade governing institutions. Presently India has FTAs and PTAs
Hints: Indian Economy [39]
with the following countries and groups. Empirical analysis show that trade has grown at an
increased rate after the implementation of such agreements; while for the safeguard of domestic
markets on both the sides an agreement specific negative list as well as anti-dumping provisions are
there,
India - ASEAN CECA- Services and Investment Agreement (Brunei, Cambodia, Indonesia,
Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam)
India - Sri Lanka CEPA
India - Thailand CECA
India - Mauritius CECPA
India - EFTA BTIA (Iceland, Norway, Liechtenstein and Switzerland)
India - New Zealand FTA/CECA
India - Israel FTA

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India - Singapore CECA (under Review)
India - Southern African Customs Union (SACU) Preferential Trade Agreement (PTA) (South

OR
Africa, Botswana, Lesotho, Swaziland and Namibia)
Indian - MERCOSUR PTA (Argentina, Brazil, Paraguay and Uruguay)
India - Chile PTA
BIMSTEC CECA(Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan and Nepal)
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India - Gulf Cooperation Council (GCC) Framework Agreement (Saudi Arabia, Oman, Kuwait,
Bahrain, Qatar and Yemen.)
India - Canada CEPA
India - Indonesia Comprehensive Economic Cooperation Agreement (CECA)
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India-Australia CECA
India can leverage these arrangements to strengthen bilateral relationships and people to people
contacts with interested countries. In long term, these partnerships would be very crucial for
sustainable economic growth of India.
In age of globalization, where fierce competition for investment inflows is evident around the
world, these arrangements present golden opportunities to reap maximum benefits from globalization
in terms of maximum investment inflows, greater exports and large employment generation for the
country.
3. The high level of subsidies provided to agriculture sector and various welfare programmes
by the Indian government is a big leakage from the government exchequer that impairs the
abilities of the government for fiscal consolidation on the one hand and create productive
assets and infrastructure on the other. Comment.
Hints:
Subsidies are government assistance to various sectors and individual households for the welfare
and development. In a highly unequal society marked by vicious circle of poverty like India subsidies
play a very important role in meeting the minimum basic needs of life such as nutrition, education,
health, housing etc at an affordable price.
[40] Hints: Indian Economy
Overtime, however, subsidies in India have increased to a level that is unsustainable given the
resources of the government. The major subsidies in India viz., food, fertilizer and fuel subsidies
stand close to Rs. 2,00,000 crore. If all the subsidies are added up together, then the value of subsidies
stands at about 5 per cent of GDP of India. The total expenditure of the Central government is close
to Rs. 12,00,000 crore vis--vis a total revenue of about Rs. 5,50,000 crore. Subsidies, therefore, are
undoubtedly one of the main leakages from the government exchequer. The Non-plan expenditure
of the Central government has remained close to 70 per cent of total expenditure, leaving only 30
per cent for plan expenditure.
There are studies which show that there is positive impact of subsidies on agricultural production
and productivity. But it is contended that productivity and production gains are limited to certain
regions and the impact has been not commensurate. Alternatively, if the amount spent on subsidies
would have been used to develop rural infrastructure, power, irrigation, extension services,
warehousing and marketing the outcomes would have been much better. Subsidies are like social
consumption of resources without creating durable assets whereas creation of infrastructure has
the potential to provide sustainable employment and enhance production and productivity.

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There is no doubt that subsidies are a major burden on the budget. Fiscal consolidation would
require that non-plan expenditure, especially poorly-targeted, populist, irrational, and wasteful
subsidies are reduced. Government has a medium term target to reduce subsidies below 2 per cent

OR
of GDP for fiscal consolidation. But it will be erroneous to say that entire non-plan expenditure is
non-development expenditure, because they create domestic demand for goods and services that
push up GDP growth. Kelkar committee had also warned that fiscal consolidation should be led by
revenue increase rather than expenditure cut because the latter is recessionary.
As far as creation of infrastructure is concerned government should increase its spending, promote
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PPP model and foreign investment wherever possible with adequate regulation. Resources are not
a unique problem for India in case of developing infrastructure. We can take a clue from China and
other emerging economies how they have mobilized internal and external resources for the
development of infrastructure.
There is no justification for subsidies and free lunches because these are dead weight burden on the
government budget. It is better to empower people by creating infrastructure, skill formation and
creating income generating opportunities by using the scarce resource. If need be user charges
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should be introduced to conserve precious resources and their optimum use.


4. Enumerate the measures initiated by the government of India to reap the demographic dividend.
Hints:
India with a large and young population has a great demographic advantage. The average age of
the 125 billion-strong Indian population will be 29 years in 2020, even younger than the 37 years of
China and the US. The proportion of working-age population is likely to increase from approximately
58 per cent in 2001 to more than 64 per cent by 2021, adding about 63.5 million new entrants
between 2011 and 2016 with a large number of young persons in the 20-35 years age group. This is
a great opportunity for India.
Taking advantage of such an opportunity is contingent upon progress on the human development
front as well as availability of productive employment, which crucially depends on industrial
growth led by the manufacturing sector. This will also need diversification of the agricultural
sector and enhancing productivity of the sector. Further, the rural sector will have to create
employment in the non-farm sector. India has to provide quality education and develop the skills
of its large young population to fully reap the benefits of the demographic dividend. Currently,
many programmes are being implemented both in elementary and secondary education and
higher and technical education.
Hints: Indian Economy [41]
Higher and technical education
A new mission mode scheme called Rashtriya Uchchatar Shiksha Abhiyan (RUSA), which will
focus on access, equity, quality, and innovation through creation, expansion, and consolidation of
institutions, research, and innovation and will have norm-based funding, has been launched for
strengthening and reforming higher education. During the Twelfth Plan, RUSA will create 80 new
universities by converting autonomous colleges/colleges in a cluster to state universities, besides
creating other related infrastructure.
Technical Education Quality Improvement Programme (TEQIP) Phase II, a four-year programme,
is currently being implemented with the assistance of the World Bank, covering about 200 institutions
based on competitive funding. A total of 187 institutions have been selected under TEQIP.
Apart from the above mentioned specific programmes for higher and technical education,
government is continuing various programmes to promote primary and secondary education. Some
of such important programs are: Sarva Shiksha Abhiyan (SSA); Mid-Day Meal (MDM) Scheme;
Rashtriya Madhyamik Shiksha Abhiyan (RMSA); Model School Scheme (MSS); and Saakshar Bharat/
Adult Education, among others. All these programs are targeted at universalization of school

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education India and targeted to specific needs of different groups.
Apart from these a number of skill development programs have also been started to address the
OR
needs of technicians in the manufacturing and construction sector. The National Vocational
Education Qualification Framework (NVEQF) has been aligned to the National Skill Qualification
Framework (NSQF) to standardize skill learning outcomes and provide mobility. As of now, 287
new polytechnics have been established under its sub-mission on polytechnics and 457 existing
polytechnics have been provided financial assistance. In 2012-13, 2.07 lakh persons have been
trained through polytechnics and 3.5 lakh persons have been trained in four regional boards of
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apprenticeship during the last five years.


5. What are the main features of Bharatiya Mahila Bank? Is such an institution desirable
when we are making an equal opportunity society? Give reasons in favour of your opinion.
Hints:
In Budget 2013-14, the Finance Minister had announced setting up of all-women bank with an
initial capital of Rs. 1,000 crore. The move to set up Bharatiya Mahila Bank is aimed at encouraging
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women in general and women Self Help Groups (SHGs) in particular. Even though the bank made
its debut in metros, it was scheduled to enter rural areas before March 2014. It will focus on centers
where working women population is significant. Major features of all women bank
Headquartered in Delhi, the bank proposes to have 25 branches by March 31, 2014. So, after
starting with one branch in each banking region, the bank will expand to 500 branches by
the fourth year of operation, which is when it sees operations becoming profitable.
Even though the bank will focus on lending predominantly to women, there will be no
restriction on account opening (deposits) by men. As deposits will flow from anyone, but
lending will be targeted at women. It will lend to women or to businesses which are either
managed by or make products for women.
There will also be emphasis on funding for skills developments to help in economic activity.
Moreover, the products will be designed in a manner to give a slight concession on loan rates
to women.
While men may be precluded from taking a loan from it, they have not been left out when
it comes to employment in India's first 'Mahila' (women's) public sector bank. Men account
for about 36 percent of the candidates found provisionally eligible for appointment as
Probationary Officers in the Bharatiya Mahila Bank.
[42] Hints: Indian Economy
One of its primary goals is the financial inclusion of India's unbanked, more specifically,
rural women. Women are the most underutilized economic asset of our country. The bank
would be the foremost provider of banking services to women. This bank's approach will be
to inspire people with entrepreneurial skills. It will tie up with NGOs. It will also locally
mobilize women to train them in vocations like toy-making or driving tractors or mobile
repairs. It will try to reach deeper rural pockets.
However, since country already has many women's cooperative banks and self-help groups with
considerable experience in handling credit issues related to women many a people argued, that the
government would have done better to make gender-neutral public sector banks more financially
inclusive. But, given the state of financial inclusion in India, it seems to be a correct step as according
to a 2012 World Bank study, only 26 per cent of women in India have an account with a formal
financial institution. As per FICCI President Naina Lal Kidwai, 'It is almost impossible for women
to get a loan to set up a service or knowledge company, sectors where they are most likely to start
their business in. There is no doubt women are discriminated against in the loan giving process.
They have to work harder to establish their credibility as entrepreneurs' a bank for women will also
help empower them further, because it will lend only to women and will employ mostly women.

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We not only need to make existing institutions more inclusive and accessible for women, but also to
create special institutions for them.
6.
OR
What are the main constraints in the conclusion of the Doha round of the WTO? It is often
alleged that emerging economies, especially India and China have impeded the process of
multilateralism in the WTO. Do you agree and why?
Hints:
The Doha Round of WTO negotiations are called Doha Development Round, because when this
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round started in 2001 at Doha (Qatar), it was decided, under the pressure created by India, China,
and Brazil along with other developing countries that this round would take care of special concerns
of developing countries while negotiating new issues. The developing countries had expressed many
concerns such as market access, subsidies, services, and issues pertaining to earlier Singapore round.
The developing countries are not at par with the developed countries so far as overall development,
technology, capital and industrialization are concerned. It is therefore, important to appreciate
such differences and constraints and give special and differentiated treatment to the developing
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countries. The developed countries were ready to give such treatment to the least developed economies
but they were not ready to give the same to emerging economies like India, China, and Brazil.
The emerging economies, especially India continues to insist that the Doha Development Round
needs to be sensitive to the needs of the developing countries. Principally India has agreed to accept
one the Singapore issues, viz., trade facilitation, but India wants that its system of keeping food
stocks and distributing it to the poor people on subsidy basis should not come under WTO ambit
because these systems are meant for welfare and not commercial gains. It is also ready to give
market access to agricultural products if the developed nations cut subsidy on their farm products.
Regarding Non-agricultural Market Access (NAMA), the WTO is proceeding towards consensus to
adopt Swiss Formula and India is a party to such consensus being reached. India has also sought an
observer status on the Singapore issue of government procurement and if it feels that being part of
food procurement regulations of the WTO is beneficial for the country, it will go ahead. India,
however, is not ready to relent on tariff barriers, such a sanitary and phyto-sanitary standards,
labour standards and environmental standards etc. Even in services, India is not ready to relent
and open its market as long as the developed countries do not open their services sector for the
developing economies. In the Doha round, the developing countries want to save their own interest
as do the developed countries. Therefore it is not right to say that India and China have impeded
the multilateral body to conclude the round with consensus.
Hints: Indian Economy [43]
7. Enumerate the recent measures which government of India has initiated for financial inclusion.
Also, critically evaluate the recommendations of Nachiket Mor Committee on financial
inclusion.
Hints:
Financial inclusion is an important priority of the government. The objective of financial inclusion
is to extend financial services to the large hitherto un-served population of the country to unlock its
growth potential. Given that just a little over 40% of Indian villages are even connected to a banking
correspondent (BC) network, financial inclusion has not worked so far. There simply hasn't been
enough incentive for banks to increase their networks. Financial inclusion requires that people are
offered platform to save, receive formal credit facilities for productive activities, and are encouraged
for entrepreneurship by removing existing shortcomings and loopholes.
RBI from time to time has been making efforts to ensure the last-mile availability of banking services
to ensure outreach. Similarly simultaneous efforts have been made to simplify procedures and reduce
entry barriers to ensure universal access for educated and illiterate; rich and poor alike. Of the
many schemes and programmes pushed forward by RBI the following need special mention.

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A. Initiation of no-frills account - These accounts provide basic facilities of deposit and
withdrawal to accountholders makes banking affordable by cutting down on extra frills
OR
(such as cheque book, debit card, mobile banking, internet banking, etc) that are of limited
use for the lower section of the society. These accounts are expected to provide a low-cost
mode to access bank accounts. RBI also eased KYC (Know Your customer) norms for
opening of such accounts.
B. Increasing outreach through business correspondents - The banking systems have started
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to adopt the business correspondent mechanism to facilitate banking services in those areas
where banks are unable to open brick and mortar branches for cost considerations. All
habitats of 2000 or more population in India and 1500 in northeastern states have been
provided some form of banking facility.
C. Electronic/Direct Benefits Transfer - To plug the leakages that are present in transfer of
payments through the various levels of bureaucracy, government has begun the procedure
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of transferring payment directly to accounts of the beneficiaries. This 'human-less' transfer


of payment is expected to provide better benefits and relief to the beneficiaries while reducing
government's cost of transfer and monitoring. Once the benefits starts to accrue to the
masses, those who remain unbanked shall start looking to enter the formal financial sector
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. Public sector banks opened
about 8,000 new branches during fiscal year 2013-14.. Similarly, installed ATM machines increased
by 50% to become nearly one lakh during the same period.
Already there is priority sector lending provisions through which the banks provide 40 per cent of
their total outstanding credit to agriculture, small and cottage industries, social sector, and exports.
The outstanding priority-sector advances of public-sector banks showed a growth of 13.4 per cent
during 2012-13. Similarly the outstanding priority-sector advances of private-sector banks showed
a growth of 14.3 per cent and foreign banks of 5.3 per cent during the same period.
Financial inclusion of the unbanked masses is a critical step that requires political will, bureaucratic
support, and dogged persuasion by RBI. It is expected to unleash the hugely untapped potential of
the bottom of pyramid section of Indian economy. Perhaps, financial inclusion can begin the next
revolution of growth and prosperity. The new government is also committed for financial inclusion.
The newly launched ambitious 'Pradhan Mantri Jan Dhan Yojana' is doing well and has already
[44] Hints: Indian Economy
above halfway mark of its annual target (insurance and pension covers to 7.5 crore households) in
less than 2 months, the Reserve Bank of India has allowed NBFCs to act as business correspondents
and open bank accounts, which is expected to bolster the government's plans to reach remote parts
of the country.
Nachiketa Mor Committee
The Nachiketa Mor Committee on Comprehensive Financial Services for Small Businesses and Low
Income Households, set up by the RBI in September 2013, was mandated with the task of framing
a clear and detailed vision for financial inclusion and financial deepening in India. In its final
report, the Committee has outlined six vision statements for full financial inclusion and financial
deepening in India:
Universal Electronic Bank Account (UEBA): Each Indian resident, above the age of eighteen
years, would have an individual, full-service, safe, and secure electronic bank account.
Ubiquitous Access to Payment Services and Deposit Products at Reasonable Charges: The
Committee envisions that every resident in India would be within a fifteen minute walking

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distance of a payment access point.

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Sufficient Access to Affordable Formal Credit: Each low-income household and small-business
would have access to a formally regulated lender that is capable of assessing and meeting
their credit needs. Such a lender must also be able to offer them a full-range of suitable credit
products at an affordable price.
Universal Access to a Range of Deposit and Investment Products at Reasonable Charges:
Each low-income household and small-business would have access to providers that can
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offer them suitable investment and deposit products. Such services must be available to them
at reasonable charges.
Universal Access to a Range of Insurance and Risk Management Products at Reasonable
Charges: Each low-income household and small business would have access to providers
that have the ability to offer them suitable insurance and risk management products. These
products must at minimum allow them to manage risks related to: (a) commodity price
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movements; (b) longevity, disability, and death of human beings; (c) death of livestock; (d)
rainfall; and (e) damage to property.
Right to Suitability: Each low-income household and small-business would have a legally
protected right to be offered only suitable financial services. She will have the right to seek
legal redress if she feels that due process to establish Suitability was not followed or that
there was gross negligence.
The Committee lays down a set of four design principles, namely Stability, Transparency, Neutrality,
and Responsibility, that will guide the development of institutional frameworks and regulation
for achieving the visions outlined. Any well-functioning financial system must also mandate
participants to build completely transparent balance sheets that are made visible in a high-
frequency manner, accurately reflecting both the current status and the impact of stress situations
on this status. In addition, the treatment of each participant in the financial system must be
strictly neutral and entirely determined by the role it is expected to perform in the system and
not its specific institutional character. Finally, the financial system must maintain the principle
that the provider is responsible for sale of suitable financial services to customers, and ensure that
providers are incentivized to make every effort to offer customers only welfare-enhancing products
and not offer those that are not.
Hints: Indian Economy [45]
At its core the Committee's recommendations argue that in order to achieve the vision of full financial
inclusion and financial deepening in a manner that enhances systemic stability, there is a need to
move away from a limited focus on any one model to an approach where multiple models and
partnerships are allowed to emerge, particularly between national full-service banks, regional banks
of various types, non-bank finance companies, and financial markets. Thus, the recommendations
of the Committee seek to encourage partnerships between specialists, instead of focusing only on
the large generalist institutions.
8. What are the objectives of buffer stock policy? Has the policy been effective in inflation
control and uninterrupted supply of food grains to the people of the country?
Hints:
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; transportation and storage; and
distribution of food grains to consumers at affordable prices, and stability of food grains' prices. The

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price instruments used are MSP (Minimum Support Price) and CIP (central issue price).
Buffer stock policy in India is meant for intervening in food market on the part of government for
OR
price stability. It aims to ensure a remunerative price to the producers of food grains on the one
hand and make food grains available at affordable price to consumers on the other. The policy has
two activities as components. The first part is procurement of food grains from the market for
maintaining buffer stock. Every year, the periodic purchase targets are set. Secondly, buffer stock is
increased or decreased by more purchase or more sales depending upon whether prices are falling
or rising in the food market.
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Over a longer period, there is no doubt, buffer stock policy of India has succeeded in both of its
aims, i.e. providing remunerative prices to producers and providing uninterrupted food supply to
consumers on affordable price. India was able to bear droughts of 1987 or even deficient rains in
the current phase of 2011-4 without significant inflation.
But the buffer stock policy has certain constraints. First of all, buffer stock policy has not been
able to supply edible oil and pulses at affordable prices. It is maintained mostly for cereals and
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that too only rice and wheat. It is because 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.
Secondly, India has a limited capacity for maintaining buffer stock due to limited storage capacity.
Recent support policy of the government for warehousing has led to some increase in the storage
capacity. Storage capacity, both covered and cover and plinth (CAP), of state agencies for
storage of central stocks of food grains, increased by roughly 6% in 2012-13. Total storage
capacity of the FCI and state agencies is 74.35 metric-tons (MT), while construction of warehouses
with a total capacity of 20.4 MT was approved in 19 states under the Private Entrepreneurs
Guarantee (PEG) Scheme.
Finally, the buffer stock policy has also failed to counter seasonality in prices of food grains. Seasonal
factors accentuated food inflation which rose to double digits in early 2013-14, before moderating
to an average of 6.22 per cent (WPI) and 9.22 per cent (CPI-NS) in the last quarter, because of high
growth in the agricultural sector and a normal and well-distributed monsoon. WPI food inflation
has remained persistently high during 2013-14, reaching a peak of 11.95 per cent in Q3. This was
led by high inflation in cereals, vegetables, and eggs, fish, and meat (EFM). Spike in prices of fruits
and vegetables were mainly owing to seasonal factors.
[46] Hints: Indian Economy
9. Explain and elaborate the backward and forward linkages of food processing industry in
promoting rural development.
Hints:
The food processing industry is one of the most important sunrise (emerging) sectors in India
considering its linkage to agriculture and food consumption. It employs 13 million people directly
and about 35 million people indirectly. The worth of the Indian processed foods sector stood at
US$ 157 billion in 2012 and is expected to touch USD 255 billion by FY2016 with 13% CAGR.
Given the high growth and value addition in the sector, it can contribute hugely to agriculture
by providing a fairly high prices for agricultural products and also reliving the pressure on
central government to purchase the products on MSP. It will provide a mechanism to bring
farmers, processors and retailers together and link agricultural production to the market so as to
ensure maximization of value addition, minimize wastages and improve farmers' income.
A direct farmer-industry linkage can also lead to emergence of contract farming, which will lead
to development of futures market, acting as a safety net for farmers, given it is well regulated

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and prevented from speculators. Similarly it would also minimize the Gap between Farm-Gate
Price and Final Price as it would lead to reduction of intermediaries'' interference. Another
development in terms of forward linkage would be development of marketing network and

income in a sustainable manner. OR


capabilities and warehousing capacities. All these changes are likely to bring farmers more

However, currently the sector is developing to its potential due to lack of direct backward and
forward linkages. For instance, the prevailing (Agricultural Produce Market Committee) APMC
act requires companies to obtain specific permission to source directly from farmers, which hinders
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the development of backward linkages and increases the power of middlemen, while unnecessarily
adding to the overall industry costs and reducing the farmer's share from the crop's final price.
10. What are the main components of land reforms? Enumerate the major difficulties in land
reforms in India and suggest measures to remove these.
Hints:
Land reforms include equitable distribution of land on the one hand and land development on the
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other hand. In the first phase of land reforms there was thrust on egalitarian distribution of land
such as abolition of intermediaries, giving land to the tiller, fixing rational rents, fixing a land ceiling
for ownership of land and distributing the surplus land to the landless and marginal farmers. Land
consolidation was also one of the components which aimed at consolidating land of the farmers,
which were scattered over distant areas. Some of the states such as Kerala and West Bengal succeeded
in achieving the first phase of land reforms targets tremendously. The small level to minimum level
of success was achieved in Punjab, Himachal Pradesh and Gangetic Plains. The south India states
such as Andhra Pradesh, Tamil Nadu and Karnataka got limited success and so was the situation
of Orissa, Bihar, Madhya Pradesh, and Maharashtra.
In the post green revolution period, the second phase of land reforms were pursued for land
development. It was observed that various measures for land development, particularly irrigation
and drainage facilities, water harvesting, barbing, and agro forestry etc. were adopted in the green
revolution areas. Some efforts were also made to analyze land fertility and provide required nutrients.
Whereas green revolution areas succeeded in the second phase of land reforms, the other areas
remained laggards. The new agricultural policy, 2001, aimed at giving industrial status to agriculture
and allows contract farming by creating a joint interest between the farmer and corporate sector. In
the third phase of land reforms, if we prefer to call it so, there has been indiscriminate transfer of
land for SEZs and residential and commercial use, which has distorted land use pattern and given
a scare of scarcity of land for farming.
Hints: Indian Economy [47]
The problems facing land reforms are many faceted. First of all, there are no proper land records
with the exception of some of the states such as Gujarat, Karnataka, and, Andhra Pradesh,
which have achieved computerization of land records. Secondly, there has been widespread non-
compliance and violation of provisions of land reforms due to lack of political will to implement
them and skewed power matrix of the Panchayati Raj system, which is still dominated by
Zamindars and the money lenders. Recently, it has been observed that land use in India is more
driven by market forces to other uses than agriculture. In some of the cases the farmers were
given insufficient compensations. We need a land use policy which is not only pro farmer and
pro-agriculture, but which also allows infrastructure and industries to get the land required for
their purpose. This requires a model national land use policy followed by state land use policies.
It may also be highlighted that apart from egalitarian land reforms, proper attention must also
be paid to land development and productivity enhancement. This aspect of land reforms in India
has been largely ignored.

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[48] Hints: Indian Economy


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SCIENCE
Practice Questions

Q1. Supercomputing can help India not only in proving its technological capacities but also
in planning for growth. Explain uses of supercomputing in context of above statement.
What are the recent initiatives of Government of India in the field of supercomputing?

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Q2. The world has a greater need to gather and access personal information to provide
Public Services and Security. Do you agree that digital encryption and mass surveillance
can go hand in hand with right to privacy in India? Analyze.

OR
Q3. Realizing the worth of science and technology in economic growth, modern India has
had a strong focus on development of science and technology. Critically analyze the
development of science and technology in India pre and post independence.

Q4. What is understood by crypto-currency? How it can find a transforming role in developing
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economies like India? What is e-wallet, elaborate what benefits it provides over the
traditional money and plastic money?

Q5. India has achieved self sufficiency in food production, but not able to trickle it down
to the grassroot level due to the leakages. How the IT applications can be used to
control pilferages in PDS system? Discuss with examples.
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Q6. What is Internet of Things? Why this technology, is being considered as the foundation
of smart cities? Also enumerate the challenges involved in Internet of Things.

Q7. What is Big data? Name any Government program that is using it extensively? What
potential does it entails for Indias health-care sector?

Q8. Nano-Technology is an "enabling technology" which influences a wide range of products


and processes with far-reaching implications for development. Discuss the applications
of nano-technology in water purification and food processing sector and how can it
contribute for societal development?

Q9. Radio frequency spectrum is a limited natural resource, it should be used judiciously
and for common good rather than for private gains. Discuss the above statement with
respect to the issue of Net Neutrality.

Q10. With the increment in the space initiatives in India formulation of National Space Act
for regulating space activities in India is must. Illustrate the contemporary issues for
handling of which Space Act is needed.

Q11. What is Digital Locker? Highlights the major benefits of Digital Locker system. How
does Digital Locker differ from other such systems?

Science [49]
Q12. An innovation ecosystem is a combination of two distinct economies, knowledge economy
and the commercial economy. In this context illustrate the major challenges faced by
India's innovation ecosystem and entrepreneurship.

Q13. "Space research in India is moving towards the goal of reducing digital divide". Elaborate
the steps taken recently and its implication?
Q14. Explain the significance of forensic audit?

Q15. Discuss contributions of any two of the following scientists:


(a) Dr M. S. Swaminatham
(b) Hargobind Khurana
(c) J. C. Bose
(d) S S Bhatnagar
(e) Birbal Shahani

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OR
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[50] Science
GS Mains Paper-3 Workbook

SCIENCE
Answer

1. Supercomputing can help India not only in proving its technological capacities but
also in planning for growth. Explain uses of supercomputing in context of above
statement. What are the recent initiatives of Government of India in the field of
supercomputing?

E
Hints:
A supercomputer is a computer with a high-level computational capacity compared to a

general-purpose computer.
OR
In a world, where the might of a nation is more a function of its hold on technology, India
has continuously endeavoredto work on cutting edge supercomputing
Agricultural planning
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A paradigm shift is occurring within the agricultural sciences, owing to the genomics-based
data explosion and concurrent computational advances.
In New Delhi, ASHOKA short for Advanced Super-computing Hub for OMICS Knowledge
in Agriculture was established at the Centre for Agricultural Bioinformatics (CABin) as the
first supercomputing hub for Indian agriculture
Apart from this supercomputing can be used in precision farming, complex weather
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forecasting and crop management, drought prediction, documenting and protecting plant
genomics
Environment and Biodiversity planning
Emission reduction:
GE used a supercomputer to reveal a new aspect of turbine behaviour that is already
providing GE with a competitive advantage in fuel efficiency. Every 1% reduction in fuel
consumption saves users of these products $2 billion/year.
Automotive and engine manufacturers are using high performance computing to develop
next- generation engines that use less fuel. These fuel savings are estimated at more than $1
billion per year.
Disaster management
Forecasting disasters: Seismic simulations are used to generate advanced hazard maps and
developed software that significantly advances this map-making ability. The potential saving
is in billions of dollars in preventing property loss/damage, along with protecting lives
Supercomputing can significantly improve tropical cyclone intensity prediction
Hints: Science [51]
Economic planning
Decision support systemto aid in the management of the national economy by analyzing
trends and statistics. e. g Chilean project cybersyn
By calculating shortest path method, transportation cost and delivery time can be drastically
reduced (enhancing competitiveness)
Monetary and fiscal policy formulation: The high computing and analytic power of Super
computers can be used in evidence based policy formulation. e. g to keep check inflation in
economy, super computers can be fed with factors and indices to generate appropriatepolicy
rates.
The information would also be input into economic simulation software that the government
could use to forecast the possible outcome of economic decisions.
Sophisticated operations room would provide a space where managers could see relevant
economic data, formulate responses to emergencies, and transmit advice and directives to
enterprises and factories in alarm situations by using the telex network.

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Researchers are using simulations to decrease the materials scrapped during the continuous
casting process. Decreasing the material scrapped due to defects such as cracks, even by a
OR
small percentage, results in a large net savings to steel manufacturers and customers
Security planning
Energy security: The low-cost, post-processing system powered by supercomputing, reduces the
need for observation wells and has demonstrated commercial success in oil and gas recovery, carbon
capture and sequestration and geothermal energy
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Government initiative
The government in March 2015 approved launch of National Supercomputing Mission to
connect national academic and R&D institutions with a grid of over 70 high-performance
computing facilities at an estimated cost of Rs 4, 500 crore.
The NKN is another program of the government which connects academic institutions and
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R&D labs over a high speed network and develop by using these facilities applications of
national relevance.
The Mission also includes development of highly professional High Performance Computing
(HPC) aware human resource for meeting challenges of development of these applications.
Given the complexity, volume and dimensions ofdevelopmental planning, India needs to harness
the power of supercomputers to enhance quality, improve speed of its planning process. Along
with the above mentioned steps, Government along with private sector should invest more in R&D
infrastructure to give our young aspiring scientists to developmore powerful
indigenousSupercomputers. At the same time more application workshops are conducted, involving
different stake holders, so that the huge potential of Supercomputers can be fully realized.
2. The world has a greater need to gather and access personal information to provide Public
Services and Security. Do you agree that digital encryption and mass surveillance can go
hand in hand with right to privacy in India? Analyze
Hints:
Article 21 of the Constitution guards the right to privacy as a Fundamental Right. We do not
have an explicit Act in this regard, but Section 43A of the IT Act, 2000, along with the IT
Rules, 2011, protects data privacy in India.
[52] Hints: Science
Data and access ofPersonal information isvery much important to provide social sector
schemes and also protects it from the non-state actors for personal and major national
security threats, particularly from international terrorism, the proliferation of weapons of
mass destruction, cyber warfare and espionage. Debates around government surveillance
and access to encrypted communications and mass surveillance are growing louder in the
shadow of terror attacks in Paris and USs PRISM project.

Mass surveillance in India includes Surveillance, Telephone tapping, Open-source intelligence,


Lawful interception, surveillance under Indian Telegraph Act, 1885, etc. India has been
using many mass surveillance projects for many years. These include the following: Central
Monitoring System Project, DRDO Netra andLawful Intercept and Monitoring Project.

The proposed National Cyber Coordination Centre (NCCC) is a proposed cyber security
and e-surveillance project of India. It aims at screening communication metadata and co-
ordinate the intelligence gathering activities of other agencies. In the absence of any legal
framework and parliamentary oversight, the NCCC could encroach upon Indian citizens

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privacy and civil-liberties.

The current program creates potential risks to public trust, personal privacy and civil liberty.

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In some cases, the government will have a national security justification for access to such
metadata, which should be held; instead either by private providers or by a private third
party, and which should be available only after an appropriate order by a court.

Public officials should not have access to otherwise private information (such as bank records,
credit card records, phone records and Internet data) from third parties (such as banks,
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credit card companies, telephone companies and Internet providers) without a court order.
This will protect the mass surveillance with proper encryption of data.

Many Internet-freedom activists and security engineers have told the public to trust math
encryptionnot politics or law to protect their privacy. We need more transparency in the
system. Indians should be assured that their government will respect their privacy. If the
government incidentally captures communications of Indians when they are communicating
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with non-Indians, it should not be permitted to use those communications in any proceeding
against the Indian citizen.

The government should affirm that such surveillance must never be directed at illegitimate
ends, such as the theft of trade secrets or obtaining commercial gain for domestic industries.

Substantial steps must be taken to safeguard Internet freedom. India should support
international norms or agreements to increase confidence in the security of online
communications.

We should make it clear that the India will not in any way subvert, undermine, weaken or
make vulnerable generally available commercial encryption. To this end, India should support
efforts to encourage the greater use of encryption technology for data in transit, at rest, in
the cloud and in storage for mass surveillance subject to privacy of Indian citizens.

Encryption is a category of mathematical operations in which one string, a key, is used to


transform another, the plain text, in an encoded version according to a specific algorithm.
Once the text is transformed, reversing the transformation without a key takes tens or
hundreds of orders of magnitude longer than the encryption did. This will protect the data
from ill uses.
Hints: Science [53]
3. Realizing the worth of science and technology in economic growth, modern India has
had a strong focus on development of science and technology. Critically analyze the
development of science and technology in India pre and post independence.
Hints:
Science and technology provides the base for the transformation of economy through improving
productivity, providing ground for innovations and developing scientific temper. The base for S&T
is provided by education system and investments.
Development in the field before independence:
Before independence there was not much focus on S&T field. These areas were nearly neglected.
But the link with the west, English as medium of language provided Indians opportunity to
know what is happening and get involved in the scientific endeavours of west.
Reformers and educationist like Raja Ram Mohan Roy realized the importance of sciene and
education. Later three institutions Indian Association for the Cultivation of Science, IISc, and

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Indian Science Congress were established.
Most of the efforts in the field were philanthropic in nature supported by big industrial

houses. OR
Individuals like CV Raman, JC Bose, Meghnad Saha flourished in these institutions.
But foreign language as medium of education, lack of investment, lack of commitment from
governments were some of the reasons for poor base in S&T at the time of independence.
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Development in the field after independence:


a) The initiatives were government led and planned through Planning Commission. The process
was of gradual incrementalism. Science policy was formalized in 1958 outlining the growth
in the sector. But India suffered from absence of strong base.
b) It started with focus on agriculture and industries, establishing institutes of higher education.
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c) New institutions of higher learning like IIT were established. Several institutions focusing
different areas like CSIR for industrial sector, ICAR in the field of agriculture were established.
d) Later on defence, space were focused on in late 1950s and 60s. Nuclear energy, biotechnology
and IT were the new focus areas in coming decades.
In spite of these initiatives the investments needed in the sector were never made. In India less than
1% of the GDP is invested in R&D.
India has only 140 researchers per 1, 000, 000 population, compared to 4, 651 in the United
States.
None of Indian institutions are among the top in the world.
In many areas we are still dependent
Conclusion:
Growth of science and technology is closely related with education, economy and private
investment. India needs to give a great push to tertiary education where enrollment levels are
around 20% only. Public investment should be complimented with private investment, a
networking of industry and educational institutions must be done. All these steps will help in
establishing S&T tradition in India.
[54] Hints: Science
4. What is understood by crypto-currency? How it can find a transforming role in
developing economies like India? What is e-wallet, elaborate what benefits it provides
over the traditional money and plastic money?
Hints:
A crypto-currency(or crypto currency) is a medium of exchange using cryptography to secure
the transactions and to control the creation of new units. Crypto-currencies are a subset
of alternative currencies, or specifically of digital currencies.
Though it is a medium of exchange like normal currencies such as USD, but is designed for
the purpose of exchanging digital information through a process made possible by certain
principles of cryptography.
It can be used to carry out normal transactions using these currencies. Though there have
been debates going on about the regulatory framework over them, but they can play a
transforming role in developing and emerging economies like India. Some of the point can
be discussed as:

E
This technology certainly makes it easier for people to do real time transactions without
involving any third party, such as the bank or credit card providers, in the process and

OR
reduces the cost of transaction.
They have given rise to hot concepts like empowering the unbanked and building
decentralized organizations. They can be one option to provide banking services at the
doorstep of the people who could not access banks.
They can be earned through faucets on the Internet, has zero maintaining balance, does
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not require a credit check, is corruption-resistant (politically and financially speaking),
and can potentially grow in value over time.
They also have enormous potential in cross border money transfers. Sending money
internationally, right now, is expensive and slow. Introducing them is likely to make the
transfers fast and cheap which will play a transforming role in economies where people
transfer money in large amounts.
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It would help in lowering the cost of remittances to countries in the developing world
which could a win-win situation for the sender and the receiver.
It is an alternative store of value as well as widening access to investment opportunities.
e-Wallet:
e-Wallet is an online prepaid account where one can stock money, to be used when required. As it
is a pre-loaded facility, consumers can buy a range of products without swiping a debit or credit
card. The money is stored in a wallet from where the transactions can be carried out when needed.
There is no need of carrying a debit or credit card.
e- Wallet offer a number of benefits over the traditional form of money or plastic money which
needs to carried along with. Some of them are:
Ease of use without having to enter the debit/credit card details for every online transaction.
For some sites there is no minimum amount and you can deposit an amount as low as Rs
10.
The benefits of the wallet can be passed on to friends and family as well.
There is no chance of a decline of payment since e-wallet is a prepaid account.
Hints: Science [55]
They allow people not to carry physical currency/cards andstill make payments.
The payments made through these wallets are easier and quicker. They remember ones card
and bank details. Making payments is like a single-button-click effort.
Supplementary Notes
Evolution of Plastic Money in India
Traditionally, banks were only concerned with acceptance of deposits from customers and
lending surplus money to the suitable customer who want to borrow at some rate of interest.
The most common products being offered by banks were savings account, current account,
term deposit account and lending products being cash credit and term loans. Bankers main
purpose was to manage the savings of people through the mobilisation of funds.
In the seventies, Banks in India started moving towards the social orientation due to which
nationalization took place in July 1969. The Indian Government nationalized the 14 largest
commercial banks and afterwards nationalisation of 6 more commercial banks were followed

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in 1980. The main reason for the nationalisation was to give the government more control
of credit delivery in order to discharge social obligations.

OR
Due to this effect of nationalization, Banks tried to uplift the neglected areas like agriculture,
small scale industries, tertiary sector, remote areas and weaker section of the society by
providing them with funds at reasonable rates of interest. Thus, till nineties, the government
was having direct control on the 90% of the banking business in India.
While fulfilling the social objective, the cost of banking operations increased and thus
profitability of banks declined drastically. To overcome these problems, it became necessary
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for the banks to introduce new products and services which are commercially viable and
helped them to improve their profitability and productivity.
Hence, modern era has brought progressive change in banking industry as a whole which
is resulted from disintermediation process and information technology. New entrants (private
and foreign banks) in the banking industry generally known as New Generation tech-savvy
banks tend to introduce various innovative services while incurring minimum cost but also
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suit the customer preferences. This is the period when automation of banking operations has
gained much importance.
Hence, over last one and a half decades the banking environment has changed progressively.
After financial sector reforms during nineties, the banking industry in India has witnessed
remarkable changes due to information technology and computer applications. The
information technology has replaced the brick or traditional banking with the wide range
of e-banking products and services like ATM (Automated Teller Machine), Internet Banking,
Credit Cards, PC banking, EFTs, Debit Cards, Smart Cards etc.
Indian banks have shifted their emphasis from traditional banking to banking for customers
as customer is always regarded as the key driver for the success of any new product and
services launched in the market and the customer should be satisfied with the offerings of
industry. Therefore, to be successful in the long run, banking industry must adapt to the
changing needs of customers, their preferences and wants. However, Electronic banking also
makes it easier for customers to compare banks services and products with that of others
competitors in the industry and allows banks to penetrate new markets and thus expand
their geographical reach. With the effect of this changing environment, Indian banking has
witnessed remarkable growth since 2006 as banking sector is growing by 18% and it is 6
times more than the last decade growth.
[56] Hints: Science
The plastic money in the form of cards has been actively introduced by banks in India in
1990s. But it was not very popular among Indian consumer at the time of its introduction.
The change in demographic features of consumers in terms of their income, marital status,
education level etc. and upgradation of technology and its awareness has brought the
relevant changes in consumers preferences.
These changing preferences have also modified their outlook and decision regarding the
acceptance and non- acceptance of particular product and services in the market. Thus, the
plastic cards are gaining popularity among bankers as well as customers and getting accepted
in the market place. It can be well imagined from the discussion that no doubt, the plastic
cards market is growing at a large pace in India yet it has long way to go as it lacks behind
if compared to the usage trends of other countries. Hence, it has become important that the
payment system in India has to be modernized enough to be at par with the systems
prevalent in other countries, since our domestic financial markets are increasingly getting
integrated with markets abroad.
RBI is also taking important steps in order to enhance its usage and popularity through
initiatives like regulating card market to maintain the security levels and to build up confidence

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of bankers and customers. Despite the strong advances in e-payments, an estimated 90
percent of personal consumption expenditure in India is still made with cash, which indicates

OR
the tremendous growth potential of this business.
So this can be considered as mere beginning which indicates
plastic card market in India. In nutshell, we can say that
accepting the challenge of information technology as all the
the bright future prospects of
the Indian banking sector is
groups of bankers have now
recognized it as essential requirement for their survival and growth in future.
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5. India has achieved self sufficiency in food production, but not able to trickle it down to the
grassroot level due to the leakages. How the IT applications can be used to control pilferages
in PDS system? Discuss with examples.
Hints:
Ensuring food security ought to be an issue of great importance for a country like India
where more than one-third of the population is estimated to be absolutely poor and one-half
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of all children malnourished in one way or another.


There is a need to shift from the existing expensive, inefficient and corruption ridden
institutional arrangements to those that will ensure cheap delivery of requisite quality grains
in a transparent manner and are self-targeting. For this, IT applications can be used which
are discussed as follows:
a) Integrated Weight Management System (IWMS) - Vehicles carrying food grains are weighed
and the weights are automatically transmitted to and stored on remote servers, without any
manual intervention. If there is a difference in the weight of food grains on arrival vis--vis
that of food grains dispatched, an SMS alert is sent to the concerned officials and a theft
report is generated.
b) Management Information System (MIS) - MIS has been introduced to computerize record
keeping under the PDS. It contains data on godowns, transporters and trucks, movement
of grains, stocks, sale outlets, etc. It provide reports relating to daily activity pertaining to
the PDS such as orders, sales, financial transactions, etc.
c) GPS-based fleet tracking - Trucks transporting grains are fitting with GPS. If a truck
transporting grains from the Food Corporation of India (FCI) to the State Food Corporation
godowns diverts from the pre-planned route, SMS alerts are automatically sent to concerned
officials. This has been done in Munger district in Bihar.
Hints: Science [57]
d) Sale to beneficiary - Sales to beneficiaries at outlets are recorded using Point-of-Sale (PoS)
terminals. Coupons brought by the beneficiaries are scanned using a barcode scanner, and
the information is directly uploaded to the main MIS server where sales reports can be
generated.
e) Citizen interface - Beneficiaries can register on the PDS portal for various SMS alerts. The
system automatically generates an SMS to all members of the ward or panchayat level
vigilance committee informing them about grain off-take by dealers within the ward.
f) Use of UID: Integration of PDS with the UID program lead to better identification of
individuals and families leading to better targeting and increased transparency and therefore
better functioning of the system and increased public approval.
Example:
Government of Chhattisgarh that has used ICT based module to reform, to improve its Public
Distribution System (PDS) that also ensures a transparent and accountable delivery mechanism.
To address the leakages in PDS, the State of Chhattisgarh implemented an end-to-end information

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technology solution in 2007. Operations at every level of the scheme - from procurement of produce,
to storage and transportation to state warehouses and Fair Priced Shops- have been computerized.
OR
There is continuous monitoring of operations at all levels via reports uploaded onto the web in real
time. Web management has led to enhanced accountability of operations. The online platform
provides an account of commodity stocks which helps decision makers in utilizing the inventory of
commodities with greater efficiency.
A unique feature of PDS in Chhattisgarh is the innovative citizen interface portal through which
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citizens can track the movement of PDS commodities and also register their grievances.
The ICT solution being used in Chhattisgarh has shown very encouraging results.
Supplementary Notes
Role of Aadhaar in PDS
Aadhaar is a unique 12 digit identification number that is being issued to all residents of India.
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Aadhaar can be leveraged by PDS in a number of ways:


Ration Card registration
The Ration Card registration can be made easy and convenient for customers:
1. The resident who wants to apply for a Ration Card can go to any place, such as the
Panchayat office, CSC, Post Office, or any approved location equipped with an Aadhaar
enabled assisted service terminal.
2. The resident can also apply by self-service from his own mobile phone and authenticate
himself/herself remotely.
3. The CSMS-PDS will maintain a database of all applicants and publish it on the Internet,
with details such as how many days elapsed, what number are pending, etc. Real-time
analytics can be provided. Contact centre and self-service update status can be given.
4. The back-end software can allocate the request for Ration Card to a particular office based
on well defined rules so there can be clear accountability.
5. Printing of Ration Card can be done centrally and delivered via Post or at Government
offices locally.
[58] Hints: Science
6. In such a targeted system, there could be a self-assessment form where the resident declares
his/her eligibility and the Ration Card is automatically given to him/her, with a penalty for
misstatement. A random sampling and audit would help in streamlining this, and catching
offenders.
Addressing diversion and pilferage
Aadhaar cannot address all diversion and pilferage that happens within the PDS. One common
method for pilferage includes the creation of fake Ration Cards (which may be in the name of
fictitious families, or ineligible families), and creating records that show consumption of food and
kerosene by these fake families.
Once Aadhaar is used for Ration Card registration, it can help weed out such fake identities, and
reduce the opportunities for fraud. Pilferage may still occur through coercion and denial of service,
but these problems will be addressed by providing the resident choice for receiving their food and
kerosene from multiple outlets.
Authentication services

E
Aadhaar will provide biometric and non-biometric authentication services. In cases such as kerosene
subsidy, where electronic authentication of the beneficiary is necessary, Aadhaar based

OR
authentication solutions may be deployed.
The State Government will have a choice of doing one time verification of the identity, followed by
its own authentication, or simply using Aadhaars online services. The details will depend upon the
solution requirements and availability of infrastructure.
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Aadhaar-linked payments
The State Government can channel subsidies to Aadhaar enabled bank accounts , and beneficiaries
can access these accounts through Aadhaar authentication (or other banking channels made available
by the bank). This will enable State Governments to directly transfer subsidy to the intended
beneficiary using the Aadhaar Payments Bridge and the Aadhaar Enabled Payments System.
6. What is Internet of Things? Why this technology, is being considered as the foundation of
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smart cities? Also enumerate the challenges involved in Internet of Things.


Hints:
The Internet of Things (IoT) is a computing concept that describes a future where everyday
physical objects will be connected to the Internet and be able to identify themselves to other
devices. The term is closely identified with RFID as the method of communication, although
it also may include other sensor technologies, wireless technologies or QR codes.
The IoT is significant because an object that can represent itself digitally becomes something
greater than the object by itself. No longer does the object relates just to humans, but is now
connected to surrounding objects and database data. When many objects act in unison, they
are known as having ambient intelligence".
Smart city planners need to approach their developments holistically to ensure inter-operability.
Machines can make cities smarter. Machine-to-machine (M2M) also known as the internet
of things technology, designed to communicate autonomously, is underpinning developments
that will improve everyday life in evolving urban environments.
Here are five ways in which sensors and data communications are changing the way that
we live.
Hints: Science [59]
1. Smart driving and connected cars: Transportation is perhaps one of the biggest challenges
faced by a modern city. Using M2M technology to sense real-time traffic information and
feed back to a central point can help city planners adapt to changing traffic flows, both in
real time and strategically for the long term.
2. Smart parking: Parking is another everyday transportation activity that can be made smarter
with M2M technology. Using sensors to detect free spaces and relay the information to
drivers, cities can decrease congestion and increase parking revenues.
3. Smart water: Water wastage is a huge problem for modern urban environments. Only 11
of the 28 European capital cities have wastewater collection systems. Water metering is vital
to conserve this precious resource, and M2M technology can help in it.
4. Smart environment: According to the World Health Organisation, exposure to particulate
matter reduces every residents life by an average of one year. Monitoring air quality is a big
challenge for the smart city.
5. Smart trash: The back-end software uses historical data to predict when the containers will

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be fill up, and schedules pickups dynamically based on the information.
The work flows in analyzed enterprise environment, home, office and other smart spaces in
OR
the future will be characterized by cross organization interaction, requiring the operation of
highly dynamic and ad-hoc relationships. At present, only a very limited ICT support is
available, and the following key challenges exist.
1. Network FoundationLimitations of the current Internet architecture in terms of mobility,
availability, manageability and scalability are some of the major barriers to IoT.
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2. Security, Privacy and TrustIn the domain of security the challenges are: (a) securing the
architecture of IoT security to be ensured at design time and execution time, (b) proactive
identification and protection of IoT from arbitrary attacks (e.g., DoS and DDoS attacks) and
abuse, and (c) proactive identification and protection of IoT from malicious software.
3. Managing heterogeneitymanaging heterogeneous applications, environments and devices
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constitute a major challenges.


Supplementary Reading
In the domain of user privacy, the specific challenges are: (a) control over personal information
(data privacy) and control over individuals physical location and movement (location privacy),
(b) need for privacy enhancement technologies and relevant protection laws, and (c) standards,
methodologies and tools for identity management of users and objects.
In the domain of trust, some of the specific challenges are: (a) Need for easy and natural
exchange of critical, protected and sensitive datae.g., smart objects will communicate on
behalf of users/organizations with services they can trust, and (b) trust has to be a part of
the design of IoT and must be built in.
In addition to the above major challenges, some of the other challenges are: (a)managing large
amount of information and mining large volume of data to provide useful services, (b) designing an
efficient architecture for sensor networking and storage, (c) designing mechanisms for sensor data
discovery, (d) designing sensor data communication protocols sensor data query, publish/subscribe
mechanisms, (e) developing sensor data stream processing mechanisms, and (f) sensor data mining
correlation, aggregation filtering techniques design. Finally, standardizing heterogeneous
technologies, devices, application interfaces, etc. will also be a major challenge.
[60] Hints: Science
7. What is Big data? Name any Government program that is using it extensively? What
potential does it entails for Indias health-care sector?
Hints:
Big data is a buzzword, or catch-phrase, used to describe a massive volume of both structured
and unstructured data that is so large that its difficult to process using traditional database
and software techniques.
In most enterprise scenarios the data is too big or it moves too fast or it exceeds current
processing capacity. Big data has the potential to help organizations improve operations and
make faster, more intelligent decisions. Specifically, Big Data relates to data creation, storage,
retrieval and analysis that is remarkable in terms of volume, velocity, and variety.
Indias Unique Identity (UID) project is already the worlds largest biometrics identity program,
and it is still growing. More than 600 million people have been registered in the project
database, which collects all ten fingerprints, iris scans of eyes, a photograph, and demographic
information for each registrant. It is consider as an example of big data collection and use.

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Use of big data:
a) Technology also is opening new opportunities to contain rising health-care costs and improve

b)
access.
OR
A mobile-notification system alerts clinics to dispatch nursemidwife teams; can be used to
infant mortality in the country.
c) A publicprivate partnership can be created, as has been developed in China for the
development of for example cardiovascular-monitoring system that allows patients to self-
SC
administer electrocardiograms and transmit data to specialists who can suggest treatments
by phone.
d) A smart tag can be used to track the flow of hundreds of patients, treatments, and medical
assets in real time which helps the hospital to potentially treat more patients each year as
a result and generate million in savings and revenues over several years.
e) Insurance industry is facing a challenge, wherein, finding genuine claims and compensating
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providers for high-cost treatments is becoming increasingly challenging. It can help in reducing
the fraud cases of health insurance.
Supplementary Reading
In the healthcare sector, the convergence is likely to be more in the areas of cloud, mobility, social
media and big data as there is a clear upcoming trend of Tele-health and Web-health. Embedded
systems can have a myriad of applications in healthcare as digitization picks up steam; embedded
systems may find convergence with technologies such as cloud, mobility and big data to give access
to auto-generated patient information. Augmented reality would also have applications, however,
lesser in comparison to other disruptive technologies. AR applications would be more focused in
medical education rather than actual patient treatment and care.
Many governments are already using the Web to improve services and reduce waste. India has
enrolled 380 million citizens in the worlds largest biometric-identity program, Aadhaar, and plans
to use the system to make over $50 billion in cash transfers to poor citizens, saving $6 billion in
fraudulent payments. In 2011, the US government introduced a Cloud First policy, which laid out
a vision to shift a quarter of the $80 billion in annual federal spending to the cloud from in-house
data centers, thus saving 20 to 30 percent on the cost of the shifted work. Governments can also use
IT to better engage citizens, as South Korea has done with its e-People site, which helps citizens
send online civil petitions for policy changes or reports of corruption.
Hints: Science [61]
8. Nano-Technology is an "enabling technology" which influences a wide range of products
and processes with far-reaching implications for development. Discuss the applications of
nano-technology in water purification and food processing sector and how can it contribute
for societal development?
Hints:
Nanotechnology is the study of matter at a miniature level called the nano scale. Nano-
materials have unique size-dependent properties related to their high specific surface area
(fast dissolution, high reactivity, strong sorption) and discontinuous properties.
These specific nano-based characteristics allow the development of novel high-tech materials
for more efficient water and wastewater treatment processes, namely membranes, adsorption
materials, nano-catalysts, functionalized surfaces, coatings, and reagents. Both Carbon nano-
tubes CNTs and nano-metals are highly effective nano-adsorbents for the removal of heavy
metals such as arsenic.
With respect to food processing, Nanomaterials allow better encapsulation and release

E
efficiency of the active food ingredients compared to traditional encapsulating agents.
Silicate nano-particles are used to provide a barrier to gasses (for example oxygen), or

spoiling or drying out. OR


moisture in a plastic film used for packaging. This could reduce the possibility of food

Zinc oxide nano-particles can be incorporated into plastic packaging to block UV rays and
provide anti bacterial protection, while improving the strength and stability of the plastic film.
Nanosensors are being developed that can detect bacteria and other contaminates, such as
SC

salmonella, at a packaging plant. This will allow for frequent testing at a much lower cost
than sending samples to a lab for analysis.
Nanotechnology may allow us to build a sustainable, society-focused technology through
upfront design rather than retroactive problem solving, use of molecular medicine and
personalized health treatment, increased productivity, and early and continuing emphasis
on multidisciplinary education.
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9. Radio frequency spectrum is a limited natural resource, it should be used judiciously and
for common good rather than for private gains. Discuss the above statement with respect
to the issue of Net Neutrality.
Hints:
Spectrum has been internationally accepted as a scarce, finite and renewable natural resource
which is susceptible to degradation in case of inefficient utilisation. It has a high economic
value in the light of the demand for it on account of the tremendous growth in the telecom
sector.
As natural resources are public goods, the doctrine of equality, which emerges from the
concepts of justice and fairness, must guide the State in determining the actual mechanism
for distribution of natural resources.
In this regard, the doctrine of equality has two aspects: first, it regulates the rights and
obligations of the State vis--vis its people and demands that the people be granted equitable
access to natural resources and/or its products and that they are adequately compensated
for the transfer of the resource to the private domain; and second, it regulates the rights and
obligations of the State vis--vis private parties seeking to acquire/use the resource and
demands that the procedure adopted for distribution is just, non-arbitrary and transparent
and that it does not discriminate between similarly placed private parties.
[62] Hints: Science
The Internet offers a lot of potential and opportunities for sustainable development.
Research shows that access to Internet provides individuals and firms a vital resource that
facilitates innovation, learning and efficiency, all of which lead to greater productivity and
thus, greater economic growth. The positive impacts associated with the Internet are possible
because of the neutral nature of the Internet.
If Net Neutrality was done away with, TSPs would begin to charge users different prices for
access to different content, such as music, videos, e-mail, chat etc., each of which requires
a different amount of bandwidth.
Lower-income internet users, SMEs and start ups would be excluded from parts of the
Internet, while higher income users and large companies would have continued access to all
internet content.
The economic benefits would be concentrated in the hands of rich individuals and established
firms who can afford more expensive content. Start ups and SMEs who will no longer be
able to leverage the full benefits of the internet would find it even more difficult to compete

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with established firms.
10. With the increment in the space initiatives in India formulation of National Space Act for

OR
regulating space activities in India is must. Illustrate the contemporary issues for handling
of which Space Act is needed.
Hints:
ISRO's legacy of the last 52 years can be attributed to its visionary leadership, non-interference
of politics, checks and balances at every stage, flexibility in an otherwise inelastic bureaucracy,
SC
innovation and the spirit of bouncing back from failures, and the attitude of taking criticism
constructively.
Indian Space Research Organisation (ISRO) has initiated a process of formulating a National
Space Act for India for regulating space activities in India, to facilitate enhanced levels of
private sector participation and to offer more commercial opportunities.
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With growing activity in the space sector and the resulting increase in funding, a law will
be required for ethics to keep pace. The second reason for a national space law is for the
protection of space assets. The third and the biggest reason is to genuinely fulfil international
obligations and to have a long-term vision. The fourth reason is to encourage private
participation, given the need for the nation to technologically empower itself as a whole
against the rising global competition.
Compensation and liability aspects are only a part of it. There are also some of the
contemporary issues which have to be given special importance like space debris issue, space
insurance matters and intellectual property in space.
Space debris is nothing but collection of objects around the earth that were created by
human but they no longer serve any useful purpose. It can be anything from useless rocket
to non-operational satellites to paint flakes. These space debris possess a huge danger: if they
collide with any spacecraft, damage is unavoidable.
Space insurance matters are still dealt with domestic insurance regulations which have been
proved to be inadequate till now. Intellectual property in space is also a vital issue as which
needs to be looked in to separately for the Indian space programme has been encouraging
transfer of technologies to Indian industry to support various space projects.
Hints: Science [63]
A number of space technologies have been transferred to the Indian industries in the areas
of electronics, communication, optical and remote sensing data utilisation. In this regard the
protection of intellectual property is an important safeguard.
Our space legislation should incorporate (i) the legal issues connected to launching services
(space transportation systems); (ii) the legal issues connected to satellite telecommunications,
including satellite broadcasting; (iii) issues associated to earth observation services as well as
data processing and distribution; (iv) satellite navigational systems and (v) the intellectual
property rights (IPR) regime and transfer of technology.
To conclude, after the International Space Station retires, China may be the only country
having an operational space station and the rest of the countries will be fighting to have one
of their own. However, the space industry alone can achieve nothing without support in
capacity building and, to an extent, some handholding from the government. This evolving
market scenario, rising global competition, and the need for private players and the government
to work together all explain why a space law is needed.

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11. What is Digital Locker? Highlights the major benefits of Digital Locker system. How does
Digital Locker differ from other such systems?
Hints:

OR
The Digital Locker is an online storage facility provided by the Government of India to store
important documents. Under this a person can upload documents like Voter Id card, PAN
card, BPL card, Driving license, education certificates, etc. These documents will be linked
to the persons Aadhar number and can be treated as authorized documents. So, a person
need not to carry physical documents while applying for jobs or government certificates or
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educational institutions etc.


The Digital Locker system has the following advantages:
a) Print anytime from anywhere All electronic documents will be in a printable format
enabling users to print anytime from anywhere. This will help users to access the
documents in case of any disaster or loss of documents.
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b) Convenience No more long queues or procedures to get the documents.


c) Free of cost Digital Locker facility is provided to Indian Citizen free of cost which will
enable its usage even by the lower strata of society.
d) Shareable Residents can easily share the documents with other agencies/departments
without having to share photocopies, scan copies, document uploads etc. Sharing can
easily be done even on phones via SMS and text based systems.
e) Verifiable Documents and certificates issued by Government can be verified online
which will stop the usage of fake documents/certificates.
f) Secure - Only the owner has the right to see and share the documents as per his/her
requirement and convenience.
Digital Locker differ from other such websites in following ways-
a) Digital Locker offers much more than a place to store the documents.
b) A person can upload scanned copies of documents, like in other websites. But these
scanned documents which, if required, can be digitally signed thus making the e-
document at par with the original one.
[64] Hints: Science
c) Going forward the locker will be repository or store house of all your government issued
e-documents. These electronic e-documents will be uploaded by issuers, government
departments or agencies such as CBSE, registrar office, income tax department.
d) The documents can be shared via email, the e-documents from governments agencies
viewed by an authorised list of requestors such as a bank, university, the passport office
or the transport department.
However, with other websites, cyber law and jurisdiction is a concern. When people upload
their personal information into these websites they have NO idea where the data is stored
(somewhere in cloud), who else has access to the information. Or what polices these companies
have in regards to what employees have access to customer data. Or what policies they have
in regard to things like legal subpoenas and requests from law enforcement agencies and
governments.
If a person stores anything in Drop Box or Google drives, it is governed under US regulations
and there is no direct protection under the Information Technology (IT) Act.

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Though Online free storage services are equally secure, however, the governments locker is
more secure primarily because the data gets stored within India and are legally protected
under the Information Technology Act, 2000.

OR
12. An innovation ecosystem is a combination of two distinct economies, knowledge economy
and the commercial economy. In this context illustrate the major challenges faced by
India's innovation ecosystem and entrepreneurship.
Hints:
SC
An innovation ecosystem is a combination of two distinct but largely separated economies:
i) the knowledge economy (comprised of knowledge producers), which is driven by
fundamental research, and ii) the commercial economy (comprised of knowledge users),
which is driven by the marketplace.
In India, the innovation ecosystem includes the entire national innovation system described
in the previous section, plus individual innovators and entrepreneurs; mentors; government
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policies; angel, venture capital, institutional, and industrial funding mechanisms, intellectual
property rights mechanisms; technology transfer mechanisms; market inputs; and incentives,
awards, and other innovation-recognition mechanisms, among others.
Ideally, these various structures and mechanisms facilitate the smooth translation of
innovations through the various segments of a complex innovation chain that takes ideas
from mind to market. Thus, the functional goal of the innovation ecosystem is to enable
technology development and innovation.
Key challenges faced by Indias innovation ecosystem and entrepreneurship in general are
listed and described below-
a) Fragmented policy and policy implementation: There has been no comprehensive policy
focusing on innovation and entrepreneurship so far. Also, the mechanisms to operate
existing, fragmented policies were not uniform, which resulted in gaps in understanding
and failure to achieve the desired effects of such policies.
b) Inadequate funding of R&D: Little national funding is available for R&D: from 2011 to
2012 it was only 0.88% of gross domestic product.
c) Difficult and lengthy funding procedures: Although funding is available from banks
and public sources, the procedures for accessing such funding are often complex,
Hints: Science [65]
cumbersome, lengthy, and bureaucratic; in other words, not conducive to innovation
and entrepreneurship. Moreover, despite these difficult and lengthy procedures, the
system seeks immediate returns. However, the returns from innovation are often
uncertain, late, or not quantifiable immediately.
d) Angel, venture capital, and seed funding: Despite 100 angel networks operating in India
(e.g.,Indian Angel Network; Mumbai Angels), only tens of deals are made each year.
For such a populous country, this magnitude of deals is very low compared to the
numbers from abroad and fall short of Indias requirements.
e) Weak linkages between stakeholders: The linkages between industry, especially medium
and small-scale enterprises and R&D or academic institutions are weak.
f) Non-conducive education system: The general education system is still too focused on
grades and careers and is not oriented toward innovation and entrepreneurship. This
situation is further worsened by the inherent problems of lack of infrastructure and
good facilities in the educational institutions; delays in the funding system; and delays
in the funds or other support reaching innovation projects.

E
g) Poor infrastructure facilities in villages: Basic infrastructure facilities such as electricity,
Internet, roads and rail, and even the availability of a skilled workforce, are not evenly
OR
distributed in India and often weak in smaller cities or towns and rural parts of the
country.
h) Risk aversion among entrepreneurs: Indian entrepreneurs often seek established technology
as a basis for starting their business; they are hesitant to take on innovative ideas
because of the risks involved, including the low availability and high cost of funds that
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often arrive too late.


i) Inadequate protection of intellectual property rights: In India, the intellectual property
regime is weak. Innovators do not generally seek protection for their intellectual property
unless forced to.
The government of India has taken many initiatives towards strengthening the innovation
ecosystem, the most important of which are: i) the establishment of the National Innovation
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Council, whose mandate is to coordinate various innovation-related activities, and ii) the
new Science, Technology and Innovation Policy 2013, which is intended to promote
entrepreneurship and science-led solutions for sustainable and inclusive growth.
13. "Space research in India is moving towards the goal of reducing digital divide". Elaborate
the steps taken recently and its implication?
Hints:
The basic requirement for reducing the digital divide for any nation is to give priority to the
development of its telecommunication and IT infrastructure in order to provide universal and
affordable access to information for people in all geographical areas of the country.
ISRO has embarked upon Village Resource Centre (VRC) programme to disseminate the portfolio
of services emanating from the space systems as well as other Information Technology (IT) tools,
directly down-the-line to the rural communities. VRCs essentially have: digital connectivity (for
videoconferencing and information transfer) with knowledge centers and specialty healthcare
providers enabled via INSAT; spatial information on natural resources generated using IRS data; a
host of information pertaining to management of natural resources and socio-economic relevance;
and facilities for primary healthcare services and distance education.

[66] Hints: Science


The tele-education programme launched by ISRO, serviced by the exclusive satellite 'EDUSAT', is
primarily intended for school, college and higher levels of education to support both curricula
based as well as vocational education. With 5 Ku-band transponders providing spot beams, and
one Ku-band transponder providing national beam, and 6 extended C-band transponders with
national coverage beams, EDUSAT is specifically configured for audio-visual medium, employing
digital interactive classroom and multimedia multi-centric system. Many important institutions
such as the IGNOU, UGC, IITs, and many State Education Departments and Universities are making
use of the EDUSAT network. Presently, more than 34,500 classrooms are in the EDUSAT network
out of which 3,400 are interactive terminals.

14. Explain the significance of forensic audit?

Hints:

Forensic auditing is a blend of traditional accounting, auditing, and financial detective work.
Technology has an increasingly important role to play, with complex data analysis techniques

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employed to help flag areas that warrant further investigation.

Forensic auditing offers a toolset that company managers can use to help detect and investigate

OR
various forms of white-collar financial impropriety and inappropriate or inefficient use of resources.
As company structures and controls become ever more complex, so too does the scope for employees
with specialized knowledge of the way control systems work to bypass them. In the past, various
forms of auditing have been employed after a major control breach has come to light, but executives
are now increasingly looking at forensic auditing to help identify vulnerabilities in financial control.
SC
Significance

Forensic auditing strengthens control mechanisms, with the objective of protecting the business
against financial crimes, be they potentially catastrophic one-off events that could threaten
the viability of the business, or smaller-scale but repetitive misappropriations of company
assets over a number of years.

Forensic auditing can play an important role for companies under review by regulatory
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authorities and can also be invaluable to ensure regulatory compliance. For example, forensic
auditing can be useful in helping companies to ensure that their anti-money laundering
procedures are both effective and robust.

Forensic auditing can help protect organizations from the long-term damage to reputation
caused by the publicity associated with insider crimes. A forensic audit also provides a
sound base of factual information that can be used to help resolve disputes, and can be used
in court should the victim seek legal redress.

Forensic auditing can improve efficiency by identifying areas of waste.

Forensic auditing can help with the detection and recording of potential conflicts of interest
for executives by improving transparency and probity in the way resources are used, in both
private and public entities.

15. Discuss contributions of any two of the following scientists:


(a) Dr M. S. Swaminatham
(b) Hargobind Khurana
(c) J. C. Bose
Hints: Science [67]
(d) S S Bhatnagar
(e) Birbal Shahani
Hints:
Dr M. S. Swaminatham
Dr Swaminathan is known as 'Father of Green Revolution' in India, for his leadership and success
in introducing and further developing high-yielding varieties of wheat in India. He is an advocate
of a further shift in focus towards sustainable development, especially using environmentally
sustainable agriculture, sustainable food security, and the preservation of biodiversity, which he
calls an 'evergreen revolution. Mahatma Gandhi's concepts of sarvodaya and antyodaya remain
central to his scientific work.
Har Gobind Khurana
He was an Indian-American biochemist who shared the 1968 Nobel Prize for Physiology or Medicine
with Marshall W. Nirenberg and Robert W. Holley for research that helped to show how the order
of nucleotides in nucleic acids, which carry the genetic code of the cell, control the cell's synthesis of
proteins.

E
Khurana's work, which is an most important scientific landmark of the twentieth century, has
brought closer the day when synthetic DNA may be introduced into the defective human tissues to
OR
bring about their repair or treat mentally retarded people and change them into more intelligent
and healthy human beings. His synthesis of RNA, capable of replication in laboratory, is a step
towards the creation of life artificially. In fact, the research has opened up a new branch called
Genetic Engineering in Science.
J. C. Bose
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Jagadish Chandra Bose was a famous polymath who left his mark on number of fields as, biologist,
botanist, physicist and archaeologist and was also an early writer of science fictions. He discovered
that plants, respond to various stimuli. His contribution to the field of radio-length microwaves
earned him reputation as one of the `Fathers of Radio Science` along with the likes of Maxwell and
Hertz, among others. His major achievement was to demonstrate the similarity of responses to
stimulation between the living and the non-living as well as the fundamental similarity of responses
in plant and animal tissues. He also made significant contributions to microwave and radio optics.
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S S Bhatnagar
He was the first director-general of the Council of Scientific and Industrial Research (CSIR), and he
is revered as the 'father of research laboratories'. He was also the first Chairman of the University
Grants Commission (UGC).
Bhatnagar did considerable work in applied and industrial chemistry. The first industrial problem
undertaken by Bhatnagar was the development of a process to convert bagasse (peelings of sugarcane)
into food cake for cattle. One of the important achievements of Bhatnagar in applied and industrial
chemistry was the work he did for Attock Oil Company at Rawalpindi (representative of Messers
Steel Brothers & Co London), where the solved the issue of generation of solidified mud in drilling
operations.
Birbal Shahani
Birbal Sahni was an Indian paleo-botanist who studied the fossils of the Indian subcontinent. He
worked as a geologist as well, who had an interest in archaeology. He founded the Birbal Sahni
Institute of Palaeobotany in Lucknow, India. His greatest contributions lie in the study of botany of
the plants of India as well as paleobotany. Apart from writing numerous influential papers on
these topics he also served as the President of the National Academy of Sciences, India and as an
Honorary President of the International Botanical Congress, Stockholm.
[68] Hints: Science
GS Mains Paper-3 Workbook

ENVIRONMENT
Practice Questions

Q1. Sustainable use of the major and minor natural resources can provide fundamental life
support, in the form of both consumptive and public, good services. What are the policy
initiatives that are undertaken to tackle illegal and inappropriate mining in India?
Explain how the Amendment to the Environment Impact Assessment can be helpful in

E
preventing indiscriminate exploitation of natural resources?

Q2. Countries like India which depend majorly on coal for their electricity production face

OR
a surmounting international pressure and an environmental concern. Discuss how the
coal fed power plants can be uplifted using newer technologies? Examine how the
revised standards for coal-based thermal power plants will help in minimising pollution?

Q3. Municipal Solid waste management is one of the major problems faced today in India.
SC
Elaborate upon the reasons that have created such mounting challenges in India. Explain
how the conceptualization of waste to energy can bring a ground-breaking change in the
scenario? Analyze how traditional practices of rural India can be a way out to the
problems?

Q4. What do you understand by National Air Quality Index? How it can be helpful in
checking the levels of harmful urban and industrial air pollutants? What are major
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impediments in early roll out of BS-IV and BS-VI standards in India?

Q5. Gender-sensitivity is a key priority for low carbon climate resilient planning at local,
national and international levels. In this context, examine the impact of climate change
on the women in developing countries like India.

Q6. Incineration has been used in India for solid waste disposal, but the process has many
drawbacks. Elaborate it with examples.

Q7. Marine and coastal biodiversity is an important component of maintaining ocean and
coastal ecosystem function. In this context discuss the importance of marine and coastal
biodiversity and suggests some measures to control the loss of marine and coastal
biodiversity.

Q8. Discuss the role played by the Supreme Court of India in conserving the natural resources.
Illustrate with suitable examples.

Q9. To approve developmental projects in protected areas, monitoring and evaluation,


strengthening of infrastructure, addressing man-animal conflict and raising awareness
is required. None of these are possible only through meetings in Delhi, but require
local action on the ground. Critically analyse with respect to the functioning of National
Board for Wildlife.

Environment [69]
Q10. What do you understand by Environmental Justice? Discuss the role played by National
Green Tribunal in achieving the Environmental Justice in India. Also elaborate the
major hurdles faced by NGT.

Q11. India has recently committed to expand the share of non-fossil fuel energy to 40% by
2030. Discuss the implications of it for the economic and sustainable growth of India.

Q12. Define the "Polluters Pay Principle". Discuss the major difficulties in implementing
Polluter Pays Principle in developing countries like India.

Q13. E-waste export to the developing countries is governed by brute global economics in
which market forces, if left unregulated, dictates that the toxic waste will always run
"downhill" on an economic path of least resistance. Elaborate.
Q14. What do you mean by bio-remediation? Discuss the importance of bio-remediation in
India's effort towards sustainable development.

Q15. Discuss the challenges faced by institutional bodies in nation states during the
implementation of International laws related to environmental protection.

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OR
SC
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[70] Environment
GS Mains Paper-3 Workbook

ENVIRONMENT
Answer

1. Sustainable use of the major and minor natural resources can provide fundamental life
support, in the form of both consumptive and public, good services. What are the policy
initiatives that are undertaken to tackle illegal and inappropriate mining in India?
Explain how the Amendment to the Environment Impact Assessment can be helpful in

E
preventing indiscriminate exploitation of natural resources?
Hints:

OR
Preservation of the natural environment and its major and minor natural resources is essential for
maintaining community sustainability. Resources like building stones, gravel, sand, limestone, Iron,
Mg, Al, Cu,among othershave been used for both consumption for survival and public good services,
often bypassing and subverting the laws and environment balance. So, there is need to protect and
maintain sustainable use of these for present and future generation.
SC
Entry 54 of union list I & Entry 23 of state list II of seventh schedule of the constitution of India
empowers the Union & State Governments respectively for management of minerals. Anybody
found extracting or removing any mineral without obtaining permission from any lawful authority
amounts to illegal mining and is liable to be punished under the provisions of the rules. For this
Government have undertaken following initiative to tackle illegal and inappropriate mining in
India.
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1) Issue of Transit pass: Every leaseholder or permit holder has to use transit pass. Such
transit passes issued by authority shows the details of the lease holder / permit holder, date,
vehicle number transporting the material, quantity, time etc.
2) First National Mineral Policy (NMP)- Government in 1993 for liberalization of the mining
sector. This aimed at encouraging the flow of private investment and introduction of state-
of-the-art technology in exploration and mining. This was aims to minimise inappropriate
mining, bring transparency and efficiency.
3) Hoda Committee and Sustainable Development Framework (SDF): - In line with the
Hoda Committee recommendations, the Ministry of Mines commissioned which prepared a
Sustainable Development Framework Report in November 2011, for which the new MMDR
Bill 2011 will provide statutory backing against illegal mining. The Ministry also set up a
Steering Committee against illegal mining.
4) The Mines and Minerals (Development and Regulation) (MMDR) Act, 1957 was amended
through the MMDR Amendment Act, 2015. The Amendment Act has, inter alia, stringent
punitive provisions for combating illegal mining. Illegal mining has been made punishable
with imprisonment for a term which may extend to five years and with fine which may
extend to five lakh rupees per hectare of the area.

Hints: Environment [71]


5) Special Courts: - Provisions have been made for setting up of Special Courts for the purpose
of providing speedy trial of offences relating to illegal mining under(MMDR) Act, 1957.
Further Amendment in Environment Impact Assessment (EIA) can be helpful in preventing
indiscriminate exploitation of natural resources by following ways.
1) Bring small-scale mining under its ambit of EIA: -Ministry of Environment, Forest and
Climate Change (MoEF&CC) has finally amended the Environment Impact Assessment
(EIA) Notification, 2006, to bring small-scale mining projects under its ambit. The amendment
will make environmental clearance (EC) compulsory for mining of minor minerals in areas
less than or equal to five hectares to prevent indiscriminate exploitation of natural resources.
Both the Supreme Court and the National Green Tribunal issued orders and directives
making ECs compulsory for projects less than five ha.
2) Establishment of authorities at the district level to clear projects: -The latest notification
provides for the establishment of the District Environment Impact Assessment Authority
(DEIAA) and District Expert Appraisal Committee (DEAC) to evaluate EC proposals for

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small-scale leases for minor minerals.
3) District Survey Report (DSR): -The DSR shall be prepared for each minor mineral in the

OR
district separately. As clarified, the main objective of the preparation of DSR is the identification
of areas where mining can be allowed and also where mining must be prohibited due to
geological and physical limits The report will also help in calculation of annual rate of
replenishment and allowing time for replenishment after mining in that area.
4) Use of a unique barcode for transportation permits: -To curb illegal mining or transportation
of sand, it suggests measures such as the use of a unique barcode for transportation permits,
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details on how the permit should be printed, use of smart phones and CCTV cameras at the
mine site, sophisticated weighing equipment to monitor the movement of sand from the
mines and tracking vehicles with radio-frequency identification (RFID) tags and GPS.
Supplementary Notes
The Hoda Committee report (2006) was published in July 2006 with wide-ranging recommendations
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like institutionalizing a Sustainable Development Framework (SDF) to address social, economic


and environmental issues arising out of mining.
A high-level committee was, therefore, constituted in September 2005 under Anwarul Hoda,
member, Planning Commission. The committees terms of reference were:
To review the NMP and the Mines and Minerals (Development and Regulation) Act, 1957
and suggest the changes needed for encouraging investment
To review existing procedures for granting Reconnaissance Permits (RPs), Prospecting Licenses
(PLs), and Mining Leases (MLs) and suggest ways for their streamlining and simplification
To review the procedures for according clearance to mineral exploration and mining projects
under the Forest (Conservation) Act, 1980 and Environment (Protection) Act, 1986, and
suggest ways for speeding them up
To prioritize critical infrastructure needs of the Indian mining sector and make
recommendations on ways to facilitate investment to meet these needs
To examine the implications of the policy of mineral-rich states to make value addition
within the state a condition for grant of mineral concession and make appropriate
recommendations in this regard
[72] Hints: Environment
To examine ways of augmenting state revenues from the mineral sector, and

To examine any other issue relevant for stimulating investment flows and inducting state of-
the-art technology into the sector. The committee submitted its report in June 2006.

2. Countries like India which depend majorly on coal for their electricity production face
a surmounting international pressure and an environmental concern. Discuss how the
coal fed power plants can be uplifted using newer technologies? Examine how the
revised standards for coal-based thermal power plants will help in minimising pollution?
Hints:
India derives nearly 60% of its energy from coal. These thermal power plants emit CO2, NO2, SO2
which cause serious environment and health damage in the form of acid rain, global warming and
respiratory disease. Therefore if the environmental impact of these can be reduced it will help in
great way to achieve Indian obligation for sustainable development.

E
Clean coal technologies can be used to achieve this which are:
a) Chemically washing minerals and impurities from coal to reduce SOX
b)
c)
d)
Coal gasification
OR
Carbon capture and sequestration to remove CO2 from the flu gas
Improved technology to remove flu gas (the gas emitted after the burning of coal through
chimney)
SC
e) Dewatering of lower rank coal (brown coal) to improve its efficiency.
Min of Environment has finalized, in consultation with CPCB new emission norms for coal power
plants.
a) The new standards are aimed at reducing emission of PM10, sulphur dioxide and Oxide of
nitrogen, which will in turn help in bringing about an improvement in the Ambient Air
Quality (AAQ) in and around thermal power plants.
GS

b) The technology employed for the control of the proposed limit of Sulfur Dioxide - SO2 &
Nitrogen Oxide - NOx will also help in control of mercury emission (at about 70-90%) as a
co-benefit.
c) Limiting the use of water in thermal power plant will lead to water conservation as thermal
power plant is a water-intensive industry. This will also lead to a reduction in energy
requirement for drawl of water.
Indian government has been making continuous efforts to improve the quality of environment in
India. Imposition of coal cess, air quality index to give air quality data and categorization of industries
based on their environment impact into four categories are some other steps taken in this direction.
Supplementary Notes
Coal gasification:
Coal gasification is the process of producing syngasa mixture consisting primarily of methane
(CH4), carbon monoxide (CO), hydrogen (H2), carbon dioxide (CO2) and water vapor (H 2O)
from coal and water, air and/or oxygen. This can be used for converting municipal waste into
energy.

Hints: Environment [73]


Several different technological methods are available for the purpose of carbon capture as demanded
by the clean coal concept:
Pre-combustion capture - This involves gasification of a feedstock (such as coal) to
form synthesis gas, which may be shifted to produce a H2 and CO2-rich gas mixture, from
which the CO2 can be efficiently captured and separated, transported, and ultimately
sequestered, This technology is usually associated with Integrated Gasification Combined
Cycle process configurations.
Post-combustion capture - This refers to capture of CO2 from exhaust gases of combustion
processes, typically using sorbents, solvents, or membrane separations to remove CO2 from
the bulk gases.
Oxy-fuel combustion - Fossil fuels such as coal are burned in a mixture of recirculated flue
gas and oxygen, rather than in air, which largely eliminates nitrogen from the flue gas
enabling efficient, low-cost CO2 capture.

3. Municipal Solid waste management is one of the major problems faced today in India.

E
Elaborate upon the reasons that have created such mounting challenges in India. Explain
how the conceptualization of waste to energy can bring a ground-breaking change in
OR
the scenario? Analyze how traditional practices of rural India can be a way out to the
problems?

Hints:
Solid waste is garbage consisting of daily use items like waste like biodegradable waste (food, paper)
SC

recyclable waste like (plastic, glass, bottles,etc) and other types of waste. India generates about 60
million tonnes of trash every year. Ten million tonnes of garbage is generated in just the metropolitan
cities: Delhi, Mumbai, Chennai, Hyderabad, Bangalore and Kolkata. Solid waste management is
one of the most pertinent issues being faced by Indian cities.

Reasons:
GS

a) Absence of proper infrastructure of collection and disposal like dustbins, collection bins.

b) The garbage is generally thrown in empty spaces and this can't be cleaned after efforts by
workers.

c) Absence of appropriate technologies.

d) No segregation and recycling of the waste because of lack of knowledge.

e) the landfills of most of these cities are already overflowing.

f) Absence of culture of cleanliness which results into garbage not being carried to designated
points.

g) Waste collection is done in the morning only whereas generation is done during the whole
day.

Waste to energy and how it can solve the problem of Solid Waste Management

Waste to energy is the generation of energy in the form of electricity or heat from non-recyclable
and non-hazardous waste.
[74] Hints: Environment
a) The problem of landfills will be solved.

b) This will lead to monetization of the solid waste so private sector participation can be
elicited.

c) The revenues generated can be used for better payment of staff and they can work for the
whole day.

d) This will solve the problem of waste being strewn on the street as proper chain will be
established.

Traditional practices of rural India for solid waste management were suited to the local conditions
and employed local resources. Like use of waste food for animals, or preparation of agriculture
manure from it, and use of traditional and local material for construction, use the one that generate
least environment footprint, can be emulated.

4. What do you understand by National Air Quality Index? How it can be helpful in

E
checking the levels of harmful urban and industrial air pollutants? What are major
impediments in early roll out of BS-IV and BS-VI standards in India?
Hints:

OR
National Air Quality Index is an index developed by the Central Pollution Control Board in
consultation with IIT-Kanpur and an expert group to monitor the level of air quality.

There are six AQI categories, namely Good, Satisfactory, Moderately polluted, Poor, Very
SC
Poor, and Severe. The proposed AQI will consider eight pollutants (PM10, PM2. 5, NO2, SO2,
CO, O3, NH3, and Pb).

It provides the likely health implications of the six categories which would also be provided
with a colour code. This will help in checking the level of pollution and potential health
hazards.
GS

The AQI will prove to be a major initiative for monitoring and improving air quality in
urban areas as it would enhance public awareness and involvement.

It would create a competitive environment among cities to take steps for air pollution-
mitigation.

Checking the quality of air will help to meet clean- air standards and reduce the public
health risk.

The Bharat Stage norms were adopted by the government in 2000, based on the European
emission norms. Each stage specifies a certain limit on the pollutants released, which is
controlled by the type of fuel made by the oil companies and the up-gradations and
modifications made by the auto firms to their vehicles to control the pollutants released from
the vehicle

India had enforced Bharat stage III norms across the country since October 2010. In 13
major cities, Bharat stage IV emission norms were put in place since April 2010. Currently,
BS-IV petrol and diesel are being supplied in whole of Northern India covering Jammu and
Kashmir, Punjab, Haryana, Himachal Pradesh, Uttarakhand, Delhi and parts of Rajasthan
and western UP. The rest of the country has BS-III grade fuel.
Hints: Environment [75]
From 1 April, 2016, all of Goa, Kerala, Karnataka, Telangana, Odisha, Union Territories of
Daman and Diu, Dadra-Nagar-Haveli and Andaman & Nicobar will get BS-IV fuel. The rest
of the country is scheduled to get supplies of BS-IV from 1 April, 2017.

Recently the government proposed to introduce Bharat VI norms directly by 2020. In the
light of this decision, the major impediments in the implementation can be discussed as:

There are two major industries which would face challenges: first is the oil refineries that
will need a substantial investment to upgrade. These upgrades will allow the refineries to
supply fuel types that can match the BS-VI standards. The shift of technology from BS-IV
to BS-VI is likely to cost anything between Rs 50, 000 crore to Rs 80, 000 crore to petroleum
companies. This would hit the margins of oil companies.

Second, the automobile manufacturers would require a significant technological jump


especially in diesel filter technology & in optimization of selective catalytic reduction
technology.

E
Such a move could lead to safety and quality problems. it would take as much as four-and-
a-half years of lead time for design, application and validation of new engine technologies

OR
to move from BS-IV to BS-V, and a similar time to graduate to BS-VI.
The decision will make cars, sports utility vehicles (SUVs), trucks, buses and auto parts more
expensive
Though, there are several challenges related to technology upgradation, availability of fund,
rising cost of vehicles, availability of BS VI Fuel in shorter time frame yet this cost would be
SC

compensated by the reduction in diseases due to air pollution which has become a severe
health hazard for the Indian cities.

5. Gender-sensitivity is a key priority for low carbon climate resilient planning at local,
national and international levels. In this context, examine the impact of climate change on
the women in developing countries like India.
GS

Hints:

Detrimental effects of climate change can be felt in the short-term through natural hazards,
and in the long-term, through more gradual degradation of the environment. The adverse
effects of these events are already felt in many areas, including in relation to, inter alia,
agriculture and food security; biodiversity and ecosystems; water resources; human health;
human settlements and migration patterns; and energy, transport and industry.

Thus Planning for low carbon resilient development has become an increasingly important
policy priority for least developed country governments. But women are more vulnerable to
the effects of climate change than menprimarily as they constitute the majority of the
worlds poor and are more dependent for their livelihood on natural resources that are
threatened by climate change. Furthermore, they face social, economic and political barriers
that limit their coping capacity.

Women in rural areas in developing countries are especially vulnerable as they are highly
dependent on local natural resources for their livelihood. Deforestation results in the reduction
in the variety of forest products which is of particular relevance for women. If the supply
shrinks then the women are affected disproportionately by less food, less fuel, harder work.

[76] Hints: Environment


About two-thirds of the female labour force in developing countries, and more than 90 per
cent in many African countries, are engaged in agricultural work. In the context of climate
change, traditional food sources become more unpredictable and scarce. Women face loss of
income as well as harvestsoften their sole sources of food and income. Related increases
in food prices make food more inaccessible to poor people, in particular to women and girls
whose health has been found to decline more than male health in times of food shortages.
Water is the most essential resource for sustenance of life. The time spent by women in
providing their families with water is considerable. As ground water level is lowering and
soil and water is becoming salinized, there is a severe shortage of drinking water. Women
have to walk a long way to get water and it is becoming harder for them to collect water
for daily use. Arsenic pollution in a number of districts has increase burdens.
Destruction of wetlands has a negative impact on poor women and children as capture
fishery is the main source of protein for the rural poor. It also shrinks womens employment
opportunities. Again loss or depletion of animal and plant species limit the productive
opportunities of rural women.

E
Thus, Mitigation and Adaptation efforts should systematically and effectively address gender-
specific impacts of climate change in the areas of, inter alia, food security, agriculture and

6. OR
fisheries; biodiversity; water; health; human rights; and peace and security.
Incineration has been used in India for solid waste disposal, but the process has many
drawbacks. Elaborate it with examples.
Hints:
SC
Incineration technology is the controlled combustion of waste with the recovery of heat to
produce steam that in turn produces power through steam turbines. Municipal solid waste
(MSW) after pretreatment is fed to the boiler of suitable choice wherein high pressure steam
is used to produce power through a steam turbine.
As with landfills, different incinerators are permitted for different kinds of waste. Hazardous
waste must be brought to an incinerator permitted to accept hazardous waste.
GS

Municipal solid waste incinerators are permitted to burn municipal solid waste, with some
units having the ability to recover energy.
Medical waste incinerators are designed to handle pathogenic wastes.
Advantages of Incineration of Waste:
Incineration is a practical method of disposal that saves a lot of money on transport of waste
to landfills and thus also the carbon footprint that such transport leaves behind.
The sheer reduction in the space required to dispose of the 10 per cent of waste that it
produce, relieves pressure on land, which in urban areas can constitute a big saving. Landfills
have never been a pretty site and also give rise to a lot of pests and insects.
Waste to Energy (WTE) incinerating plants have a huge advantage that they can produce
electricity which in the long run can help to reduce costs. A 250 tonne per day incinerator
can produce 6.5 megawatts of electricity per day and this itself can save about $3 million
per year.
It can be operated in any weather.
It produces stable odour-free residue.
Hints: Environment [77]
Disadvantages:
It is expensive to build and operate.
It requires high energy.
Dioxins are produced in the treatment and is a cancer forming chemical. These are produced
in the smoke stack.
It requires skilled personnel and continuous maintenance.
Above drawbacks can be understood with the help of example of Timarpur plant in Delhi. The
incineration technology used in the Timarpur plant lags behind that of state-of-the-art waste-to-
energy incinerators now in operation in Europe. In pollution test of plant, the Delhi Pollution
Control Committee has found that levels of dioxins and furans were more than 30 times above the
legal limit. Neighbors have reported a film of black ash on their terraces since the plant opened.
That, along with concern about pollution reaching nearby hospitals and the Kalindi Bird Sanctuary.
This explains that incineration based waste disposal has serious issues. Indias big cities are poised

E
for a building boom of waste-to-energy plants, but they are using inexpensive Chinese-manufactured
incinerators with less rigorous pollution controls and operating in a new sector nearly devoid of
regulations.
7. OR
Marine and coastal biodiversity is an important component of maintaining ocean and coastal
ecosystem function. In this context discuss the importance of marine and coastal biodiversity
and suggests some measures to control the loss of marine and coastal biodiversity.
Hints:
SC

Coastal and marine ecosystems are amongst the most productive ecosystems in the world
and provide many services to human society; however, many of these ecosystems have
become degraded.
These ecosystem services include:
a) Provisioning services such as food, water, timber, and fibre;
GS

b) Regulating services such as the regulation of climate, floods, disease, wastes, and water
quality;
c) Cultural services such as recreational, aesthetic, and spiritual benefits; and
d) Supporting services such as soil formation, photosynthesis, and nutrient cycling.
Anthropogenic causes are the major drivers of change, degradation, or loss of marine and
coastal ecosystems and services. Terrestrial drivers also impact upon marine and coastal
ecosystems.
The direct drivers of change in marine and coastal ecosystems are:
a) land use change;
b) development of aquaculture;
c) overfishing and destructive fishing methods;
d) invasive species;
e) pollution and nutrient loading (eutrophication); and
f) climate change.
[78] Hints: Environment
The major indirect drivers of change in marine and coastal ecosystems are:

a) shifting food preferences and markets;

b) subsidies;

c) illegal fishing;

d) population growth;

e) technology change; and

f) globalization.

Measures to control the loss of marine and coastal biodiversity are:

a) Implementation of integrated coastal and marine management and sustainable development


plans and programmes at appropriate levels;

E
b) Preparation of coastal profiles, identifying critical areas, including eroded zones, physical
processes, development patterns, user conflicts and specific priorities for management;

c)

d)
OR
Prior environmental impact assessment, systematic observation and follow-up of major projects,
including the systematic incorporation of results in decision-making;

contingency plans for human induced and natural disasters, including likely effects of potential
climate change and sea level rise, as well as contingency plans for degradation and pollution
of anthropogenic origin, including spills of oil and other materials;
SC
e) Improvement of coastal human settlements, especially in housing, drinking water and
treatment and disposal of sewage, solid wastes and industrial effluents;

f) Periodic assessment of the impacts of external factors and phenomena to ensure that the
objectives of integrated management and sustainable development of coastal areas and the
marine environment are met;
GS

g) Conservation and restoration of altered critical habitats;

h) Integration of sectoral programmes on sustainable development for settlements, agriculture,


tourism, fishing, ports and industries affecting the coastal area;

i) Infrastructure adaptation and alternative employment;

j) Human resource development and training;

k) Public education, awareness and information programmes;

l) Promoting environmentally sound technology and sustainable practices;

m) Development and simultaneous implementation of environmental quality criteria.

Supplementary Reading

States, in accordance with the provisions of the United Nations Convention on the Law of the Sea
on protection and preservation of the marine environment, commit themselves, in accordance with
their policies, priorities and resources, to prevent, reduce and control degradation of the marine
environment so as to maintain and improve its life-support and productive capacities. To this end,
it is necessary to:
Hints: Environment [79]
Apply preventive, precautionary and anticipatory approaches so as to avoid degradation of
the marine environment, as well as to reduce the risk of long-term or irreversible adverse
effects upon it;
Ensure prior assessment of activities that may have significant adverse impacts upon the
marine environment;
Integrate protection of the marine environment into relevant general environmental, social
and economic development policies;
Develop economic incentives, where appropriate, to apply clean technologies and other
means consistent with the internalization of environmental costs, such as the polluter pays
principle, so as to avoid degradation of the marine environment;
Improve the living standards of coastal populations, particularly in developing countries, so
as to contribute to reducing the degradation of the coastal and marine environment;
Ensuring capacity-building at the local level;

E
Consulting on coastal and marine issues with local administrations, the business community,
the academic sector, resource user groups and the general public;

OR
Coordinating sectoral programmes while building capacity;
Identifying existing and potential capabilities, facilities and needs for human resources
development and scientific and technological infrastructure;
Developing scientific and technological means and research;
SC

Promoting and facilitating human resource development and education;


Supporting centres of excellence in integrated coastal and marine resource management;
and
Supporting pilot demonstration programmes and projects in integrated coastal and marine
management.
GS

8. Discuss the role played by the Supreme Court of India in conserving the natural resources.
Illustrate with suitable examples.
Hints:
The current process of industrialization, urbanization and globalization are adversely
influencing the natural resources like land, water, forests, etc. There is utmost need to
conserve and utilize these resources in a sustainable manner since they are the very basic
components of human development.
The Government of India as well as our Parliament has been increasingly supportive of
stringent environmental legislations and regulations but there has been lack of enforcement
of laws. This has given rise to judicial activism related to environmental issues.
Through the tool of PIL (Public Interest Litigation) the Supreme Court had dealt with variety
of issues related to conservation of forest, preservation and protection of wildlife, protecting
the rights of tribal people and thus balancing the symbiotic relationship between the forest
dwellers and the goal of forest conservation. The court has also addressed the issues of
balancing the right to freedom of trade and business and the conservation of forest and
wildlife and issues related to biodiversity. With the help of PIL the Supreme Court has
interpreted the provisions of the Forest Conservation Act, 1980.
[80] Hints: Environment
The Supreme Court has pronounced number of judgments and orders and issued various
directions for preservation of environment and enforcement of human rights of citizens
under Right to Life, (Article 21). It includes right of healthy living thus environment
degradation leads to violation of rights under Article 21.
The Supreme Courts orders and directions cover long range of areas such as vehicular
pollution, pollution by industries, depletion of forests, illegal felling of trees, dumping of
hazardous waste, pollution of rivers, illegal mining. The Supreme Court has passed orders
for closure of polluting industries and environmentally harmful aqua-farms, mandated cleaner
fuel for vehicles such as introduction of CNG fuel in Delhi, stopping illegal mining activity,
and protecting forests and architectural treasures like Taj Mahal.
Thus the Judiciary has contributed to the development of environmental laws in India by
widening the scope of locus standi and entertaining Public interest litigation in India. The
judiciary has performed the role of lawmaker and established various committees and
empowered them to enforce the provisions of environmental laws. Supreme Court has
played a fruitful role in conserving environment.

E
9. To approve developmental projects in protected areas, monitoring and evaluation, strengthening
of infrastructure, addressing man-animal conflict and raising awareness is required. None of

OR
these are possible only through meetings in Delhi, but require local action on the ground.
Critically analyse with respect to the functioning of National Board for Wildlife.
Hints:
Due to the rapid decline in wildlife population, in 1972, the Wildlife (Protection) Act was
enacted for providing special legal protection to our wildlife and to the endangered species
SC
of animals in particular. As per the Amendment of the Act in 2002, a provision was
incorporated for the constitution of the National Board for Wildlife, replacing the Indian
Board for Wildlife.
The NBWL is chaired by the Prime Minister. It has 47 members including the Prime Minister.
Among these, 19 members are ex-officio members. Other members include three Members
of Parliament (two from Lok Sabha and one from Rajya Sabha), five NGOs and 10 eminent
GS

ecologists, conservationists and environmentalists.


The National Board for Wildlife (NBWL) is the apex body under the Wildlife Protection Act,
1972, to frame and monitor conservation policies to safeguard Protected Areas. Part of their
job is to review and appraise all projects that require forest lands either inside the national
parks and sanctuaries or within a 10 km radius around them.
However, apart from reviewing projects sitting in Delhi, the Board hasn't been able to do
much for its stated purpose - protection of wildlife. Critics argue that not only has it failed
in effectively protecting our declining wildlife population, but also that its inefficiency has
stalled developmental projects.
The original intent of the NBWL has been defeated, making the board a platform for clearing
projects destroying to wildlife. On NBWL, the views and advice of non-governmental members
are largely overlooked. Activists feel that these members, meant to provide an independent
view to the Government, are nothing more than window dressing.
The full NBWL meets under the chairmanship of the Prime Minister not more than once a
year, and that too only for two hours. Most of the decisions are taken by its 10-member
standing committee which meets every three months for just three hours to decide the fate
of developmental projects in protected areas without analysing the ground situation.
Hints: Environment [81]
10. What do you understand by Environmental Justice? Discuss the role played by National
Green Tribunal in achieving the Environmental Justice in India. Also elaborate the major
hurdles faced by NGT.
Hints:
Environmental justice is based on the principle that all people have a right to be protected
from environmental pollution and to live in and enjoy a clean and healthful environment.
Environmental Justice is the equal protection and meaningful involvement of all people with
respect to the development, implementation and enforcement of environmental laws,
regulations and policies and the equitable distribution of environmental benefits.
National Green Tribunal (NGT) was established under "Article 21" of the Indian Constitution.
This particular article of Indian Constitution assured its citizens for the protection of life and
personal liberty. The newly established "Green Tribunal" is a unique judicial mechanism in
the sense that it is a special "fast-track quasi-judicial" body to ensure speedy justice on the
environment related cases.

E
Since its inception, NGT has given many fast-track judgments in various cases and has
passed several orders to the respective authorities like ban on illegal sand mining, against
OR
noise pollution in Delhi, preservation of biodiversity of Western Ghat Mountains, wildlife
protection in Kaziranga National Park in Assam, suspended many environmental clearance
and so on.
In this way, NGT is working quite well and ensuring its mandate to impart justice in
environment related litigations. In post liberalization Indian economy, NGT within its
SC

jurisdictions is checking the unabated drive towards industrialization.


There is a view that as NGT would take over the powers of the lower courts, people would
not have local access to justice. This would be most disadvantageous to economically weaker
sections of society as they would not be able to use the more than 13,000 district and
subordinate courts to address environmental disputes. In tribal areas of Jharkhand, Orissa,
Chhattisgarh, etc. people do not have much knowledge about NGT. For a tribal activist
GS

based in a remote location, it is extremely difficult to travel to Kolkata and find accommodation
there. There is a problem that how NGT can ensure justice to the needy at their doorsteps.
NGT has been accused of overstepping its jurisdiction and taking actions for which it has
not been empowered under the NGT Act.
In the past, NGT has taken up cases on its own, (suo-motu). The tribunal issued a long order
with many directions. The environment ministry had been constantly reminding NGT that
taking up suo-motu cases is not within its jurisdiction. In India, suo-motu jurisdiction is
limited to superior courts like the Supreme Court and the High Courts.
11. India has recently committed to expand the share of non-fossil fuel energy to 40% by 2030.
Discuss the implications of it for the economic and sustainable growth of India.
Hints:
India has expanded its already aggressive renewable energy and non-fossil energy targets.
At 40% non-fossil electricity capacity, this would mean a four fold increase in absolute
terms over todays installed capacity.
This step will help National Solar Mission (NSM) to aim for a target of 100 GW in installed
solar energy capacity by 2022.
[82] Hints: Environment
Indias wind energy industry will also play a pivotal role in augmenting its renewable energy
capacity. India currently stands as the worlds fifth largest wind energy producer, with an
installed capacity of over 22 GW. Through its proposed National Wind Mission (NWM),
India is hoping to reach a wind energy capacity of 60 GW target by 2022.
India is also taking action to reduce overall emissions intensity and improve energy-efficiency
through its National Mission for Enhanced Energy-Efficiency. By 2017, all buildings will be
required to comply with Indias Energy Building Conservation Code (ECBC), which
incorporates energy saving measures into building construction. And while coal and other
fossil fuels will continue to comprise a substantial share of Indias energy supply, the
Government of India is working to integrate energy-efficient practices throughout the industries
through the Perform, Achieve, and Trade (PAT) scheme.
But this will pose a significant demand in terms of finance. As an emerging economy, India
would depend on international financial flows and more importantly technological
cooperation to meet its targets and ramp up its efforts. What is absolutely needed is technology
co-operation. Because they make the programme affordable with less cost and more energy

E
efficiency, and that is the game changer.
Further the step will help in establishing major industries related with renewable energy like

OR
equipments manufacturing, which will provide employment opportunities and will help in
regional development. These efforts will be critical to build Indias resilience to severe droughts,
deadly heat waves and other climate impacts.
12. Define the "Polluters Pay Principle". Discuss the major difficulties in implementing Polluter
Pays Principle in developing countries like India.
SC
Hints:
The polluters pays principle is the commonly accepted practice that those who produce
pollution should bear the costs of managing it to prevent damage to human health or the
environment. For instance, a factory that produces a potentially poisonous substance as a
byproduct of its activities is usually held responsible for its safe disposal.
This principle underpins most of the regulation of pollution affecting land, water and air.
GS

The polluter pays principle is a way of internalising the externality. It makes the firm /
consumer pay the total social cost, rather than just the private cost. (Social cost = private
cost+ external cost)
Difficulties of Implementing Polluter Pays Principle:
a) Ambiguity exists in determining who is a polluter. In legal terminology, a polluter is
someone who directly or indirectly damages the environment or who creates conditions
relating to such damage. Clearly, this definition is so broad as to be unsupportive in
many situations.
b) Second, a large number of poor households, informal sector firms, and subsistence
farmers cannot bear any additional charges for energy or for waste disposal.
c) Third, small and medium-size firms from the formal sector, which mainly serve the
home market, find it difficult to pass on higher costs to the domestic end-users of their
products.
d) Fourth, exporters in developing countries usually cannot shift the burden of cost
internalisation to foreign customers due to elastic demand.

Hints: Environment [83]


e) It can be difficult to measure how much pollution is produced, e.g. firms may try to hide
the extent of their pollution.
f) It can be difficult to impose regulations or tax on firms from other countries. For example,
when we contribute to global warming, the problem affects everyone around the world,
but it can be difficult to create international agreements to impose penalties on those
who are polluting.
13. E-waste export to the developing countries is governed by brute global economics in which
market forces, if left unregulated, dictates that the toxic waste will always run "downhill"
on an economic path of least resistance. Elaborate.
Hints:
India is one of the largest waste importing countries in the world. All types of wastes are
imported into the country, in the form of cheap raw materials including hazardous and
toxic wastes.

E
Exporting e-waste is more lucrative for the exporter country than recycling or disposing it
within the country. For instance, waste traders in Europe or USA have to pay US $20 to
recycle a computer safely in their countries while they can sell it at half the cost to the

OR
informal traders in developing countries.
The U.S. produced five times more hazardous waste in 2002 (265 million tonnes) than it did
in 1975 (57 million tonnes). The cost of managing such waste within the country would be
enormous depending on the toxicity and reactivity of the substances. Thus, it would be more
economical to ship toxic wastes to the developing countries where the cost is negligible.
SC

Illegal export becomes possible when the environment and occupational regulations are non-
existent, minimal, lax or not well-enforced, as they are in some developing countries. Low
labour costs in these countries also provide the impetus for the export in wastes. For instance,
labour cost in China is $1.50 per day.
A muted aspect of the global trade in waste which has raised some concerns is that developed
countries like Japan are making full use of the Free Trade Agreements (FTAs) or so called
GS

Economic Partnership Agreements (EPAs) to export their waste to the developing world.
The growing pressure on the developing countries to import waste through bilateral or free
trade agreements is a cause of serious concern as it encourages the business of recycling
wastes. It could also override the existing national and international laws against the
hazardous waste import, especially the Basel Convention and its global Ban Amendment
forbidding toxic waste exports to the developing countries.68 For instance, despite the
international ban, the U.K. could export nearly 23,000 MT of electronic waste illegally in
2003 to parts of South- east Asia, India and China.
14. What do you mean by bio-remediation? Discuss the importance of bio-remediation in India's
effort towards sustainable development.
Hints:
Increases in environmental contamination lead to a progressive deterioration of environmental
quality. This condition challenges sustainable development which pressurizes our global society to
find effective measures of remediation to reverse the negative conditions that severely threaten
human and environmental health.
Mining industries release a variety of waste including abandoned mines and drill cuttings and
fluids of fossil fuel exploration. All these constitute as hazardous waste and pose potential public
[84] Hints: Environment
health or environmental risk. Environmental rehabilitation of abandoned mines in India would
involve monitoring effluent treatment systems and would need a legislative framework for
environmental rehabilitation of abandoned mines and maintenance and long-term monitoring.
Bioremediation can play a significant role in sustainable development of environment.
Bioremediation is the use of micro-organisms for the degradation of hazardous chemicals in soil,
sediments, water, or other contaminated materials. It uses naturally occurring bacteria and fungi
or plants to degrade or detoxify substances hazardous to human health and/or the environment.
Microorganisms destroy organic contaminants in the course of using the chemicals for their own
growth and reproduction.
Bioremediation generally utilizes microbes (bacteria, fungi, yeast, and algae), although higher plants
are also used in some applications. New bioremediation approaches are emerging based on advances
in molecular biology and process engineering. Bioremediation continues to be the favored approach
for processing biological wastes and avoiding microbial pathogenesis. Bioremediation may also
play an increasing role in concentrating metals and radioactive materials to avoid toxicity or to
recover metals for reuse. Microbes can biodegrade organic chemicals; purposeful enhancement of

E
this natural process can aid in pollutant degradation and waste-site cleanup operations.
Recently developed rapid-screening assays can identify organisms capable of degrading specific

OR
wastes and new gene-probe methods can ascertain their abundance at specific sites. New tools and
techniques for use of bioremediation in situ, in biofilters, and in bioreactors are contributing to the
rapid growth of this field. Bioremediation has already proven itself to be a cost-effective and beneficial
addition to chemical and physical methods of managing wastes and environmental pollutants.
The scope of environmental bioremediation extends to -
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Inorganics viz., Arsenic, Mercury, Chromium, Fluoride, Cyanide, abandoned mines, fly ash
disposed sites, engineered phytotreatment technologies, biological permeable barriers; and
Organics viz., petroleum hydrocarbons, pesticides and explosives.
Advantages of bioremediation processes:
a) Lower cost than conventional technologies.
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b) Contaminants usually converted to innocuous products.


c) Contaminants are destroyed, not simply transferred to different environmental media.
d) Nonintrusive, potentially allowing for continued site use.
e) Relative ease of implementation.
15. Discuss the challenges faced by institutional bodies in nation states during the
implementation of International laws related to environmental protection.
Hints:
The first generation of environmental law, formulated during 1972 Stockholm conference on the
Human Environment, saw the creation of specialist environmental administrations and the
introduction of a suite of laws for them to administer on environmental impact assessment, pollution
control, wilderness conservation, and threatened species conservation. The second generation of
environmental law saw a shift in focus to sustainable development, reflecting the increased
participation of developing countries in international diplomatic initiatives on the environment. It
signified attention to the eco-system problems, such as climate, biodiversity, and desertification,
and to international trade of harmful substances into developing countries, such as chemicals and
hazardous waste.
Hints: Environment [85]
A State implements an international norm at the domestic level in three phases: first, by adopting
national legal measures; second, by enforcing them; and third, by reporting on the implementation
measures. National-level legal measures might include enacting legislation, formulating policies, or
administering resources. The domestic implementation measures adopted need to be appropriate
for the purpose of meeting obligations under the international treaty, so as to achieve 'compliance'
with treaty obligations. The mere fact that an implementation measure is taken does not mean that
it is adequate to meet a treaty obligation nor that the State is necessarily compliant with its obligation.
Further framework environmental laws in India were enacted to address the cross-sectoral spectrum
of environmental issues. This 'umbrella' approach establishes the basic legal principles without
detailed codification. It entails the declaration of environmental objectives and policies, the
establishment of the necessary and relevant environmental institutions, and the definition of the
common procedural principles for environmental decision-making applicable to all sectors. In this
latter respect, the legislation often covers such cross-sectoral issues as environmental impact
assessment, environmental quality criteria and public participation in decision-making and
implementation. The implementation of its principles inevitably requires further enabling legislation.
The basic framework can remain intact while the implementing legislation is reformulated in response

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to changes in socio-economic and ecological factors.
Environmental treaties often articulate specific obligations that are negotiated without a clear plan
OR
for their national implementation, due to the difficulty of making concrete assessments of the financial,
human, technical and social requirements of implementation. Therefore, the anticipated requirements
for national implementation by a particular country might be only loosely approximated at the time
of negotiation. Some agreements may even seem to be aspirational or educative, lacking in specific
commitments or ways of forming concrete assessments of the requirements for their practical
implementability.
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An additional layer of complexity for implementation results from duplication or overlap in


environmental treaty obligations, requiring coordination between those responsible to promote
efficiency and avoid waste across implementation efforts.
Thus institutional bodies at national level often fail to implement programmes related to
environmental conservation.
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[86] Hints: Environment


GS Mains Paper-3 Workbook

DISASTER MANAGEMENT
Practice Questions

Q1. Discuss the major reasons for the recent forest fires in the hills of Uttarakhand and
Himachal Pradesh. Suggest a strategy to combat the forest fire, with a particular focus
on man-made fire disasters.

E
Q2. The work of NDRF has been praised globally for short-run disaster mitigation; however,
it is criticized, when it comes to long-term disaster prevention strategy. Critically analyse.

OR
Q3. Psychological Rehabilitation is complex in comparison to Physical and Social
Rehabilitation in post disaster recovery. Examine the efforts taken for it in post disaster
period.

Q4. Disaster Mechanism of India includes dedicated forces like National Disaster Relief
Force (NDRF) and institutions like the CRC, NCDM, NIDM for the same but then also
SC
security forces are deployed in the management of disaster and hazards in India. Why
is it so? Discuss the steps needed for strengthening the institutional mechanism for
disaster management.

Q5. Sustainable poverty reduction is proving to be an elusive goal and this is particularly
because disasters are not being properly factored into development. In this context
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discuss the need and aim for adoption of Disaster Risk Reduction (DRR) Strategies in
the Programmes and Schemes aimed at poverty alleviation and development.

Q6. For effective disaster management, the human resource development will have to be
made systematic. Mere training alone is not enough to develop the capacities. In this
context analyse the role of human resources in disaster management and suggest concrete
measures for human resource development.

Q7. Comment on the role of information technology in disaster management and cite some
examples of successful use of IT in disaster management in India.

Q8. Industrial disasters are the worst man-made disasters which could be described as cost
of unplanned development. Comment.

Q9. Disaster prevention and preparedness should be considered as an integral aspect of


development policy and planning at local, state, and national level. Elaborate.

Q10. 'Disaster Management' as a subject is not mentioned in any of the three lists. A subject
not specifically mentioned in any of these lists comes under the Residuary Powers of
the Union under entry 97 of the Union List. This renders effective disaster management
very difficult in the country. Critically analyse the need for the changes in the
constitutional provisions for Disaster Management.

Disaster Management [87]


Q11. Lack of coordination among the various agencies involved in intelligence and enforcement
is described as a major impediment in maintaining internal security. What measures
have been undertaken by the government in recent times to overcome this problem?

Q12. Understanding the gender implications and facets of natural disasters and climate change
is critical to effective disaster risk management practices that enable communities and
countries to be disaster resilient. Elaborate.

Q13. Insurance is a potentially important mitigation measure in disaster-prone areas as it


brings quality in the infrastructure & consciousness and a culture of safety. Critically
analyse the importance of insurance in disaster management in developing countries
like India.
Q14. The role of NGOs in disaster management is usually seen as a remedy provider and
rescuer. Critically analyse the role of NGOs with respect to disaster preparedness and
mitigation.

Q15. Accidents are the most common cause of injuries and they impose a huge socio-economic
cost in terms of untimely deaths, injuries and loss of potential income. As per the

E
government statistics majority of South Indian states are suffering through this man-
made disaster. Elaborate the issues involved and steps needed.
OR
SC
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[88] Disaster Management


GS Mains Paper-3 Workbook

DISASTER MANAGEMENT
Answer

1. Discuss the major reasons for the recent forest fires in the hills of Uttarakhand and Himachal
Pradesh. Suggest a strategy to combat the forest fire, with a particular focus on man-made
fire disasters.

Hints:

E
Wildfires have been an annual occurrence in Uttarakhand and Himachal Pradesh in the months

OR
starting from mid- February till mid-June till the rain starts. But this year they had been more
widespread and more intense engulfing a large area in their spate.

Both natural and man made reasons are responsible for forest fires.

Natural reasons:-
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The soil moisture is at its lowest during this pre-monsoon season associated with high
temperatures and negligible atmospheric moisture leading to forest fire.

The coniferous trees in the Himalayan region like fir, spruce, citrus deodra are more prone
to fire.

With large scale expansion of chir forest, the frequency and intensity of forest fire has
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increased.

Climate change

Man made reasons:-

Slash and burn agricultural practice where the farmers set a land to fire to clear the land
for agriculture leads to forest fires.

Large population growth leading to demand of more food and land for other purposes.

Strategies to combat forest fire:-

The effective intervention of community-led vanpanchayats (forest councils) in preventing


fires. Multistakeholder approach will lead to successful implementation of any strategy.

Progress can be made also by providing environmental education to local residents and
officials.

Significantly, the use of biomass alternatives, including cooking gas, has had a beneficial
impact on fire risk, and this must be expanded.
Hints: Disaster Management [89]
Equally, the clearing of ecologically important natural oak forests can be reduced by tapping
the plantation sector, which could give preference to growing useful fodder and timber trees.

Saving what remains of old forests and stopping further spread of pine trees planted over
several decades for narrow economic reasons, are crucial for the health of the Western
Himalayas.

In addition to the ongoing schemes for forest fire management, the Government is also
considering for setting up of a National Institute of Forest Fire Management with satellite
centres in different parts of India with an objective to bring the latest forest fire fighting
technologies to India through proper research, training of personnel

Effective fire fighting tools and machinery- Provision of modern and effective tools and
machinery e.g. Fire Beater, Forest Fire Showel, Pulaskis Tool, Fire Rake, McLeod Tools, Brush
Tools, Power Blowers, Back-Pack Pump Sets, Fire Tenders etc

Daily listing of forest fire information and also provides a forest fire map. Then there are pre-

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and post-fire warnings to look at and also forest sensitive zone maps. All this information
need to be available right up to the district and tehsil levels.

2. OR
The work of NDRF has been praised globally for short-run disaster mitigation; however, it
is criticized, when it comes to long-term disaster prevention strategy. Critically analyse.

Hints:
National Disaster Response Force set up under National Disaster Management Act, 2005, is a
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specialized force constituted "for the purpose of specialist response to a threatening disaster
situation or disaster" in India.

NDRF has proved its importance in achieving this vision by highly skilled rescue and relief
operations, regular and intensive training and re-training, familiarization exercises within the
area of responsibility of respective NDRF, carrying out mock drills and joint exercises with the
various stakeholders.
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Its work for rehabilitation and evacuation during cyclone Phailin, was praised worldwide for
professionalism it was conducted with, it was not only done in least affecting manner to common
life, but was also done in very small amount of life with minimum losses. Unlike previous
disasters, it didnt prove to be very destructive, primarily because of efforts made by NDRF.

Similarly, its rescue work during the earthquake and subsequent tsunami that had struck the
Japanese town Onagawa in 2011, also attracted lot of praise in Japanese media and international
circles. Similarly the NDRF was the first team to reach Nepal during the 2015 earthquake and
did considerable work for the rescue and rehabilitation.

However, unlike it short-term disaster response action, its work towards achievement of long
term objectives for sustainable environment and disaster preparedness has been very slow and
marred by bureaucratic apathy, much because those tasks are under multiple agencies and
departments, creating confusion regarding the responsibility.

Similarly, the involvement of NDRF in day-to-day life to influence lifestyle is very less as most
of long-term changes require lifestyle shifts and would also require much broader authorities and
financial resources. Thus its performance towards 2 of its major objectives, viz, Community
Capacity Building Programme, Public Awareness Campaign, has been very weak.
[90] Hints: Disaster Management
3. Psychological Rehabilitation is complex in comparison to Physical and Social Rehabilitation
in post disaster recovery. Examine the efforts taken for it in post disaster period.

Hints:
Psychological rehabilitation includes
Service and support provided, with professional intervention, to people suffering from the long
term effects of disasters during post recovery phase to assist them in the performance of self-
directed, self-satisfying functional life tasks.
It is vital that psychological social support is provided after the disasters using coordinated
efforts. It is important to recognise the impact that disasters can have on the social cohesion
of communities.
The process of psychological rehabilitation is more complex than merely providing physical
help in the form of food, medicines and financial resources. It is a process which requires
a long time as mental coping of the disaster takes a long time. Dealing with victims psychology

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is a very sensitive issue and must be dealt with caution and concern. The psychological
trauma of losing relatives and friends, and the scars of the shock of disaster event can take
much longer to heal.

1.
OR
The efforts that have been taken include:
Crisis Counseling Program (CCP). The Federal Emergency Management Agency (FEMA)
supports CCPs for survivors of federally-declared disasters. CCPs focus on both those affected
by the disaster and the community as a whole. They provide survivors with practical help
SC
in coping with their current issues. They focus not just on those at highest risk for problems,
but also on providing resources to make the whole community stronger.
2. Skills in Psychological Recovery (SPR) is another model. SPR works to teach those exposed
to all types of trauma skills that will help them be more resilient. SPR is given by trained and
supervised crisis counselors. They develop skills, including:
Problem-solving
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Planning more positive and meaningful activities


Managing stress and reactions to the disaster
Engaging in more helpful thinking
Building healthy social connections
3. For those in need of more intensive services, treatment may be needed for problems such as
PTSD, anxiety, panic, depression, or guilt. For this, there is cognitive behavioral therapy
(CBT), a recommended treatment for trauma and PTSD.
4. Another technique of a trauma treatment tailored to disaster survivors is Cognitive Behavioral
Treatment for Post-disaster Distress (CBT-PD). This is a 12-session program during which survivors
are:
Taught about their symptoms
Given a breathing technique to manage anxiety
Directed to engage in pleasant activities
Hints: Disaster Management [91]
4. Disaster Mechanism of India includes dedicated forces like National Disaster Relief Force
(NDRF) and institutions like the CRC, NCDM, NIDM for the same but then also security
forces are deployed in the management of disaster and hazards in India. Why is it so?
Discuss the steps needed for strengthening the institutional mechanism for disaster
management.
Hints:
The existing disaster response mechanisms in India are as follows:
1. The new mechanism through National Disaster Management Act, 2005 has led to
establishment of disaster management institutions at the national, state and district levels as
National Disaster Management Authority (NDMA) headed by the Prime Minister, State
Disaster Management Authorities (SDMAs) headed by Chief Ministers, and District Disaster
Management Authorities (DDMAs) headed by district collectors/magistrates.
2. A specialist response force called NDRF to tackle all types of disaster, including nuclear,
biological and chemical disasters.

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3. National Crisis Management Committee that includes cabinet secretary and secretaries of
other departments that are in charge of dealing with crises and giving directions to the Crisis
Management Group.
OR
However, despite having these forces and institutions, the govt needs to take the help of armed
forces when a disaster occurs. This shows the lack of effective functioning of the existing mechanism
in place.
The reasons for this are as:
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1. Shortage of trained manpower and training facilities.


2. Lack of proper remunerative facilities and less salary than the counterparts causes the
paramilitary forces aversion in joining NDRF.
3. It is complained that the NDRF are not given as much appraisal as their counterparts in
spite of their risky work.
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4. NDRF is also suffered from the ambiguity of command and control structure. NDMA has
administrative control over NDRF and MHA provide the force with financial resources.
Hence it vacillates between both of them for the action and it causes the delay in relief
processes.
5. The local security and the armed forces are well prepared to deal with such catastrophic
events so they are asked for help first.
6. The local forces are well known to the area in terms of terrain and so are able to carry out
the work faster than the NDRF which usually has been known for arriving late at times.
Steps needed for strengthening institutional mechanism for disaster management:
Either home secretary or NDMA secretary should be given the entire responsibility to manage
a disaster. This will reduce response time which is very long at present.
NDMA should be empowered to give directions to a state to comply with its guidelines
Fire and civil defence authorities should be brought under NDMA
NDMA clearance should be taken before construction in flood-prone and earthquake-prone
areas
[92] Hints: Disaster Management
National Disaster Mitigation Fund should be created
There is a need for more coordination between NDMA, SDMA AND DDMA.
India still lacks an advisory committee to NDMA since 2010. This hampers the formulation
of an effective plan during need.
Only few states have constituted State Disaster Response Force. Even the local Regional
Response Centres are ill equipped. So the forces should be increased both in number and
capacity.
One national force is not enough; each State must build and maintain its own State- and
district-level response units. NDMA guidelines say that States must have a contingency
plan that ranges from making vulnerability studies to preparing lists of sources that can be
tapped for trucks, food or blankets; lists of doctors who can be called for trauma duty or
post-mortems; and even firewood suppliers for mass cremations.
States should be mandated to train personnel from the fire, police, and home guards

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departments and keep them disaster-ready thus supplementing the efforts of already existing
forces in place.
5.
OR
Sustainable poverty reduction is proving to be an elusive goal and this is particularly
because disasters are not being properly factored into development. In this context discuss
the need and aim for adoption of Disaster Risk Reduction (DRR) Strategies in the
Programmes and Schemes aimed at poverty alleviation and development.
Hints:
SC

Initially reducing poverty was seen more as supplementing growth with social spending and
was based on monetary measures alone. Whereas, disasters were treated as one-off events
responded by Government and Relief Agencies.
The development process does not necessarily reduce vulnerability to natural hazards. Instead,
it can unwittingly create new forms of vulnerability or exacerbate existing ones, impeding
GS

efforts to reduce poverty and promote growth, sometimes with tragic consequences.
'Win-win' solutions for securing sustainable development, reducing poverty and strengthening
hazard resilience, therefore, need to be explicitly and actively sought, particularly as climate
change looks set to increase the incidence of droughts and floods and the intensity of
windstorms. Such solutions are best derived by integrating disaster risk reduction strategies
and measures within the overall development framework, viewing disaster risk reduction as
an integral component of the development process rather than as an end in its own right.
Natural disasters cause immense loss of life and damage to property wherever it occurs. Be
it earthquake, cyclone, flood flash, drought, storm surge or Tsunami the hazard level is equal
to all sections of humanity. However, the vulnerability or the extent of exposure for
communities or sections of society differs. The poor and the marginalized sections of the
society, by virtue of their poverty are much more affected by the vagaries of nature's fury
than the normal populace.
Incorporating Disaster Risk Reduction measures in Rural Poverty Alleviation Programmes
can effectively help in reduction/eradication of poverty in rural India. The Disaster Risk
Reduction measures to be incorporated into the programmes and schemes of the Government
include Structural and Non-Structural measures.
Hints: Disaster Management [93]
Non-Structural measures can be further categorized as Risk Avoidance Measure and Risk
Spreading Measure.
a) Risk Avoidance Measure: Discourage location of settlements, infrastructure and
economic activities in known hazardous areas by the (i) Land use Regulation/Ordinance
(ii) Financial Incentives or Penalties (iii) Disclosure of Risk Information, (iv) Public
Infrastructure Policy (v) Natural Resource Management Policy.
b) Risk Spreading Measures: The Risk Spreading Measures are (i) Property damage and
revenue loss insurance (ii) Crop diversification (iii) Redundancy in lifeline systems.
Vulnerability Reduction Measures (Structural Measures): Physical measures designed to
enhance Natural Hazard impacts by retrofitting of existing structures, use of appropriate
building standards, reducing hazard proneness of the site (dams, retaining walls, wind
breaks). Particularly, the schemes operated by the Ministry of Rural Development can be
classified into Self Employment Programme (SGSY, NRLM), Wage Employment Programme
(MNREGA), Housing Programme (IAY, PMGY), Rural Roads and Connectivity (PMGSY),

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and Area Development Programme (DPAP, DAP) and Rural Sanitation Campaign should
include DRR strategies.
Supplementary Reading OR
The various DRR initiatives which can be incorporated in the Poverty Alleviation Programmes
which can make them disaster proof. It is an established fact that during most disasters, the
houses are damaged either partially or fully and the poor families are forced to live in relief
shelters. Depending upon the type of the natural calamity/ disasters, severity of the damage to
SC

the houses is also related to the type of the dwelling unit/houses.


According to the Census details available, rural houses can be categorized into (1) Kucha super
structure-kucha roof (2) Pucca super structure-kucha roof (3) Pucca super structure- pucca roof,
which can be broadly identified as thatched house, earthen wallthatched roof house, earthen
walltiled roof house, masonry wallthatched roof, masonry wall-tiled roof, masonry wall-sheeted
roof and masonry wall RCC roof. If an earthquake occurs, all these categories of houses may be
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subjected to destruction/damage, whereas, during cyclone, the roofing in hut, tiled and sheeted
houses will be damaged. In flash floods, the earthen walls and thatched super structured houses
will be affected.
Therefore, the DRR initiatives in the form of simple framed structure when, earthquake resistant
design is incorporated in the type design of the IAY/PMGY housing schemes, the threat posed
by earthquake, cyclone, flash flood, storm surges can be successfully over come. Also, the concept
/practice of insuring the houses could be made mandatory to ensure replacement in case of
destruction/damage.
Incorporating earthquake proof or earthquake resistant design into the plan and execution of a
residential house by the poor and marginalized sections of the society is a tall order. However,
there can be found simpler methods and processes for adopting the disaster proof design in
constructing a typical cost effective shelter for the poor which can withstand the fury of annual
calamities. As we are aware, severe cyclonic storms and flash floods are more or less becoming
annual features which cause minimal to severe damages to households. Disasters of lesser intensity
like gale winds and heavy rain may cause partial damages to the house like roof being torn away
or earthen walls collapsing, etc. may require the poor to spend out of his hard earned wages to
repair and restore the partial damage. As this continues to be a recurring phenomena, much
earned savings are annually channeled toward restoration of the damage to his shelter.
[94] Hints: Disaster Management
6. For effective disaster management, the human resource development will have to be made
systematic. Mere training alone is not enough to develop the capacities. In this context
analyse the role of human resources in disaster management and suggest concrete measures
for human resource development.
Hints:
Achieving the goal of an holistic approach to disaster management need a framework of a
capable institutional setup with competent professionals, educators, trainers and field
practiceners in different aspects of the disaster management, starting from addressing hazards
and vulnerability, prevention and mitigation, preparedness, early warning, relief and recovery
to be planned and their deliveries organized in a systematic fashion.
India's disaster management institutions and systems are largely with the government as the
key responders and other institutions such as corporate, civil society, NGOs and the
community assist as support at the time of disasters.
Professionals working with the government posted in the vulnerable districts as district

E
collectors or as second in command and down the line and in other line department officers
hardly get an opportunity to get trained on the issues related to disaster management.

OR
Disaster management is a very specialized and highly skilled job. This cannot be undertaken
unprofessionally with ad-hoc approach. In the most vulnerable and disaster prone districts
of the country there is absolutely no practice of checking the background of the person of
his or her experience in disaster management. There are many different considerations for
the posting in the district rather than disaster management considerations, hence, there is
a wide gap in the knowledge, skills and attitude of the "disaster managers" to cater the need
for disaster prevention, mitigation, preparedness and response.
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The human resource and capacity development plan need to focus on (a) Knowledge, (b)
Skills and (c) Attitude to help improve the proficiency of the performing stakeholders. The
means of achieving the DRR objectives, the goal set for Disaster Management and Risk
Reduction Capacity Development (DMRR) are to develop self reliance in understanding
risks associated with hazards & vulnerability, planning & reducing risk and preparing for
the residual risk of disasters, with maintaining ability of resilience for recovery.
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In order to develop proficient capacities of disaster management and risk reduction related
expertise and services in the country, it is utmost important to raise a section of practitioners,
professionals, educators and trainers as an identified Cadre of DM Professionals. Following
are the means envisaged towards developing and promoting a DM Cadre of professionals.
(a) Paradigm shift from 'in-service training centric' to 'induction training and education' centric
(b) Honors mode of Specialization-cadre Raising on DRM (from Civil and allied services)
(c) Specialization modules of interdisciplinary higher education on DRM,
(d) Super-specializations DRM related modules of research based courses in higher and
professional education.
(e) Specific course programmes on specific aspects of DRM (Degree, Diploma and Post-
Graduation).
(f) DRM educators and trainers.
(g) DRM service practitioners (emergency service managers).
(h) Emergency service volunteers.
Hints: Disaster Management [95]
7. Comment on the role of information technology in disaster management and cite some
examples of successful use of IT in disaster management in India.
Hints:
IT is changing every aspect of human life. It enhances the quality and effectiveness of trade,
manufacturing, services, and other aspects of human life such as education, research, culture,
entertainment, communication, national security, etc. Disaster management needs drastic
improvements in its sources to decrease damage and save the life of people. To achieve this
main object, disaster management has to face challenges for data collection, data management,
translation integration and communication. IT plays crucial role in this respect. The
information needs of disaster managers fall into three distinct, but closely related, categories
of activities, viz:
Pre-disaster activities: risk assessment, prevention, mitigation and preparedness; analysis
and research (to improve the existing knowledge base).
During disaster : emergency response activities, and

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Post-disaster activities: rehabilitation, response and reconstruction.

OR
Accordingly, there are three categories of disaster-related data:
Pre-disaster: baseline data about the country and risks;
During disaster: handling of emergency responses and
Post-disaster: real-time data about the impact of a disaster and the resources available to
combat it.
SC

The advanced techniques of information technology such as remote sensing, satellite


communication, GIS, etc. can help in planning and implementation of disaster management.
For example, the India Disaster Resource Network (www.idn.gov.in), initiated by the Ministry
of Home Affairs of India in collaboration with UNDP, is a nationwide electronic inventory
of resources for disaster management.
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Application of Information Technology in Disaster Management


Natural disasters and its effects can be minimized with the help of recent tools of information
technology. GIS, remote sensing and internet can be of immense use. Following are the areas
of disaster where recent techniques of electronic communication can be used.
Drought: advanced tools of information technology such as GIS, remote sensing can be used
in drought area. It will help to plan for organizing relief work. It can be used to locate,
assess, and monitor drought conditions of specific areas.
Flood: GIS, remote sensing can be used in flood area for mappings and monitoring flood
areas, damage conditions and other flood effects. It can also be used to conduct post flood
surveys. Flood forecast and warnings can be used to alert public and for taking appropriate
actions.
Landslide: Electronic tools can be used to provide help concerning location, extent of slope,
area to be affected and trend of mass movement of the slop mass.
Earthquake: An earthquake (also known as a quake or tremor) is a violent movement of the
rocks in the earth's crust. This creates seismic waves, waves of energy that travel through
the Earth. GIS and remote sensing can be used for preparing hazards maps in order to assess
the nature of risk.
[96] Hints: Disaster Management
Cyclone: A cyclone is a storm accompanied by high speed whistling and howling winds. It
brings torrential rains. A cyclone causes heavy floods. Advanced techniques like, GIS, remote
sensing tools can be used to identify the vulnerable population with the single hazard
component. These tools can be used to calculate state level population affected by different
type of storms. But, calculating vulnerability by GIS with multiple hazards and coping
capacity is not easy job for decision makers.
8. Industrial disasters are the worst man-made disasters which could be described as cost of
unplanned development. Comment.
Hints:
Unlike natural disasters like cyclone, flood, tsunami; chemical and industrial disasters are
non inevitable, and hence, there exist the concept of 'zero tolerance' as the standard for
disaster prevention.
Human errors - operational dimensions and availability of relevant information during various
phases of disaster management have emerged as critical areas of concern. Proper decisions

E
starting from site selection, public participation in clearance, industrial layout planning,
disaster mitigation measures, on-site and off-site emergency coordination planning play key
roles in furthering the objectives of a comprehensive framework of disaster management at

local and district level.


OR
Industrial disasters are disasters caused by chemical, mechanical, civil, electrical or other process
failures due to accident, negligence or incompetence, in an industrial plant which may spill
over to the areas outside the plant or with in, causing damage to life, property and environment.
Chemical and industrial emergencies may arise in a number of ways:
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disaster/explosion in a plant handling or producing toxic substances
accidents in storage facilities handling large and various quantities of chemicals
accidents during the transportation of chemicals from one site to another
misuse of chemicals, resulting in contamination of food stocks or the environment, overdosing
of agrochemicals
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improper waste management such as uncontrolled dumping of toxic


chemicals, failure in waste management systems or accidents in wastewater treatment plants
technological system failures
failures of plant safety design or plant components
natural hazards such as fire, earthquakes, landslides
arson and sabotage
human error
9. Disaster prevention and preparedness should be considered as an integral aspect of
development policy and planning at local, state, and national level. Elaborate.
Hints:
Disaster risk reduction (disaster reduction) has been defined as the 'systematic development
and application of policies, strategies and practices to minimise vulnerabilities, hazards and
the unfolding of disaster impacts throughout a society, in the broad context of sustainable
development'.
Hints: Disaster Management [97]
Disaster reduction strategies include appraisal of likelihood and intensity of hazards and
analysis of vulnerabilities thereto of the community. Building of institutional capabilities and
community preparedness is the next step.
Long term disaster mitigation/prevention plans include major capital intensive activities
such as training of water courses, construction of protective bunds, afforestation, plantation
of drought resistant vegetation, construction of shelters, raising embankments, retrofitting of
buildings, permanent relocation of vulnerable settlements etc, which can sometimes have
inter-district or even inter-state ramifications.
Therefore, the long term plans may have to encompass block, district, state and national
levels and once the national and state level works have been detailed; the works, which
would be taken up at the district, block and panchayat level can be planned. It has also been
noted that since the benefits from such works are not experienced in the short term, local
bodies tend to give low priority to such works and consequently not many are taken up.
Therefore, the immediate supervisory level should ensure that while preparing their annual
developmental plans, the long term works included in the disaster plan are given priority

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and they do not remain "paper plans".
The activities in the disaster management plans should be included in the development plans

OR
of the line agencies and local bodies like panchayats and municipal bodies.
The supervisory level of each agency should ensure that the annual plan of that agency
incorporates the activities listed out in the disaster management plan on a priority basis.
Building byelaws should incorporate the disaster resistant features of buildings. Since safety
codes are complex and technical, it is necessary to issue simplified guidelines which could
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be understood by citizens. Further, these codes should be implemented in the most hazard
prone areas, on priority.
Effective enforcement of laws on encroachments, public health and safety, industrial safety,
fire hazards, safety at public places should be ensured. The same applies to zoning regulations
and building byelaws.
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Disaster Risk Reduction also needs to be included in the curricula in Schools and Colleges
to inculcate the culture of safety and prevention among the children.
10. 'Disaster Management' as a subject is not mentioned in any of the three lists. A subject not
specifically mentioned in any of these lists comes under the Residuary Powers of the Union
under entry 97 of the Union List. This renders effective disaster management very difficult
in the country. Critically analyse the need for the changes in the constitutional provisions
for Disaster Management.
Hints:
Disaster management encompasses all activities including preparedness, early warning systems,
rescue, relief and rehabilitation. The term disaster includes natural calamities, health related
disasters (epidemics), industrial disasters and disasters caused by hostile elements such as
terrorists.
There are already various entries in the three lists, which deal with some aspect or other of
disaster management.
According to present status, Parliament has the competence to legislate on the subject of
disaster management. However, by practice and convention the primary responsibility for
managing disasters rests with the State Governments.
[98] Hints: Disaster Management
Parliament has enacted the Disaster Management Act, 2005 by invoking entry 23 namely
'Social security and social insurance, employment and unemployment' in the Concurrent List
even though all aspects of crisis management cannot be said to be covered by this entry.
Similarly, some States have also passed laws governing disaster management.
'Public order' finds a place in the State List, as does Public Health. Entries 14 and 17 in the State
List deal with Agriculture and Water respectively. Environment and Social Security are included
in the Concurrent List. Atomic energy and Railways are part of the Union List. In addition,
after the 73rd and 74th amendments all civic powers have been delegated to local bodies.
Due to the cross cutting nature of activities that constitute disaster management and the
vertical and horizontal linkages required which involve coordination between the Union,
State and local governments on the one hand and a host of government departments and
agencies on the other; setting up of a broadly uniform institutional framework at all levels
is of paramount importance to meet the crisis efficiently.
The legislative underpinning for such a framework would need to ensure congruence and
coherence with regard to the division of labour and responsibilities among the agencies at

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the Union, State and other levels.
This could best be achieved if the subject of Disaster Management (as a single entity) is

OR
placed in the Concurrent List of the Constitution. Unlike in other cases of proposals for
inclusion in the Concurrent List, State Governments may also welcome this, as this will also
enable them to have legislation without ambiguity regarding the entry.
This may help in defining the roles and responsibility of each department and level clearly
without any overlapping and ambiguity.
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11. Lack of coordination among the various agencies involved in intelligence and enforcement
is described as a major impediment in maintaining internal security. What measures have
been undertaken by the government in recent times to overcome this problem?
Hints:
The various Intelligence agencies in India with their responsibilities are as follows:
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Intelligence Bureau (IB) - deals with internal intelligence.


Research and Analysis Wing (RAW) - deals with foreign intelligence.
National Technical Research Organization (NTRO) - technical intelligence agency under
NSA in PMO.
Directorate of Revenue Intelligence - under Central Board of Excise and Customs.
Narcotics Control Bureau - Intelligence agency for fighting drug trafficking.
Multitude of agencies always causes confusion and lack of cooperation, however, specialized
needs for various objectives also necessitates maintaining such multitude despite the drawbacks.
The office of NSA in India was founded in 1998 in order to reduce such confusion and to
have an apex office that deals with the security issues in India.
The directors of R&AW and IB technically report to the NSA rather than the Prime Minister,
external affairs minister, or Home Minister directly.
While this has partially streamlined the issue of coordination, but it also has led to power
tussle between the home minister and NSA on various occasions. Similarly, Apex-level
political decisions on security issues are taken by the Cabinet Committee on Security (CCS),
which is assisted by a core group of bureaucrats, including heads of Intelligence agencies.
Hints: Disaster Management [99]
Discussions in the CCS and the core group tend to remain restricted to immediate or emergent
security problems. There is seldom the inclination to devote time to debate, analyze and
develop long-term policy options, strategies or consequences.
Measures undertaken by the government:
National Investigative Agency (NIA) was established under NIA act 2008 to deal with specific
cases under specific acts.
Proposed NCTC (National Counter Terrorism Centre) which is modeled on USA NCTC and it
will act as a Federal agency to gather real time information to stop terrorist activities and ensure
coordination.
12. Understanding the gender implications and facets of natural disasters and climate change
is critical to effective disaster risk management practices that enable communities and
countries to be disaster resilient. Elaborate.
Hints:

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Women and men experience, perceive and identify risks differently. Everyone can be equally
exposed to a hazard, but women and men have different levels of vulnerability and access

OR
to resources, and have therefore developed different coping skills.
Women and girls generally tend to be the main victims of natural disasters. A few commonly
recorded reasons for higher death tolls among women and girls include: cultural constraints
on female mobility which hinder self-rescue, for example, women may not leave the home
without male permission, they may be reluctant to seek shelter because shared communal
facilities do not have separate, private spaces for women or clothing may have been damaged,
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lack of skills such as swimming or tree climbing, which are traditionally taught to males, less
physical strength than males, in part due to biological differences but, in some countries, also
due to the effects of prolonged nutritional deficiencies caused by less access to food than men
and boys.
The negative impact of risk therefore depends on the characteristics and intensity of the
hazard, and the vulnerability and capacities of the people exposed to the hazard.
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Hence Women and men's differentiated needs and skills must be taken into account during
vulnerability and capacity analysis, in order to develop comprehensive gender sensitive risk
assessments as well as carry out more adequate emergency management and response.
Implementing accurate gender-based risk assessments is a key element for increasing the
capacity and effectiveness of India's emergency management systems.
This will allow the collection of significant information that adequately reflects the views of
men and women for the purpose of strengthening disaster management planning in
prevention, preparedness, mitigation and response.
Efforts should be to move beyond humanitarian assistance and relief programs to more long-
term development programs must be informed by a gender perspective to be effective in
securing sustainable, people-centred development.
Hence Rights-Based Approach (RBA) should be the overall guiding approach to mainstream
gender perspectives in disaster management. It opens the way to upholding the full range
of human rights of men and women in socioeconomic development processes.
This does not mean that women and men should receive exactly the same support, but
rather that the specific needs and priorities of both women and men are taken into
[100] Hints: Disaster Management
consideration in planning processes and allocation of resources. Programmes must be developed
on the basis of a greater understanding of the gender-specific needs in emergency situations
- because of differential impacts of disasters - in relation to health, education, shelter, food
supplies, water and sanitation, energy and other basic supplies, as well as employment and
income generating opportunities.
13. Insurance is a potentially important mitigation measure in disaster-prone areas as it brings
quality in the infrastructure & consciousness and a culture of safety. Critically analyse the
importance of insurance in disaster management in developing countries like India.
Hints:
Post disaster funding is an important element of crisis management but excessive dependence
on it creates a regime where there are no incentives for adoption of risk reduction methods
by individuals, agencies and governments, thus insurance brings quality in infrastructure
and a culture of safety.
Disaster insurance mostly works under the premise of 'higher the risk higher the premium,

E
lesser the risk lesser the premium', thus creating awareness towards vulnerable areas and
motivating people to settle in relatively safer areas.

OR
However, the large sections of low income populations coupled with low penetration by the
insurance companies poses a major challenge to provide insurance cover to the vulnerable
sections.
Even the small amount of insurance coverage that is available in practice tends to be limited
to major commercial properties in urban areas. With the level of insurance negligible
Catastrophe protection for better off is negligible.
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The key constraint on insurance market development is low per capita income, since low
income consumers have less discretionary income and fewer assets to insure.
Government and the insurance companies should play a more pro-active role in motivating
citizens in vulnerable areas to take insurance cover. This could be done through suitably
designed insurance policies, if required, with part funding from government.
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Further following the success of micro-credit for rural development, micro-insurance can
emerge as a tool for ex ante risk management. In fact, micro-credit and micro-insurance
support each other. Several government agencies and NGOs have come forward in this field,
but their efforts need to be scaled up.
NDMA could play a major facilitating role in this area.
14. The role of NGOs in disaster management is usually seen as a remedy provider and rescuer.
Critically analyse the role of NGOs with respect to disaster preparedness and mitigation.
Hints:
A non-governmental organization (NGO) is any non-profit, voluntary citizens' group which
is organized on a local, national or international level. Task-oriented and driven by people
with a common interest, NGOs perform a variety of services and humanitarian functions.
The role of NGOs remains crucial in all phases of disaster management namely relief, response,
rehabilitation, reconstruction, recovery, preparedness and mitigation.
But in recent trends the role of Non-Governmental Organisations (NGOs) is more in the relief
and response efforts especially with respect to facilitating communication and coordination
between the administration and the affected community by providing basic amenities at the
ground level.
Hints: Disaster Management [101]
But NGOs also can play a crucial role in disaster preparedness and mitigation.
The DM Act, 2005 provides the legislative back-up to enable collaborative mechanisms at all
levels for participation and joint/coordinated action by Government and NGOs in planning,
learning and action for disaster preparedness.
In the disaster preparedness and mitigation the role of NGO is as follows:
a) NGOs are powerful advocacy institutions and would collaborate with the Government
in reviewing various sectoral policies to ensure that Disaster Preparedness concerns are
addressed.
b) It identifies available resources and capacities within the community to overcome
vulnerabilities and address risks and build the capacities of the community (Disaster
Management Committees & Taskforces) and other government officials at district and
state level to undertake activities in various thematic areas which will result in the
integration of the same in the Disaster Management or other departmental plans and
may also facilitate preparation of the Plans by involving the local communities and the

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Panchayat Raj Institutions.
c) NGOs with their long standing experience in the areas of community mobilisation,
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social inclusion and participatory approaches become effective partners of government
action planning and ensure that the developmental planning in a vulnerable geography
is inclusive for all resident and dependent communities regardless of their identity
(caste, gender and ethnicity), economic backgrounds and physical abilities, to prepare
and respond adequately to disasters.
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d) Awareness campaigns like safe construction, school safety, personal health and hygiene,
environment management, maternal health, food and nutrition, and overall sustainable
development are key areas of NGOs operations. NGOs use local folk media besides
using other modes of communications for the awareness campaigns.
But lack of transparency and accountability in NGOs has placed a question mark in their
vision and mission. Further the role of NGOs in disaster preparedness and mitigation depends
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on citizen participation and diversity in Indian society in terms of caste, creed and religion
act as a barrier for development of proper coordination between citizen and government
with NGOs as a mediator.
15. Accidents are the most common cause of injuries and they impose a huge socio-economic
cost in terms of untimely deaths, injuries and loss of potential income. As per the government
statistics majority of South Indian states are suffering through this man-made disaster.
Elaborate the issues involved and steps needed.
Hints:
Accidental disasters means threats having an element of human intent, negligence, or error;
or involving a failure of a human-made system. It either can result in huge losses of life and
property as well as damage to peoples' mental, physical and social well-being.
It includes disasters due to:
a) Hazardous materials
b) Power service disruption &blackout
c) Nuclear power plant and nuclear blast
[102] Hints: Disaster Management
d) Radiological emergencies
e) Chemical threat and biological weapons
f) Cyber attacks
g) Explosion
h) Civil unrest
Some of the accident related disasters faced in recent times in south India are Kollam temple
fire in Kerala, Chennai floods, Sabrimala Temple Stampede in 2011, fire at ONGC platform
at Bombay High in 2005.
All these accidents point in only one direction i.e. failure to take preventive steps and
violation of the established procedures. Some of the reasons for these kinds of disasters are:
a) Absence of proper regulations: Though we have environment clearance mechanism
for industries but there is no such mechanism for human settlements. In case of

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urbanization the urban spaces are built on ecologically important flood plains of rivers
or on water bodies like wetlands, ponds. Chennai floods are examples of that.
b)
OR
Violation of rules: Many a times the established rules are ignored. In recent fire accident
in Kollam temple fire the advice of administration was ignored because of political
reasons. The Kerala Fire and Rescue Services had not given clearance for the fireworks
display and even the banned chemicals were used.
c) Incapacity of the administration to manage large crowds was evident in Andhra
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stampede on the banks of river Godavari during Pushkaram ceremony.
d) Many a times the administration is unaware of the causes of accidents, it effects and
immediate curative steps which should be taken, especially in case of chemical accidents.
e) Further there is an increase in traffic - rail and road - without adequate safeguards and
safety measures. Unmanned railway crossings are a big hazard for the movement of
various types of traffic, and are often the site of major rail-road accidents.
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Thus the reasons are: non-enforcement of laws, lack of safety conscience, poor infrastructure
conditions, poorly maintained vehicles, and overcrowding. In addition, emergency medical
facilities for the accidents, particularly outside the cities were lacking.
The steps needed are:
a) Creation of sufficient regulatory mechanism like establishment River Regulation Zones
along river to prevent unwanted settlements ensuing threats to floods.
b) Detailed Disaster Management plan for each municipality and gram panchayat according
to vulnerability should be mandatory done.
c) Strict enforcement of laws and regulations like fire safety regulations etc.
d) Capacity building of administration to handle large congregations, provision on sufficient
funds to provide latest tools to handle disasters like fire fighting units etc.
e) Provision of insurance for disasters which will create a culture of safety among all
stakeholders.

Hints: Disaster Management [103]


GS Mains Paper-3 Workbook

INTERNAL SECURITY
Practice Questions

Q1. The rampant drug abuse in Punjab has not only the financial implications for India, but
it also affects its agriculture and security; elaborate and discuss measures to control the
menace.

Q2. The new Cyber Security Policy fails to create adequate cyber infrastructure for the
upcoming challenges. Critically analyse.

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Q3. Maoism or Naxalism in India is merely a euphemism/veil to legitimize the illegal and
OR
immoral armed rebellion, in reality the practitioners don't follow any morals or principles
that they preach or expect the government to follow. Critically analyse.

Q4. The armed forces in India are suffering from multiple demoralizing factors; this is also
revealed by the increasing suicides among soldiers and poor response among youth to
join armed forces. Elaborate.
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Q5. "The echo of words written on social media is greater than spoken in public and therefore
needs greater regulation". In light of the above statement examine the need and feasibility
of such regulations. Does India need a separate social media policy?

Q6. India's large coastline has been used for organized crimes like terrorism, drug trafficking
and human trafficking which highlighted the major gaps of security institutions and
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process followed. Discuss major factor which need to be taken care for securing India's
coastline from external threats. How State governments can support the efforts of Central
agencies?

Q7. What is the importance of Special Forces in military operations? Write a short note on
contribution of Special Forces of India.

Q8. The state of poor internal security situation is not because of India's unfavourable
strategic environment but also due to weak internal security mechanism, especially its
criminal justice system. In this context, suggest some concrete measures to streamline
the criminal justice system.

Q9. The average citizen is the worst-hit as fake bank-notes have become so deeply embedded
in the Indian economy that even bank branches and ATMs are disbursing counterfeit
currency. One estimate puts it at 10-20 per cent of the total currency notes in circulation
in India. Enumerate the adverse effects of fake currency circulation on the Indian
economy. What are the major sources of fake currency circulation in India and ways to
curb it?

Q10. Communal violence has been a major concern for the internal security of India. Give
reasons for the same and suggest effective measures to check it.
[104] Internal Security
Q11. There are multiple interconnected underlying causes responsible for the ethnic flare-up
in the North-East of India? Enumerate the major causes and suggest measures how to
improve the security scenario in the region.

Q12. What is the link between state and non state players in pervading terrorism? Give some
examples how India has been vulnerable in recent times due to collaboration between
these two forces?

Q13. Elucidate what are the components of border infrastructure. Critically evaluate the state
of border infrastructure in India.
Q14. What are various roles performed by the security forces during peace-time in India.
How do such activities help them in maintaining battle readiness?

Q15. 'Indian Police is not only incompetent, but also highly backward in terms of its arms
operation and technical abilities.' Elucidate the need for immediate police reforms in
the light of above statement.

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OR
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Internal Security [105]


GS Mains Paper-3 Workbook

INTERNAL SECURITY
Answer

1. The rampant drug abuse in Punjab has not only the financial implications for India, but it
also affects its agriculture and security; elaborate and discuss measures to control the
menace.

Hints:

E
The extent of drug addiction in Punjab is alarming. Near border areas the rate of heroin abuse
among 15 to 25 year olds is as high as 75% - the percentage is 73% in other rural areas throughout
OR
the region. A Department of Social Security Development of Women and Children suggested that
as many as 67% of rural households in Punjab will have at least one drug addict in the family.
There is at least one death due to drug overdose each week in the region.
Over the past decade, Punjab has experienced deceleration of its economy, and has been seeing
dwindling positions in the list of prosperous states of the country. Punjab, as of today, lags behind
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its counterparts, not only in terms of industrial growth but also in the agricultural sector, due to
stagnancy. There are no jobs, no future in farming, industry has literally moved out of the state, and
deep-rooted corruption has left the state in dismay. Punjabis who are famous for their courage,
hard work, honesty, compassion and enterprising approach towards life, are now losing these
attributes to the evil drugs.
The vibrancy of Punjab is virtually a myth. Many sell their blood to procure their daily doze of
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deadly drugs, even beg on streets for money to continue their addiction. The entire Punjab is in the
grip of drug hurricane which weakens the morale, physique and character of the youth. The state
is in the danger of losing the young generation.
This is coincidently the state which has been most important provider of soldiers and agricultural
produce. This is a new form of narco-terrorism, which is targeted at destroying the youth through
drug abuse.
The drug abuse has vital implications for India, not only it will destroy Punjab, but will also affect
india's food security and reduce the arms forces recruitment from one of its most important catchment
area.
Apart from this, the way recent attacks in Punjab have happened in Gurdaspur and Pathankot,
many security experts believe that Pakistan has now started to encash the deep rooted drug network
it has developed in state and it used the trail of drug dealers and peddlers to smuggle terrorists in
India.
All these are very dangerous implications for India and there are also chances that drug addicts,
which are easier to manipulate, could be used to reignite the Khalistan movement and already
intelligence reports hint towards revival of this movement in both India and Canada with active
support from Pakistan.
[106] Hints: Internal Security
2. The new Cyber Security Policy fails to create adequate cyber infrastructure for the upcoming
challenges. Critically analyse.

Hints:
The release of the National Cyber Security Policy 2013 was an important step towards securing the
cyber space of our country. However, there are certain areas which need further deliberations for
its actual implementation.
The provisions to take care security risks emanating due to use of new technologies e.g. Cloud
Computing, has not been addressed. Another area which is left untouched by this policy is tackling
the risks arising due to increased use of social networking sites by criminals and anti-national elements.
There is also a need to incorporate cybercrime tracking, cyber forensic capacity building and creation
of a platform for sharing and analysis of information between public and private sectors on continuous
basis.
The policy has a objective of creating a workforce of 500,000 professionals, but it needs further

E
deliberations as to whether this workforce will be trained to simply monitor the cyberspace or
trained to acquire offensive as well as defensive cyber security skill sets.

OR
A national policy must set out, in real and quantifiable terms, the objectives of the government in a
particular field within a specified time frame. To do that, the policy must provide the social, economic,
political and legal context prevalent at the time of its issue as well as a normative statement of
factual conditions it seeks to achieve at the time of its expiry.
Between these two points in time, the policy must identify and explain all the particular social,
economic, political and legal measures it intends to implement to secure its success. The present
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policy however, fails to identify and recognize these measures as well.
The NCSP's poor drafting, non-detailed provisions, deficiency of analysis and lack of stated measures
renders it hollow. Its notification into force adds little to the public or intellectual debate about
cybersecurity and does nothing to further the trajectory of either national security or democratic
freedoms in India.
3. Maoism or Naxalism in India is merely a euphemism/veil to legitimize the illegal and
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immoral armed rebellion, in reality the practitioners don't follow any morals or principles
that they preach or expect the government to follow. Critically analyse.

Hints:
Maoism in India, which is also called Naxalism is a doctrine, which believes in taking over the
power with the help of an armed uprising against the state, which it doesnt recognize as it argues,
the state doesnt represent the significant proportion of poor population.
However, just as any movement, legitimate or illegitimate, like Jihad ideology, requires a moral
backing, on the basis of which its cadre are ready to sacrifice their life. The naxalism infested areas
have large number of poor and illiterate people. They become easy prey of Maoist indoctrination,
which professes that the society is divided into two classes- haves and have-nots, which has
nothing to lose.
According to the doctrine, the first task is to eliminate the class enemies and since the government
is on the side of class enemies, i.e., the haves class, Naxals/Maoists should fight against the
government and its anti-people policies. The doctrine believes that for this fight even violent
movements are justified. The poor and illiterate are convinced by them in this way. But such a
doctrine is in fact very flawed.
Hints: Internal Security [107]
The armed forces that they kill mercilessly also comes from poor households of India and by preventing
the delivery of services in areas under their influence, these people have further hampered the
interests of people they are claiming to serve.
Similarly regarding corruption, the naxalism is equally infested with this problem as the government
and bureaucracy and they charge hefty protection fee from business groups operating there. Their
massacres and acts of oppression suggest only terrorism. A set of committed people have come
together and want to dictate the nations fate according to their belief. They do not care for the
peoples wishes and have taken upon themselves the task of leading the nation using the gun. The
ballot-box has no meaning in their life.
Naxalism is a political doctrine, which has become obsolete and largely irrelevant in the era of
development of modern democratic welfare states. The Naxal doctrine and its dangers need to
be demystified through measures for increased awareness and education and mechanisms like
right to food, right to education and right to information and implementation of these rights in
true Ernest.

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Since poor and illiterate people are vulnerable to Naxal doctrines, delivery of minimum basic needs
in such areas could wean them away from the violent movement. The government should take
proper steps for removal of poverty, unemployment and disease. Besides, it is also important to
OR
develop basic infrastructure such as water, electricity and roads etc. at the grass root level. This
would address the issues related to development deficit. Policing and intelligence is also very
important in achieving all these goals.
4. The armed forces in India are suffering from multiple demoralizing factors; this is also
revealed by the increasing suicides among soldiers and poor response among youth to join
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armed forces. Elaborate.

Hints:
The Indian Armed Forces are synonymous with honour, discipline, integrity, loyalty, courage, duty,
respect, sense of sacrifice, patriotism, selfless service, moral values and ethics. It would not be
erroneous to say that the expectation level of integrity and moral values of defence personnel is
much higher than their civilian counterparts who gladly enjoy the liberty to abdicate under conditions
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of stress!
However, off-late, particularly in last decade, the Indian army has lost more soldiers to suicides
triggered by low morale instead of enemy. Though they have not fought a full-blown war in decades,
the force is bogged down in fighting domestic insurgencies, guarding restive borders and sometimes
quelling civilian rioting.
These long term and low-intensity conflict zone are often more stressful then the full-blown wars,
where enemy is clear and targets are immediate, here targets are own countrymen. However,
operating in a tension-ridden counter-insurgency environment does lead to certain stress among
the soldiers, but that is only one of the factors.
The main worry are the problems back home - land disputes, tensions within the family; then
there's rising aspirations, a lack of good pay and allowances, and also the falling standards of
supervision from officers.
Company commanders who lead field units in counter-insurgency situations also believe that
tensions at home transmit themselves much quicker today due to the mobile phone.
Since almost 80 per cent of India's foot soldiers come from rural and semi-urban areas, most of them
have strong links with the land. For the ordinary soldier, the smallest patch of land back home is the
[108] Hints: Internal Security
most precious property. Very often land gets encroached in his native village, or there is a dispute
over even the smallest of property.
Most experts attribute the growing stress to low morale, bad service conditions, lack of adequate
home leave, unattractive pay and a communication gap with superiors.

The rapidly changing socio-economic environment has resulted in our society becoming more
materialistic. This has led to an erosion or dilution of ethics and moral values and over ambitiousness
of the youth to move up the professional and economic ladder at supersonic speed. Until a couple
of decades ago, it was assumed that young men and women joining the armed forces would have
absorbed an understanding of the core values and standards of behaviour from their family or from
within their community. Ironically, such a presumption cannot be made anymore.

The army has introduced several soft measures like yoga lessons and a liberal leave policy to reduce
instances of suicides and fratricides. The army has also tried and weeds out potential soldier recruits
with personality disorders.

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5. "The echo of words written on social media is greater than spoken in public and therefore
needs greater regulation". In light of the above statement examine the need and feasibility
of such regulations. Does India need a separate social media policy?

Hints: OR
Social media has become a major influence especially on the minds of young people and has captured
their imagination. Its reach has increased tremendously touching the lives of millions of people at
one go.
SC
It no doubt, helps in connecting the people and has revolutionized the communication but it has
also led to a lot of downfalls. It is being used in radicalization of youth by ISIS. The recent riots in
Bangalore due to a fake viral video on internet of North East region, its role in Muzzafarnagar riots
etc, show the powerful and draconian face of social media. It can be used to invoke extreme
sentiments among vulnerable people and twisted to suit a particular line of thought.

It needs to be regulated because of the following reasons :-


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Anonymity of the uploader makes it conducive to be used by wrong forces for their benefit

Whether a report or video is true or not, it cant be said. But people usually tend to take all
the content online to be true which results in wrong consequences.

The speed with which a content is circulated is also very high. E.g., the content of hate
speeches instigating caste violence is very common.

It endangers the security of the nation as a whole.

However, owing to the large data transmitted over internet; the speed with which it circulates; the
absence of sources of internet in India; the global nature of internet and social media makes it very
difficult to manage.

Supreme Court while quashing the article 66A, also asked government to come up with a new law,
as there is a need for some mechanism to put checks and balances on online media.

Due to the above mentioned reasons, the Government of India has decided to come up with a
National Social Media Policy to encounter the cyber security threat. which will do a round the clock
monitoring of social media to remove the anti-social and provoking content.
Hints: Internal Security [109]
6. India's large coastline has been used for organized crimes like terrorism, drug trafficking
and human trafficking which highlighted the major gaps of security institutions and process
followed. Discuss major factor which need to be taken care for securing India's coastline
from external threats. How State governments can support the efforts of Central agencies?
Hints:
India is blessed with a large coastline of around 7500 kms long. It has a large economic, strategic,
political, cultural and geographic significance. But of late, it is also being used for terrorism (as in
26/11 attacks), drug trafficking (through Kutch), piracy, armed robbery and human trafficking
instances. The open nature of seas makes them vulnerable to these organized crimes.
The major factors which need to be taken care for securing Indias coastline from external threats
are:-
Geographical Features:- The varied nature of Indian coastline makes it difficult to be managed.
We have to take care of geographical features and particular locations which aid these
crimes and include them in our policy. For e.g.:-Sunder bans is a paradise for smugglers due

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to high mangrove growth.
Location:- Whether the coast is adjoining a forest or a millennia city also changes the

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security apparatus. The 26/11 perpetrators entered Mumbai from sea.
Biodiversity:- The chances of good catch in Andaman and Nicobar islands make the poaching
viable. Teak from Sunderbans area also increases the vulnerability of adjoining coast.
The problem of illegal immigration of people from sea is common as the security apparatus
is lax there. E.g.,- from Bangladesh.
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The fishermen issue- fishermen can also stray to other waters beyond maritime boundary
raising the national security concerns.
After the 26/11 attacks in Mumbai in 2008, several measures were announced by the government
to strengthen coastal and maritime security along the entire coast.
Due to the coordinated efforts of all concerned, all these measures are now in place and
overall maritime security is much stronger than before. The Indian Navy has been the lead
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agency in this regard and is assisted in this task by the Indian Coast Guard, Marine Police
and other Central and state agencies.
At the apex level the National Committee for Strengthening Maritime and Coastal Security
(NCSMCS), headed by the Cabinet Secretary, coordinates all matters related to Maritime
and Coastal Security.
Joint Operations Centres (JOCs), set up by the Navy as command and control hubs for
coastal security at Mumbai, Visakhapatnam, Kochi and Port Blair are fully operational.
These JOCs are manned 247 jointly by the Indian Navy, Indian Coast Guard and Marine
Police.
Coastal patrolling by Navy, Coast Guard and marine police has increased sharply over the
last few years. At any given time, the entire west coast is under continuous surveillance by
ships and aircraft of Navy and Coast Guard. As a result, potential threats have been detected
and actions have been taken to mitigate them in good time.
Interagency coordination, between nearly 15 national and state agencies has improved
dramatically, only due to regular exercises conducted by the Navy in all the coastal states.
Nationwide, over 100 such exercises have been conducted till date since 2008, and this has
strengthened coastal security markedly.
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In addition to continuous patrolling by Navy and Coast Guard, modern technical measures
have also been implemented for coastal surveillance, by way of a chain of 74 Automatic
Identification System (AIS) receivers, for gapless cover along the entire coast. This is
complemented by a chain of overlapping 46 coastal radars in the coastal areas of our
mainland and Islands. A second phase of coastal radars is also being implemented to plug
the small gaps in some places.
States have a lot of role to play in this. They can join the Central government by giving local assistance
in terms of police, technology, and insider information about some illegal activity that is going on.
The police can be trained in maritime security which would give an additional support to Navy etc.
The security of the nation is the duty of all is it state, central or local government. It is by their active
cooperation that we can secure our borders.
7. What is the importance of Special Forces in military operations? Write a short note on
contribution of Special Forces of India.

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Hints:
Special Forces have a number of different roles and are essential for modern day combat. Its

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not like the early 1900s, when wars were settled by large number of soldiers fighting in a
battle field. In modern day combat highly specialized elite units are needed for multitude
tasks-assassination, sabotage, intelligence gathering, reconnaissance, hostage rescue, etc.
For example, the Green Berets of USA help in force multiplication; they can go into enemy territory
and destroy an enemy from the inside. The SAS and Spetsnaz Alfa are highly renowned counter
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terrorist units. Special Forces are deployed everywhere in the world for special missions and
particularly for urban and guerrilla warfare.
Functions-
a) Intelligence collection, special reconnaissance
b) Subversion and sabotage of vital enemy infrastructure and communications through
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deep penetration and surgical strikes behind enemy lines


c) Covert and overt/direct action special operations as part of the Army's counter-terrorist
and counter-insurgency operations
d) Hostage rescue operations within and beyond their territory
Contribution of Indian Special Forces
a) 1971 Indo-Pakistan War- Parachute Brigade carried out India's first airborne assault
operation to capture Poongli Bridge in Mymensingh District near Dhaka. Subsequently
they were the first unit to enter Dhaka.
b) Operation Bluestar 1984- The Para forces commandos carried out the operation bluestar.
c) Sri Lanka 1987- Para forces were instrumental in IPKF, which failed due to poor
planning and political misjudgment.
d) Operation Cactus 1988, Maldives- Indian para commandos rescued the Maldivian
President when Maldives was captured by the PLOTE mercenaries. This was also the
first ever international intervention by the Indian army without any loss of life and
enhanced their reputation multifold.
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e) Kashmiri hostage-taking, 1995- The 1995 kidnapping of western tourists in Kashmir
was an act of kidnapping of six foreign tourists by Al-Faran, an organisation of Kashmiri
freedom fighters, now known as Harkat-ul-Mujahideen. It was a totally successful
operation; all hostages were rescued & resulted in the death of Abdul Hamid Turki,
whom the army identified as the leader of Al-Faran, and four other Al-Faran members.
f) 1999 Kargil War- Kargil war for India was primarily won by special forces commandos.
g) Operation Khukri 2000, Sierra Leone- Operation Khukri was a rescue mission
conducted in Sierra Leone, June 2000. About 90 commandos airlifted from Delhi to
spearhead the mission to rescue 223 men of the Gorkha Rifles who were surrounded
and held captive by the Revolutionary United Front rebels for over 75 days, just 90
special force commandos forced 2000-5000 members of the Revolutionary United Front
divided into 5 battalions to surrender that ultimately led to the liberation of Freetown.
Recent Missions
a) Operation Summer Storm 2009

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b) Ongoing COIN Operations in J&K and Eastern States
c) Counter terrorist operation in Samba (2013)

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Other Events- Personnel from the Para have participated in international competitions like
the Airborne Africa and The Cambrian Patrol, which was aimed to test the endurance and
the combat efficiency and readiness of the Special Forces community. The commandos
gained worldwide recognition after winning the event thrice during 2001-2004 and have
won it continuously since 2013.
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8. The state of poor internal security situation is not because of India's unfavourable strategic
environment but also due to weak internal security mechanism, especially its criminal
justice system. In this context, suggest some concrete measures to streamline the criminal
justice system.
Hints:
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India's unfavourable strategic environment does not fully explain the state of poor internal
security situation. The reason also lies in the weak internal security mechanism, especially
the criminal justice system. The principal objective of a criminal justice system is to give a
maximum sense of security to the people. However, India's criminal justice system is not in
a good shape and is, in fact, under immense strain. There are problems in all the three
components - law enforcement, adjudication and correction - and desperately call for reforms.
Law Enforcement- Indeed, some of the Indian laws have become old, archaic and out-
dated. Yet, for the most part, India's laws and regulations are satisfactory, but it is the
enforcement of these laws that is challenging. What India requires is, as the Padmanabhaiah
Committee advocated, a 'highly motivated, professionally-skilled, infrastructurally self-
sufficient and sophisticatedly trained police force'. There has to be conscious and serious
effort to strengthen the overall professionalism and capacity of the police. Due attention is
required for proper training, development of advanced forensic skills and facilities, and
separation within the police of responsibility for conducting investigations from the day to
day responsibilities for maintaining law and order.
Adjudication- The main problem in this component of criminal justice system is huge backlog
of cases due to resource and manpower constraints. By mid-2012 there were 61,876 cases
pending in the Supreme Court. Due to this, there were enormous delays in the adjudication,
increase in litigation costs, loss or diminished reliability of evidence by the time of trial and
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unevenness and inconsistency in the verdicts. Consequently, large numbers of under-trials
languish in jails while awaiting trial. In many cases, the detention under trial even exceed
beyond the maximum periods to which they could be sentenced if convicted. Justice delayed
is of course justice denied. Such incapability of the judiciary in delivering justice on time has
the danger of reduction of faith in the justice system among the people; low conviction rate
has created a perception that crime is 'low-risk, high-profit business'.
It is important to increase the number of judges. Simultaneously, a number of judicial and
legal bottlenecks must be removed to improve India's enforcement regime. In addition to
electronic filing systems, India's courts need more judges, higher filing costs (to discourage
frivolous litigation), improved tracking of cases, more alternative options for dispute resolution,
pre-litigation measures and plea bargaining. Specialised courts should be set up to replace
civil courts in the appeals process.
Correctional System- Indian jails are overcrowded. As on 31 December 2011, the total capacity
of jails in the country is 332,782 as against 372,926 jail inmates. The occupancy rate at all-India
level works out to 112.1 percent. The main aim of 'correction' strategy is to induce positive
change in the attitude of criminals. The emphasis is on the basic trust in the ability of the

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criminal to rehabilitate himself and proceed towards a re-adaptation of his behaviour.
9. The average citizen is the worst-hit as fake bank-notes have become so deeply embedded

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in the Indian economy that even bank branches and ATMs are disbursing counterfeit currency.
One estimate puts it at 10-20 per cent of the total currency notes in circulation in India.
Enumerate the adverse effects of fake currency circulation on the Indian economy. What are
the major sources of fake currency circulation in India and ways to curb it?
Hints:
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Given that fake currency is deeply entrenched into the economy, customers are the
unsuspecting guinea pigs who not only have to bear a loss when they have been tendered
a fake currency note, but also have to face cases that some banks are lodging for "handling"
fake currency.
Apart from security, fake currency poses huge socio-economic problem. Its impact on general
crime on society is serious as more and more educated unemployed youth are attracted
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towards the counterfeit racket. In short, this can be dubbed as a dangerous facet of 'economic
terrorism' confronted by India.
Fake Indian currency notes principally originate from Pakistan, but smuggled through various
routes, using different modalities. Directly, smugglers make best use of train services and
commercial trucks that run between Pakistan and India to push counterfeits into India. The
most popular indirect routes are via UAE, Nepal and Bangladesh. Fake notes from Dubai
are transported through air with the help of bona-fide passengers or couriers appointed for
the purpose. Thailand, Malaysia, Myanmar and Sri Lanka are also used as transit points.
International airports in Bangalore, Chennai, Calicut, Cochin, Hyderabad, Mangalore, Mumbai
and New Delhi are identified as main landing points of counterfeits from abroad. Porous
and weak land borders respectively with Nepal and Bangladesh are utilised by organised
gangs to smuggle fake currency into India. It is also carried by infiltrators from Pakistan.
Making use of weak maritime security, counterfeits have also been routed through sea.
Pumping fake currencies is one of the sub-conventional warfare strategies pursued by Pakistan
against India. The objectives behind are to subvert Indian economy and to fund terror
networks. According to a Planning Commission Report, "the fake currency enables the
adversary to obtain the services of individuals and groups in this country to act against our
security interests at very low cost to itself. Once such conduits are established, they are used
to push in drugs, explosives, weapons and trained terrorists".
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Government has taken several steps to curb black money. RBI in particular has advocated
printing polymer currency to curb the flow of counterfeit money. Similarly, it has also taken
the pre-2005 currency notes out of circulation to remove a large chunk out of circulation.
Further, it can issue a directive to banks and institutions dealing with large amount of cash,
making it compulsory to use the fake currency detector machine. This would go a long way
in arresting the problem.
10. Communal violence has been a major concern for the internal security of India. Give reasons
for the same and suggest effective measures to check it.
Hints:
In a well-established political system and a developed economy, conflicts between the various
group identities are kept under check as in due course they get assimilated into the national
identity.
But that has not happened in India as yet, where the wounds of the partition and the
colonial rule have still not fully healed. Moreover, the dependence on the government by a

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large section of our people for their very survival sharpens these conflicts among them.
The democratic institutions and the state structures are still not strong enough to fully

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harmonise these conflicts in a peaceful manner. Violence erupts when conflicting interests
cannot be consensually reconciled.
The hostile external forces, taking advantage of this situation through subversive propaganda,
further accentuate these conflicts. They give material and ideological support to aggravate
this sense of grievance to such an extent that a small minority are willing to become tools
in their hands to subvert the stability and security of the country.
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Measures to Check Communal Violence


Firstly, Peace Committees can be set up in which individuals belonging to different religious
communities can work together to spread goodwill and fellow-feeling and remove feelings
of fear and hatred in the riot-affected areas. This will be effective not only in dif-fusing
communal tensions but also in preventing riots from breaking out.
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Whenever strong and secular administrators have used or threatened the use of strong steps,
riots either did not occur or were of short duration. For example, strong police and army
intervention prevented repetition of riots in Calcutta in November 1984 and in Mumbai in
January 1994. When the anti-social elements and religious fanatics and people with vested
interests realise that the government is impartial and the police is serious in putting down
communal violence with all the force at its command, they immediately cease spreading
communal frenzy. This also calls for non-communalizing law-enforcement agencies.
Experience of riots in parts of India shows that communalized officials invariably make the
communal situation worse.
Thirdly, the role of media is immensely heightened during the course of communal violence.
The fear and hatred can be checked if the press, radio and TV report events in a way
conducive to soothing the frayed nerves of people instead of inflaming the temper further.
The media can contradict rumors in a sober manner. A careful restraint has to be exercised
in reporting the number of persons of different religious communities killed or injured.
Lastly, the government in power has to treat the extremist communal outfits as its immediate
targets and cripple their capacity to disrupt law and order. The secessionists in Kashmir, the
militants in Punjab, the ISS (now banned) in Kerala and other extremist organisations of
Hindu, Muslim and Sikh communalism have to be dealt strongly with by the state through
its law and order machinery.
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11. There are multiple interconnected underlying causes responsible for the ethnic flare-up in
the North-East of India? Enumerate the major causes and suggest measures how to improve
the security scenario in the region.

Hints:

Presence of large number of diversified tribes, which were not integrated and rather were allowed
to develop in isolation through schedule 5 and 6 provisions. This, not only affected their integration,
but also made them more conservative and xenophobic over time.

Large scale Migration of Muslims and other communities from Myanmar or Bangladesh, etc,
has generated adverse reaction from local people, particularly in Assam. As Bodo community
of Assam claim Muslim migrants from Bangladesh changes demography in Assam and
encroach upon scarce resources.

AFSPA which was passed in 1958 as a short term measure to maintain peace in Disturbed
Areas like NE but it is still going in NE region and one of reasons for insecurity in the region.

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Lack of development and employment opportunities also played a major role in development
of such tendencies, as unemployed and unsatisfied youth are easy targets and baits for

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hardliner ideology. Economic development is considered the best antidote for ethnic and
communal tensions in backward regions.

Suggested Measures

Connectivity through the Northeastern states became a priority for India's foreign policy in
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2003, providing a new dimension to the Look East Policy (LEP). However, it is illogical to
talk about extending the linkages with Southeast Asia if there are no potential markets on
the Indian side of the border.

Thus, economic development of NE is need of the hour to reduce the frequency of youth
engaging in insurgency activities. So Make in North East and BPO scheme for North East
are some necessary initiatives
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The Government shall ensure negotiation with separatist or ethnic organizations like ULFA,
NSCN or Mizo and must try to bring them to the mainstream by addressing their genuine
concerns.

Its high time government should upgrade the infrastructure in the region as people's movement
is one of best way to integrate them. It would also develop the economic and tourism
potential of the state. While the railway connectivity will take a longer period to accomplish,
as an immediate task the air-routes can be used as a medium for promoting tourism and
trade in the region. Present government at center has accelerated this process and has
announced 13 new Greenfield airports to be opened in next 5 years in the region.

Further extending the inland water transportation and active use of the sea ports, India is
already improving its diplomatic relations with Bangladesh in a big way. Better access to the
Chittagong port will lead to an economic resurgence of the region. This will not only help
Bangladesh to access Indian markets transit facilities for goods but will provide India a way
forward to Southeast Asia. Similarly, this opportunity can also be used to dismantle terror
infrastructure across the border in Myanmar and Bangladesh.

Hints: Internal Security [115]


12. What is the link between state and non state players in pervading terrorism? Give some
examples how India has been vulnerable in recent times due to collaboration between these
two forces?

Hints:
Non State players mainly include Terrorist organizations like ISIS or LeT and separatist
organization like ULFA or Naxalites etc. While almost all the countries have presence of
various rebel or secessionist groups. They become a major nuisance, when hostile states use
them strategically to raise a proxy war against the host state.
In context of India, the links between State players like China or Pakistan and non state
players help to pervade terrorism because Non state players get the following from the state
players.
o Easy financial support from these state players.
o Space to hide for long time in these countries.

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o Modern technological arms and specialized training for running of these arms like ISIS
is first supported by USA against Assad but now prove harmful to themselves.

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Easily move or cross borders to enter into other state territory.
India has faced many such instances, when such non-state players collaborated with the
states or received support from them in order to launch offensives in India:
o The khalistan movement in 1980's received support from ISI and Pakistani government
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in forms of money and arms.


o The 26/11 attack on Mumbai was collaboration between non-state players and state of
Pakistan.
o Indian Maoists are alleged to receive support from Chinese state and their Nepalese
counterparts.
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o Indian separatists in Kashmir have open support of Pakistan state and even the last
NSA level talks were cancelled, because of Pakistani insistence to meet such leaders
despite denial by India.
13. Elucidate what are the components of border infrastructure. Critically evaluate the state of
border infrastructure in India.
Hints:
Infrastructural development in the border region could impact in both positive and negative ways.
On the positive side, it could strengthen regional connectivity, thereby boosting economic linkages
at a sub-regional level, which may or may not impact the overall political relations between the
countries. The benefits that can accrue to the border regions from trade cannot be overlooked.
On the negative side, infrastructural upgradation could raise suspicions, up the ante and accentuate
the possibility of a conflict along the border, as has been the case with India and China and India
and Pakistan. This has lead to slow development of border infrastructure in India.
Some of the major components of Border infrastructure are:
Roads: Major functions include, connecting remote border areas with mainstream highways
or cities for easy connectivity at time of war and quick deployment of soldiers
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Railway: Railways provide even faster movement of arms and personnel and can also move
tanks and other artillery at much faster pace without destroying roads.

Landing strips and air force bases: Currently air force is the fastest mode of transport for
elite and special units; similarly, their role becomes very important in rescue and relief after
the battles and confrontation.

Integrated Check Post: It includes check post of army, custom facility or other services.
Good facilities with proper scanning and checks improves the speed of movement across the
border and boost trades, currently India lacks proper facilities and crossing border takes
days not hours for commercial vehicles carrying goods.

Fencing and observation posts: These are there both to slow down the infiltrators and trace
their movement apart from keeping track of enemy's movement.

Fuelling centers: In Kargil war, major impediments faced by Indian air force was that
fuelling centers were too far and they couldn't stay in operation for long. Thus, it is important

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to have refueling centers very close to areas of operation and also to ensure their safety from
falling into enemy's hands.

Border Infrastructure in India

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While Indian border infrastructure along its Pakistan border is satisfactory and wired, its
infrastructure along its china border lacks hugely and poses a serious threat in event of a
confrontation.
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As Parliament's Standing Committee on Defence, 2013-2014, noted in a recent report, India's
air, road and rail network near its border with China is in a "very dismal" state. Of the 73
all-weather roads that were identified for construction in 2006, just 18 have been completed
so far.

Of the 27 roads that were to be constructed by the Indo-Tibetan Border Police, just one is
complete, the report pointed out, adding that "as many as eleven roads are behind schedule"
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with even their detailed project reports not yet finalized. As for construction of 14 strategic
railway lines that were to be laid near the border, these have registered "nil achievement

The list of pending critical projects is striking. Pending lines in the eastern and northern
sectors include the Murkongselek-Pasighat-Tezu-Parasuramkund-Rupai line (256 km), the
Misamari-Tawang line (378 km), and the North Lakhimpur-Along-Silapathar line (248 km)
in the northeast; and the Pathankot-Leh line (400 km), the Jammu-Akhnoor-Poonch line
(223 km), and the Srinagar-Kargil-Leh line (430 km) in the northern sector. These would
cover a distance of 3,016 km and cost around $9.2 billion.

So even as India is implementing some of the pending acquisition issues by clearing them on a
priority basis and thus strengthening India's security along the Sino-Indian border, the infrastructure
problems could hinder India's efforts.

A radical new approach is now being adopted to accelerate projects to unclog these bottlenecks,
along with work on hundreds of other strategic projects, as the current government sharpens focus
on creating infrastructure along India's borders. From the Bharat Mala project (it envisages a road
network along India's land boundary, stretching from Gujarat to Mizoram) to Sagar Mala (under
which a coastal infrastructure will be set up along the nation's vast shoreline), the government's
intention is clear: bring about a road and infra construction boom to help drive trade.
Hints: Internal Security [117]
14. What are various roles performed by the security forces during peace-time in India. How
do such activities help them in maintaining battle readiness?

Hints:
An army's primary duty is not just to fight wars, but also to act as a deterrent. No country will
dream of attacking someone with a strong army and retaliation power. Similarly, they also perform
various roles during peacetime, such as:
Border Infrastructure Development is one of the major works of security forces in peace
time. In forward areas, the army's job (in collaboration with other paramilitary forces) is to
ensure, bunkers and roads and airstrips are built and built properly. Similarly, building Civic
Amenities in adjoining border and rural areas is new emerging field where security forces
are engaging in peace time.
Anti-insurgency: The army has a perpetual presence at borders to stop militants and other
anti-national elements from sneaking into the country.

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Participation in Peace-Keeping operations of the UN: India has assisted the United Nations
in peace-keeping operations in various countries. It regularly sends a lot of soldiers to the
UN. Recent missions include South Sudan.
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Research and Development: The army uses peace time to ensure it can use its resources in
hand to maximum effect, by experimenting. In the sense, whether a platoon should carry
1 machine gun or 4; whether Infantry and Armor should be used together, etc.
Intelligence Gathering: Army collects trans-border intelligence and share & coordinates
with intelligence agencies to maintain internal security.
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Disaster Management and relief work: The Army is regularly involved on relief work in
times of disasters like floods, earthquakes, tsunamis etc. This was seen recently in Uttarakhand
where the Army saved a large number of civilians and was instrumental in bringing the area
to normalcy.
Sports and Games: many sports and games are organised between the various regiments of
army. A lot of them make it to national teams and have held the head of this country high
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in many events like Olympics, commonwealth Games etc.


They indulge in Mock drills related to terrorism, conflict, war or disasters and Joint
exerciseswith international security forces.
While most of such activities apart from necessary training keeps Indian army battle ready, some of
these particularly develop certain special abilities:
Working closely with infrastructure development helps them to understand the weakness
and strengths of the terrain and feasibility of operations.
The mock drills help security forces to resolve difficult issues at time of conflict and terrorist
attacks.
They get local support at time of war in activities like food, care of wounded soldiers
etc.
Disaster management and relief regularly test their logistical abilities, which is key to their
battle preparedness.
Research and development activities along with training improve their operational efficiency
and develop teamwork.
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15. 'Indian Police is not only incompetent, but also highly backward in terms of its arms
operation and technical abilities.' Elucidate the need for immediate police reforms in the
light of above statement.
Hints:
Indian police suffers from various drawbacks, while they are not only incompetent for 20th century.
Some of major issues are attitude, competency, structure:
Attitude:
The relation between the police and the public has reached a point where the citizens rather
avoid reporting a crime to the police. In a survey done by Transparency International India
in 2005, 87% of the respondent to the survey agreed with that there was corruption in the
police force, 74% felt that the quality of service they received was inadequate and 47% felt
compelled to pay a bribe for their FIR to get filed.
Insensitivity towards public, especially dealing with vulnerable section like Women, Children,
Old age or disabled etc.

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Communal, Ethnic and caste conflicts are increasing in India and Police need to be prepared
for all these issues rather than always dependent on armed forces.
Competency:

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Terrorism is now no more limited to Intelligence agencies and armed forces but Police shall
be sufficiently prepared for terrorism. But the experience has proved otherwise, even in 26/
11 case, the police was at forefront, but suffered heavy casualties including senior officers,
as it couldn't plan a counter insurgency move properly.
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Cyber Crime in India is increasing at a much faster rate than traditional one, so Police need
to be trained for Cyber security issues.
Investigation of Crime and other policing issues like Traffic can't be handled by same police,
so separating them is the need of hour.
Police is ill trained in technology which causes various delays in investigation. Also
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modernization of police records is also required for speedy delivery of justice like online FIR,
online status etc.
Structural
Almost 90 % of police force is in constable range and there is no motivation to work due
to harsh working conditions, poor salaries and no scope for promotion as constable can max
reach up to Head constable or ASI level.
No proper grievance redressal and accountability mechanism for large number of complaints
against Police especially for corruption and poor behavior.
Frequent transfers of police officers of SHO or above level.
To ensure the necessary independence of the police from unwarranted political interference
it is suggested that a collegium be set up to appoint a few key officers. Simultaneously, there
is a need to constitute an independent oversight body that will have jurisdiction over complaints
of obstruction of justice and abuse of authority by the police. At the local level this can be
ensured by a local police ombudsman.
Thus it is high time to bring in a new police system in India to ensure greater accountability,
efficiency and a citizen service minded approach.
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