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Approach Answer: General Studies Mains Mock
Test 763 (2016)
Answer all the questions in NOT MORE THAN 200 WORDS each. Content of the
answers is more important than
12.5 X 20
its length. All questions carry equal marks.
= 250
1.

The most important challenge in managing the public sector in India is

balancing its accountability with autonomy. Discuss with relevant
examples.

Approach:
Discuss the dilemma between accountability and autonomy.
Explain the mechanisms that exist for maintaining a balance between the two.
Discuss their limitation and suggest a way forward.
Answer:
PSEs in India were conditioned to work in a protective environment till 1991 when
they were required to change with process of liberalisation. In this context, issues of
accountability and autonomy have been relevant as to how much autonomy should
be given to PSEs, how accountability should be ensured and how appropriate
balance between the two can be achieved.
Since, the country is still dependent on PSEs for expediting and facilitating inclusive
development and social agenda, the state needs to have some control over their
functioning. For this accountability mechanisms like PSEs to operate under
concerned ministry, government officials on board of company,
CAG audit, review of accounts by parliamentary committees, vigilance by
CVC and transparency mechanism like RTI exist.
However, this has led to political interference, populism, vote bank
compulsions, corruption and nepotism creeping into decisions of PSEs. In effect,
their autonomy is curbed, making them non-competitive, underperforming and
looking at government for funds.
Public Sector Banks (PSBs) are an example, where governments nationalisation
of banks with socialist aims was undone by malaises of political interference.
Gradually government had to reduce its control and increase autonomy of banks
which is still going on. The decision of Government to set up a Bank Board Bureau
(BBB) to replace the Appointments Board for appointment of whole-time
directors and Non-Executive Chairman of PSBs is a step to enhance autonomy of
PSBs. A New Framework of Key Performance Indicators has also been kept in
place to evaluate the Performance of PSBs and bring in the much needed
accountability in PSBs.
Similarly, major changes have been made in the Defence Procurement Procedure
and the Defence Production Policy to provide greater autonomy to the Defence
Public Sector Undertakings (DPSUs) for their expansion and diversification. A
case in point is the uniform Joint Venture guidelines (earlier there were separate JV
guidelines for DPSUs) to provide a level playing field between DPSUs and the private

sector.
With experience, mechanisms have been devised to achieve a balance between dual
objectives:

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 Memorandum of Understanding (MoU): It envisaged granting of operational

autonomy to PSEs and, in return, making boards and managers accountable
through a contract system aimed at improving performance. It has brought
greater fiscal discipline, made PSEs competitive, political interference has come
down and lessened control of ministries and established greater co-ordination
with PSEs.
Scheme of Maharatna, Navratna, and Miniratna: Extends much greater
autonomy to management and flexibility in areas like mergers, acquisitions and
recruitment based on categorization. In return, PSEs need to perform.
Ministries to keep their PSUs at arm's length: Officers and staff of ministry
are barred from using infrastructure/facilities of PSEs and administrative
ministries have to repatriate PSU staff with them. It provides greater autonomy to
PSEs by keeping administrative ministries at a professional distance.
Innovative measures such as performance related pay: The incentives for
the employees have been linked to individual, group as well as company
performance.
The government is also encouraging the listing of Public Sector Enterprises on
the stock markets as this would unlock the true value of a company, improve its
corporate governance standards and also help it in raising resources for funding
future expansion plans. As far as sick and loss making organizations are
concerned, the government has made efforts to restructure and revive them,
wherever this is possible.
However there are certain areas of concern which need to be
a PSE
addressed. For example in
board
50% of members are independent directors. There are two government nominee
directors. Independent
directors are de facto aligned to the ministry and together with government
nominee directors will
always be in majority on board, eventually facilitating interference in board
decisions. Besides,
government nominee directors are also joint/additional secretaries in the ministry
concerned. So boards
governments
eventually become extended arm of ministry. Clear
and
demarcation.com)of
boards/enterprises roles would improve system of disclosure and enhance risktaking ability.
While accountability mechanisms have been fairly addressed there is scope for
greater autonomy. Right
enablers would ensure PSEs to run on business principles and give them cutting
edge in present cutthroat competition.

2.

Most rural poor are excluded from the ambit of the formal
financial system,

which raises
their

Purushottam(purush027@gmail

dependence on informal sources as well as exposure to financial distress.

In this context, explain why
formal sector lending, especially to farmers, is so limited. Also suggest
some steps that need to be
taken to increase access to formal credit in rural areas.
for Suvankar

Approach:

Answer:

Introduce the statement by writing about ineffectiveness of formal financial

system in rural areas.
Discuss the limitation of the governments financial initiatives in rural areas.
List the relevant remedies.

document

personalised

The ratio of agricultural credit to agricultural GDP has increased from 10 per cent in
1999-2000 to around
This

38 per cent by 2012-13. However, the share of long-term credit in agriculture or

investment credit has declined (55 % in 2006-07 to 39% in 2011-12). Moreover the
following trends depict the issues with formal credit in rural sector:
Inequity in credit disbursedthe share of loans above Rs.10 lakh is going up
and over a quarter of the credit is advanced from urban and metropolitan
branches of banks. These loans mostly cater to input dealers, agri-businesses
such as food and agro-processing industries and warehousing
companies.
Steady share of informal sector in loans to agricultural households (around
40% between 2003 and
2013).

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 The declining share of small loans (less than 2 lakh).

March Phenomenon-banks lent over 46% of agricultural credit between January
and March perhaps to meet year-end targets although farm loans are most
likely required before the crop season begins, around June and November.
Reasons for limited formal nature of credit to farmers
Banks reluctance to lend to small farmers which is further accentuated by
inherent risks (say, deficit or unseasonal rains) associated with farming.
Partly, the decline could also be due to rising costs of cultivation,
inflationary pressures, and more people moving out of farming
A large share of credit has channelized through non-bank financial
intermediaries without collateral; in contrast to commercial banks, which
requires collateral. But they charged higher rate of interest and resorted to
coercive practices (example: microfinance crisis in Andhra Pradesh. The credit
disbursed by MFIs has not resulted in raising agricultural productivity because
these loans require regular monthly repayments and regular meeting and
oversight on borrowers)
A part of credit under priority lending and interest subvention scheme
being diverted to agribusiness, input dealers etc.
High cost of disbursing loans in rural areas and mandated interest rates being
too low under various schemes.
Rural branches have declined to 37% of total branches from 54% in 1994.
Steps required to be taken
Priority Sector Lending Certificate (PSLCs): it will provide a market-driven
incom)entive for
efficiency, will .

Creating Big-sized banks: which unlike smaller

ones,havetheability to cross-subsidize their stakeholders. Former RBI deputy governor K.C. Chakrabarty
Purushottam(purush027@gmail

has highlighted the importance of big

enable banks to sell their surplus lending and thus earning a premium for their
efficiency/geographical spread. RBI has already issued instructions on trading in
Priority Sector Lending Certificates in April this year.
Popularising Negotiable Warehouse Receipts (NWRs): The small and
marginal farmers with Kisan Credit Cards (KCCs) can also avail the benefit of
interest subvention scheme extended for a further period of up to six months
(post-harvest) against Negotiable Warehouse Receipts (NWRs) at the
same rate as available to crop loan to discourage distress sale of corps by small
farmers.

banks in improving allocation efficiency between rural and urban areas.

The government may consider removing the subvention restrictions on
interest rates. Then banks
would be free to set interest at rates that Suvankarcover their costs and it would
make loans viable.

The bank may channel credit through non-bank intermediaries such as MFIs and allow the MFIs to

for

charge rate of interest above the rate charged by banks.

There should be provisioning for delivering institutional credit to poor
farmers without collateral. It
may lead to increased credit availability to rural poor.
personalised

Banking correspondentsisneed to be appointed and adequately incentivized

with commissions linked
to loan repayments.
There is also a need to incentivize the financial institutions to provide farmers
with credit.
This document

3.

Efforts should be made to support Indian businesses to invest abroad as

several direct and indirect benefits accrue to the home country from
outward foreign direct investment. Comment.

Approach:

 Elaborate the statement and enumerate the reasons for promoting domestic
businesses to invest abroad.
List the recent steps taken by the government in this regard.

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Answer:
Outbound investments from India have undergone a considerable change not only in
terms of magnitude but also in terms of geographical spread and sectoral composition.
While in the first half, overseas investments were directed to resource rich countries
such as Australia, UAE, and Sudan, in the latter half, OID was channeled into
countries providing higher tax benefits such as Mauritius, Singapore,
British Virgin Islands, and the Netherlands.

Indian firms invest in foreign shores primarily through Mergers and Acquisition
(M&A) transactions. With rising M&A activity, companies will get direct access to
newer and more extensive markets, and better technologies, which would enable
them to increase their customer base and achieve a global reach. India has emerged
as one of the strongest performers in the deal-street across the world in mergers
and acquisitions.
Other benefits from such outward foreign direct investment include:

A wholly-owned subsidiary in a foreign country is able to transfer the technical

know-how, which is not possible in Joint venture due to stringent patent laws.
Formation of International clout- for example in a recent development, UK
announced that India has become the third largest source of FDI for them.
Potential to create a complementary interaction between domestic multinationals
and domestic firms. It can result into multiplier effect on investment,
employment, balance of payments,
technology and subsequent economic growth in home country. For example, if
the outward FDI
complements domestic investments then an increase in domestic
multinationalscom) activities abroad . may promote higher domestic output.
On the other hand, indirectly the domestic multinationals gathers knowledge,
which is not only limited to the domestic multinationals but it can leak out and
become common knowledge in the home market. But this transmission can be
both directly or indirectly. The Direct transmission can occur through vertical
integration, where the demand for intermediate inputs from home country
suppliers may increase abroad. And the Indirect transmission can
occur through:
o Imitating the domestic multinationals thus bringing managerial
home
strategies to
market
and enable home country firm to
learn.
Purushottam(purush027@gmail
o The skilled employees of domestic multinationals can transfer their skills to
future home country employers.
o The home country competitors of domestic multinationals may be forced to
become more efficient if multinational activities in a foreign country lead to
enhanced productivity.Suvankar
for

Recent efforts to support outward personalised for ign direct investment

Reserve Bank of India, encouraged by adequate forex reserves, has relaxed the
norms for domestic companies investing abroad by doing away with the ceiling
for raising funds through pledge of shares, domestic and overseas assets.
The Union Cabinet has approved a proposal to provide US$ 150 million credit
from Export Import Bank of India (EXIM Bank) for the development of Chabahar
Port in Iran, which will also help India to facilitate the growing trade and
investment with Iran and other countries in the region.
The RBI has also allowed limited liability partnership (LLP) firms to undertake
financial commitment to/ on behalf of JV or wholly owned subsidiaries of Indian
companies abroad.
India and South Africa are considering prospect of setting up a joint venture
(JV) for mining and owning coal blocks in South Africa.
Ministry of External Affairs has initiated a move to set up a direct sea and air
link between India and the Latin American region, as Indian corporates plan
significant investments in the mining, oil, IT and pharmaceutical sectors in that

region.
Overseas investment is one of the foremost steps to enter the global marketplace
and in recent times, India has taken necessary steps to make its presence felt in the
global arena.

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4.

Monetary policy transmission in India has largely remained ineffective.

What are the reasons behind this? Explain what marginal cost-based
lending rate (MCLR) is and how it can affect monetary policy transmission
in India.

Approach:
List out the major reasons behind poor monetary policy transmission.
Define the marginal cost-based lending rate and how it affects monetary policy
transmission.
Answer:
Generally, the effect of a policy rate change would be passed on to a large share of
the population. But in India, when the RBI changes the policy rate, the impact is felt
by only a small fraction of the population and it has not led to any major changes in
interest rates charged by the banks.
The changes in policy rate would affect the entire economy through banking
system, bond market and exchange rate system. But in India, none of these
channels are working effectively in monetary policy transmission.

First, Indian economy is dominated by public sector banks and the private
banks and foreign banks face lot of entry barriers. Therefore, the small number of
banks thwarts competition among the existing banking system, which does not
feel the necessity to pass on the policy rate changes to the

Second, in India we do not have fully developed bond market, as it is in

advancedcom) economies. In the absence of large and liquid bond market, the
burden of monetary policy.transmission falls on the banking system.

Third, in an open economy with flexible exchange rate and monetary independence, the
policy rate changes have impact on capital flows and exchange rate. But in India, the
capital market is burdened with several restrictions; therefore the change in policy
rate does not necessarily result in

final consumers.

government bonds. Similarly, banks cash

reservePurushottam(purush027@gmailratio(CRR),orthedeposits that commercial banks are

required to keep with RBI (on which they do not earn any interest), can also be cut.

concomitant changes in capital flows.

High CRR and SLR-Cutting down on statutory liquidity ratio (SLR) currently
pegged at 21.5% will
theoretically allow banks to use more money to give loans to borrowers instead
of investing in
The marginal cost-based lending rate (MCLR) Suvankar refers to an internal
benchmark rate for the bank below
which bank cannot lend, except in some cases for allowed by the RBI. It describes the

method by which the

minimum interest rate for loans is determined by a bank - on the basis of marginal
cost or the additional
cost. This new methodology replaces the base rate system. Under the base rate
system, the repo rate is
not included to determine the personalised base interest rate; however, under
the marginal cost-based lending rate
system, it is mandatory for banks to consider the repo rate while
calculating the marginal cost-based
lending rate. This improves the transmission of policy rates into the lending rates of banks.

is

Other benefits of MCLR document include:

 Brings transparency in the methodology followed by banks for determining

interest rates on advances.
Ensures availability of bank credit at interest rates which are fair to borrowers as
well as banks.
Enable banks to become more competitive and enhance their long run value and
contribution to economic growth. This
However, certain loans like fixed rate loans of tenor above three years, special loan
schemes formulated by Government of India, Advances to banks depositors against
their own deposits, Advances to banks own employees etc. are not linked to MCLR.

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5.

India's most pressing labour market challenge going forward is to

generate a large number of formal sector jobs. In this context, discuss the
constraints on formalisation of workforce. Also highlight how these
constraints can be overcome.

Approach:
First of all give a brief account of employment growth in formal sector and
condition of workers.
Then bring out the constraints on formalization of workforce despite formal sector
growing gradually.
Finally bring out measures to remove these constraints on formalization of
workforce.
Answer:
Between 1989 and 2010, informal firms accounts for most employment growth. Of
the 10.5 million new manufacturing jobs created between 1989 and 2010, only 3.7
million i.e. about 35% were in formal sector. The informal sector can be credited
with creating jobs and keeping unemployment low, but by most measures informal
sector jobs are much worse than formal sector ones. Wages are 20 times higher in
formal sector. Also formal sector jobs score better on some non-pecuniary grounds
like gaining access to cheaper formal credit etc.
Challenge of creating good jobs in India could be seen as the challenges of creating
more formal sector jobs. Some of the constraints on formalization of work
force can be identified as Dismissal norms under the Industrial Dispute Act (wherein dismissal of
even a single workman is
considered an Industrial dispute) and the cumbersome nature of compliancecom)
with labour . regulations are acting as a significant barrier to growth for
medium-sized formal sector
manufacturing firms.
Numerous regulations also encourage rent-seeking behaviour as higher rents
predict lower growth in formal sector employment and higher future growth in
informal sector employment.
The slow pace of labour reforms has encouraged firms to resort to strategies
like hiring contract workers which is giving them benefits like subcontracting
regulations and managing inspectors to the contract labour firm and it enables
firms to stay small enough to be exempted from some labour
law.
Purushottam(purush027@gmail

The way forward in overcoming these constraints can be-

Suvankar

Centre and States need to amend their labour laws to attract large employers
and high growth industries. For example recently Rajasthan has amended its
labour law.
Relocation of labour intensive industries to second and third tier towns and
cities. This model of moving factories to workers will lead to development of
those areas and will reduce spatial mismatch in the labour market and can
improve competitiveness by raising firms access to lower cost labour.
Government could ensure that labour regulation is worker-centric, by expanding
workers choice and relaxing taxes on formal sector.
Low earners should be given choice of whether to contribute to the EPF or not. It
could reduce the cost of hiring workers in the formal sector and incentivize more
people into formalization.
Aggregation by technological platforms (provided by aggregators such as
Amazon, Flipkart, Uber, Ola, etc.) is in some ways leading to formalisation of the
economy.
Indian Cabinet has recently approved International Labour Organization (ILO)
Recommendation concerning transition from the informal to the formal

economy this year. The Recommendation provides guidance to Member States to

facilitate the transition of workers and economic units from the informal to the
formal economy.

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6.

What are the objectives of public debt management in India? Examine the
rationale for setting up an independent agency to manage government
debt. Also highlight the issues that need to be addressed to ensure
successful debt management by an agency other than the RBI.

Approach:
Introduction should briefly define the concept of public debt management.
Further, delineate the objectives of public debt management in India.
Next part of the answer should examine the reasons for setting up of an
independent agency to manage government debt.
Finally, bring out issues that need to be addressed for success of independent
authority for debt management.
Answer:
Public debt management is the process of establishing and executing a strategy for
managing the government's debt in order to raise the required amount of funding,
achieve its risk and cost objectives. Policy paper of the Ministry of Finance in 2010
stated that the overall objective of the Central
Governments debt management policy is to:
meet Governments financing needs at the lowest possible long term
borrowing costs and to keep the total debt within sustainable levels.
support development of a well-functioning and vibrant domestic bond market. .com)
Recently Government has planned to relieve RBI of Public Debt Management role
and is planning to
bring in Public Debt Management Agency (PDMA) in two years time. The rationale
behind such a move can be understood as following:
Bringing together all government borrowings under one roof is propagated as a
key reason for the creation of an independent PDMA. At present, the RBI is
responsible for all internal debt management functions, while external debt falls
under he purview of the Department of Economic Affairs under the Ministry of
Finance (MoF).
A separate agency, which assigns specific responsibilities and is accountable on
its own, will lead to a more transparent and efficient system. This is seen as a
necessary step towards deepening of the bond market.
It would resolve the conflict of interest that arises when the RBI manages the
governments debt, as it leads to a conflict of interest with its role as monetary
authority working to contain inflation and ensure financial stability.
Seperation of debt management will allow the central bank to focus on monetary
policy of setting short terms interest rates. It would relieve the RBI of the burden
of contending with twin incentives
pulling in opposite directions in scenarios such as when rising inflation demands
an increase in policy rates but the government wants takers for its debt offered
at lower rate.Purushottam(purush027@gmail
Countries like US and document UK have an independent debt management office.
Though it is aThiswelcome move, there are certain challenges that need to be
addressed to ensure successful debt management by an agency other than RBI A full fledge PDMA will require amendments to the RBI Act, and that might delay
the procedure.
Fears of market volatility caused by the shifting of responsibility to a new agency
needs to be addressed.
Government debt although largely domestically held, is one of the highest
among the Emerging Markets and with nominal growth rate not keeping pace
with nominal interest rates, debt-GDP ratio will rise.
With new investments conspicuous by their absence and the export outlook
unexciting, the government understandably wants to lend recovery a helping

hand. But if higher public spending is

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not accompanied by higher revenues, fiscal and primary deficits will increase,
stoking government debt.
Chance of demand supply mismatch in government bond and higher
government borrowing may crowd out private investment. Hence, the challenge
of remaining independent and coordinating with RBI needs to be resolved for the
success of the new agency.

7.

Explaining the rationale behind ceiling on agricultural land holdings,

discuss whether land ceiling has stifled agricultural growth in India.

Approach:
In the introduction explain land ceiling and the logic behind its implementation.
While giving points both in favour and against the positive relation between land
ceiling and agricultural growth.
Conclude by logically favouring one of the two.
Answer:
Land ceiling refers to fixing the maximum size of a land holding that an individual or
a family can own.
The surplus land may then be appropriated and distributed according to the law. By
the end of 1961, as
per the directions from the centre, most of the states passed their land ceiling acts.
Rationale behind ceiling on agricultural land
.com)
holdings:

Largely the rationale behind ceiling on agricultural land holdings aligned with the
objectives in the provisions of the Directive Principles of State Policy delineated
in Articles 38 and 39 (c) of the constitution.
To reduce the exploitation of the landless tenant
farmers. To reduce concentration of wealth in
the hands of a few.
To promote of social justice by reducing the inequality in power and fostering
cooperation among
the people.
The impact of land ceiling on agricultural productivity has engendered a debate that can be understood

Purushottam(purush027@gmail

through following arguments:

Suvankar
Arguements in Favour:
o Before ceiling, large areas belonging to big farmers remained uncultivated.
Ceiling brought more area under cultivation.
o
Ownership of land led small farmers to take more interest in increasing
production.
o Studies testify that because of involvement of the entire family, small farms
yielded more production per hectare.
o Overall, agricultural output has increased manifold over the years.
Arguements Against:
o Because of land ceiling, enterprising farmers were unable to enlarge their
holding by buying or leasing lands of small farmers. This way, large economic
holdings with high agricultural
o Small farms hinder mechanised farming thus hampering
productivity. o Small farmers have limited capital to
improve production.
o Because of small land holding size, the input costs are high, causing
agriculture to be non-remunerative and productivity to be low.
o
Very little of the surplus land was distributed, and hence a most of it
remained uncultivated.
At the outset land ceiling was an important, and necessary, measure for equitable

growth in the country. Over the years the size of an economic agricultural holding
decreased due to scientific advancements. It is evident that Indian farmers have
produced record crop year after year. Thus, it cannot be argued that land ceiling has
had an adverse impact on the agricultural productivity in India.

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8.

Augmenting the employment potential is linked with the need for

increasing Indias share in world exports. What are the objectives of the
Foreign Trade Policy (2015-20)? How does it seek to achieve these
objectives in the coming years?

Approach:
Briefly discuss the significance of promoting exports.
Mention the objective of the objective.
Mention the features of the scheme to achieve the objectives.
Answer:
India is adding about 12 million workers to labour pool every year. Hence, it needs to
accelerate growth in all sectors of the economy to create more employment. Since,
catering to Indian market is not sufficient to sustain growth we need to strengthen
exports. The new five year Foreign Trade Policy, 2015-20 provides a framework for
increasing exports of goods and services as well as generation of employment and
increasing value addition in the country, in keeping with the Make in India vision.
The objectives of the policy is to make India a key player in global trade by :

Increasing exports to $900 billion by 2019-20, from $466

billion in 2013-14
Raising India's share in world exports from 2% to 3.5%, while integrating foreign
trade with Make in
India and Digital India schemes.

To achieve these objectives it adopts following measures:

.com)

Merchandise Exports from India Scheme (MEIS): Five existing schemes to

promote merchandize exports have been merged into one.
Service Exports from India Scheme (SEIS): To promote services export from
the country. The benefits of MEIS and SEIS have been extended to SEZs.
Status holders: SEZs, AEZs, exporters etc. are eligible for benefits such as selfdeclaration during custom clearances; exception from some documents and
other incentives like reducing their transaction costs.
Integration with Make in India: Government has reduced export obligation
for capital goods purchased from Indian suppliers under Export Promotion of
Capital Goods scheme. Exporters who export high level of domestic content get
higher level rewards.
Ease of doing business: Online filing of documents/ applications, online interministerial consultations and simplification of processes, digitisation and egovernance.
Agriculture, Defence, handloom and eco-friendly goods: Higher level of
incentives.
Unlike annual reviews of pa t, FTP will be reviewed after two-and-half years
to ensure continuity in policy.
Duty credit scrips would be made freely transferable and usable for payment of
customs duty, excise duty and service tax, and debits against scrips would be
eligible for CENVAT credit or drawback.
Export promoti n mission to take on board state governments.
Government will provide incentives to eCommerce companies exporting
products from sectors that create jobs.
Setting up of host of institutions, including Trade Council and National
Committee on Trade
Facilitation. Purushottam(purush027@gmail

FTP is a positive document that seeks to push export from country which will have a
domino effect on the all the sectors and generate employment in the country.

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9.

The advent of differentiated banking marks the beginning of a radical

overhaul of the banking structure that would address the abysmal levels
of financial inclusion in India. Elaborate. What are the possible issues that
could impede the functioning of these banks?

Approach:
In introduction provide a brief picture of financial inclusion in India.
Then bring out the concept of differentiated bank.
Subsequently, analyse how differentiated bank could address the abysmal levels
of financial inclusion in the country.
Finally, analyse the issues that could impede the functioning of these banks.
In conclusion suggest a way forward.
Answer:
In last two decades, the reach and scope of banking has increased, but the huge
demand for financial services remains unfulfilled. It is a matter of concern that even
with 150 domestic commercial and over 2,700 co-operative sector banks operating
in the country, just about 40 per cent of the adults have formal bank accounts.
Thus, even while the efforts to ensure financial Inclusion through the existing set of
banks continue, the concept of differentiated bank has been introduced.
Differentiated banks are distinct from universal banks as they function in a niche
segment. It could address the abysmal levels of financial inclusion in
following ways.com)

Commercial banks are largely interested in funding large and medium

corporations or giving out loans for home and vehicle purchases and have
neglected smaller segments. Differentiated banking models like payment bank
and small bank can fulfil the gaps.
Differentiated banks will allow customers to directly take deposits, which will
bring down their cost of funds and translate into lower interest rates for clients.
These banks may be in a better position to exploit the huge business opportunity
in funding small and medium enterprises.
Also the RBI expects them to be high technology -low cost operators, while also
will bring innovations
Purushottam(purush027@gmail
in service delivery.
Some issues which could impede functioning of these banksfor Suvankar

Many niche-banking models typically depend on inter-bank liquidity, and

wholesale funding which is a potential source of risk and vulnerability and
maintaining systematic stability and protecting the interest of depositors..
Full penetration of no-frills accounts may prove to be a constraint in their pursuit
of deposit accounts.
Differentiated banks will have to persuade a large number of potential customers
to either switch from commercial banks or open up a second account.
Beyond this, on the loan side of the business, as they seek to grow their lending
volumes, they will be in direct competition with the priority sector mandates of
commercial bankspersonalised
For these new categories to be given a fair chance of success there is a need for
some re-alignment of roles and responsibilities between different categories of
banks in relation to no-frills accounts and priority sector loans.

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10.

While explaining the reasons behind slump in revenue of Indian railways,

discuss whether the recently announced dynamic fare pricing can help
in addressing the problem.

Approach:
First give a brief picture of recent revenue generation of Indian Railways.
Then bring out some reasons for its decline.
Explaining in brief the concept of dynamic fare pricing, bring out the rationale
behind adopting, it.
Finally analyse if it will be able to pull up the revenue and increase fare-freight
ratio.
Answer:
In 2015-16, total Railway revenue undershot budget estimates by Rs. 16,752 crore
i.e. 9%. Also freight contributes about 66% of the total revenue, but earnings
reduced by 5% from the budget estimates.
Recently, Railways gross earnings declined 5% to Rs.64,387 crore in April-August,
2016 compared with the same period of the previous year.
Some reasons of decline:

In 2015-16, freight traffic decreased by 10%. Also, the decline in freight revenue
is due to an overall decline in what is called lead. Lead in railway parlance
means net ton/per km. The target for FY17 is 600 km which in itself is lower than
what the target was in FY 16 - 620 km.
Cross subsidizing the passengers on account of freight charges leading to ratio of
passenger fare to
freight fare of about 0.3
.com)

Roadways gaining freight market share owing to drop in diesel prices and increased infrastructure.

Passenger

tariff

being

next

ofPurushottam(purush027@gmailrevenueforrailways,dynamic

biggest
fare

pricing

source
were

(26%)

announced

for

Rajdhani, Shatabdi and Duronto trains as a means to shore up the lagging passenger

revenues. The flexible fare system means that only the first 10% of seats and berths
will come at the base fare, with 10 per cent increase for every batch of 10% sold.
The increase will be capped at 1.5 times the base fare. This structure is aimed at
addressing the fare versus freight distortions of the railways.
But, it seems that this step alone cannot solve the problems of railways.

Fare increases in the premium trains for some classes could result in airfares
being lower at certain times weaning away some train travellers.
Increase in the prices under the scheme begins much too early, when a bare 10
per cent of the seats are sold putting far too much pressure on passengers to
book early.

It will not be a popular measure to expand the list of train under the scheme.

Suvankar

Thus, apart from these, the overall personalisedstrategy of Railways for the upcoming
year can be based on new revenue sources, revision of isfreight policy and expansion
of railway freight basket.
11.

document

What is Google Street View? Discuss the grounds on which India has
refused to allow Google to launch its Street View service in the country. This

Approach:
Start the answer by bringing out the concept of Google Street View and some of
its uses.

 Then give a brief account of its introduction in India.

Finally bringing out the issues involved with it, analyse the reasons for refusal to
launch it in India.

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Answer:
Google Street View is a technology featured in Google Maps and Google Earth that
explores places around the world through 360-degree, panoramic and street level
3D imagery. Most photography is done by car, trekker, tricycle etc. It is available as
a component of Google Maps, as a web based application, and as a mobile
application for android and IOS.
After its launch in 2007, it has evolved as tool for smart navigation where in users
can navigate around panoramas. It is also used in environmental monitoring which
allowed cars to carry sensors to detect pollutants like Ozone, particulate matters
etc. It also allows businesses such as shops, caf, and other premises to include
their panoramic images into street view.
Also Google had launched Street View on an experimental basis in some of the
tourist sites like Taj Mahal, Red Fort, Qutub Minar, Varanasi river bank, Nalanda
University, Mysore Palace, Thanjavur temple, Chinnaswamy stadium besides others
in partnership with the Archaeological Society of India.
But, recently India has refused to allow Google to launch its Street View service.
Some of the reasons can be enumerated as:

The decision is said to have come in the backdrop of the terror attack on the
Pathankot airbase in January, with investigators suspecting that terrorists used
Google Maps amidst negative response from various defence organizations.
Delhi High Court asked the government to examine the issue of sensitive locations
such as defence
installations and nuclear power plants showing on Google Maps. It isnt clear if
these concerns have
. com)
been addressed.
Street View goes a step further than the maps. It displays panoramic views of
public spaces, thanks to images captured by Googles moving vehicles, adding a
layer of depth and reality to the maps.
Defence Ministry said it was not possible to monitor the service
once it is launched. USA, Japan and some European countries have
raised privacy issues.
But India has hinted that its refusal is not final and that such issues could be
resolved once the
Geospatial Bill, which seeks to regulate map-creation and sharing, comes into force.

Suvankar Purushottam(purush027@gmail

12.

Increasing use of Unmanned Aerial Vehicles (UAVS) pose unique policy

challenges that transcend conventional domains of national security,
privacy and business practices. Analyse in the context of the draft
guidelines that have been issued by the DGCA (Directorate General of Civil
Aviation). Also examine the significance of UAVs in achieving the goal of
inclusive development.
Approa
ch:
is

personalised

Discuss the various challenges posed by

UAVs.
Discuss the significance of UAVs in inclusive
development.
Answer
document
:
This

According to DGCA, Unmanned aircraft are either pilotless or do not carry pilot(s)
on board. Remotely
Piloted Aircraft (RPA), Autonomous Aircraft and Model Aircraft are various types of

unmanned aircraft.
Unique policy challenges
Redefining the airspace- ATC and the network of ground-based radars are
currently not equipped to track all kinds of drones, especially micro- and small
drones.
Physical and electronic identification of drones-The current aircraft numbering
system is inadequate to accommodate the vast variety of drones. Since drones are
increasingly becoming part of a

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networked environment, it is critical to give each drone a unique electronic code,

akin to an Internet protocol address, for quick, easy and clear identification.
Commonality of protocols and functions with existing manned civilian,
commercial and military regulations and protocols for aerial vehicles, especially
with regard to communication, collision avoidance processes and air corridor
sharing.
To standardize and improve the quality of the construction of dronescurrently there are practically no standards for the manufacture of small and
micro-drones, resulting in UAVs with an exceptionally high failure rate. The
unregulated Indian policy and legal environment for civilian drones has allowed
several local and foreign drone operators to sell UAVs of suspect quality.
Reconceptualization of current understanding regarding connectivity
and infrastructure- it includes policy challenge of establishing specifically
earmarked docking and recharging stations across the country for small and
micro-drones.
To support and evolve a domestic drone industry that understands specific
Indian challenges. Today, most of the drones are imported and then customized.
There is now a need for an integrated policy one that ties in with the
Manufacturing Plan of 2011 and the New Policy on Electronics 2012
Privacy concerns-challenge confronting Indian policymakers is to substantially
rework the Information Technology Act of 2000. The second challenge is to
redefine the existing legal framework with reference to what constitutes the
correct way of collecting evidence, especially its admissibility in a court of law.

The current guidelines issued by DGCA cover some challenges but needs to evolve
further to cater to all the issues and challenges. The guidelines broadly include:
Provision of a Unique Identification Number (UIN) to be issued
from DGCA

.com)

Provision for mandatory identification plate

Operator permit
Security provisions regarding sale and disposal
provision for maintenance, operation and insurance
It Is evident that the guidelines pertaining to the participation of foreign
operators should also be included as not doing so may eventually affect the Make
in India initiative, where foreign participation will be a necessity.
Purushottam(purush027@gmail

The DGCA regulations must provide for a level playing field for the private
sector so that innovation,
growth and more importantly adopting of UAV technologies by end users can
become commonplace.
The DGCA must initiate multi stakeholderSuvankarengagement process to develop a
framework for privacy,
for

accountability, and transparency issues concerning commercial and private UAV use in line with the

Indias policy of ease of doing

busine .

Significance of UAVs in achieving inclusive development

is personalised

UAVs offer following benefits which make them useful in development and rescue

activities and thus are

critical to inclusive development:

document

they can enter environments that are dangerous to human life

can stay in the air for long hours, performing a precise, repetitive raster scan of a region, even in

This

complete darkness, or, adverse environmental

conditions. perform a geological survey
perform visual or thermal imaging of a region
measure cell phone, radio, or, TV coverage over any terrain, etc.
Due to this, UAVs have found use in various domains:
damage assessment of property and life in areas affected with natural calamities
(e.g.2013 Uttarakhand floods where the terrain was inaccessible) ,

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 surveys for gathering developmental data;

Critical infrastructure monitoring including power facilities, ports, and pipelines;,
aerial mapping, etc.
This revolutionary potential of the drone is already being exploited by a few
social entrepreneurs to deliver medicines in remote places in Africa and
Latin America.
According to World economic Forum, some 800 million people around the world
have limited access to emergency services due to lack of connectivity. By
flying medium-size loads to many of these isolated communities, cargo UAVs can
save lives and create jobs.
UAVs, are now being used in India by civilian government agencies, public and
private sector entities, and lending institutions for the purposes of law and order,
planning, data gathering, monitoring. The potential of drones clearly has major
implications for an infrastructure-deficit country like India. The application of
microdrones is endless: From services ranging from provision of essential medicines
to remote healthcare centers, cost effective door-to-door delivery models for retail
chains and, obviously, surveillance.
UAV technologies have the potential to usher in efficiency into governance system
and are thus critical to inclusive development.

13.

What is Artificial Intelligence? Can it be a potential game changer in

improving governance? Examine the challenges that lie in its use.

Approach:

.com)

Artificial Intelligence (AI) is simulation of humanPurushottam(purush027@gmailintelligenceprocessesby machines, especially computers. The term is
applied when a machine mimics cognitive functions associated with human

First explain the concept of Artificial Intelligence.

Then analyse how it can be a potential game changer in improving

governance in the country. Then analyse the challenges that could impede
in realization of potential of AI in governance. In conclusion, try to provide
some solutions.
Answer:

minds, such as learning, problem solving and reasoning. Particular applications of AI

includes expert
systems, speech recognition and machine vision.
for Suvankar

AI can be a potential game changer in improving governance and service delivery

by making the system
automated. It could bridge governance deficit bypersonalised

Fast processing of data. For e.g. If there are 10 crore toilets to be built under
SBM, then 10 crore photographs need to be examined, which AI systems can do
within seconds.
AI can be used in determining the behaviour pattern of citizens as well criminals
from data feed on the line of predi tive algorithm as used by amazon etc. to
predict need of consumers at particular time.
Traditional governance structure is most broken in rural areas and folk dont
want to be placed there, here AI can fill up deficit.
AI has tremendous scope in traditional sectors like agriculture. For example, call
records data from Kisan call centre can be processed to detect if any distress
sign is being shown in any area.
Banking robot Laxmi has been introduced recently in country. Its services can be
used in disbursal and monitoring of AADHAAR cards.
Also, AI has tremendous scope in other areas too like determining demand of public

transport, saving and expenditure habits, improving literacy, controlling inflation,

grievance redressal etc.
However it has several challenges.

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 Lack of digital literacy and digital divide and expansion of AI in governance could
aggravate digital gap.
Apprehension that it may lead to loss of existing jobs.
AI is still long way from surpassing human intelligence.
It may induce apathy in governance and service delivery and fail to comprehend
diversity of problems faced by people needing instant customization.
Thus, despite having challenges, AI can be a tool towards capacity building and
efficiency of public service delivery. However, following steps need to be taken
beforehand:
Digital literacy with special focus on urban areas.

Upgrade of existing systems so they are better integrated with AI so that errors
and chaos doesnt occur later.
Should be initially used only in domains where processes are well defined and
have lesser human interface.
Bring all stakeholders on board like workers, civil society etc. before its induction.
Should be catalyst for local technology solutions and manufacturing rather than
imports.

14.

The government recently announced its plan to make India a 100% electric
vehicle nation by 2030.
What are the advantages of Electric Vehicles over internal combustion
engine (ICE) vehicles? Highlight
the challenges that the government needs to overcome to implement this
plan.
.com)

Approach:

First of all give a brief introduction about the government announcement

regarding electric vehicles.
Then bringing out differences between ICE and electric vehicles, analyse the
advantages of electric vehicles over internal combustion engine (ICE) vehicles.

Finally analyse the challenges that need to be overcome in implementation of this plan.

Purushottam(purush027@gmail

Answer:
The government is working on a scheme to provide electric cars on zero down payment
for which people can pay out of their savings on expensive fossil fuels, for becoming 100
per cent electric vehicle nation by
2030.
for Suvankar

Electric vehicles (EVs) are propelled by one or more electric motors powered by
rechargeable battery
packs where as Internal Combustion Engine (ICE) vehicles depend on the byproducts of petroleum
refining such as petrol and diesel for power.
is personalised
Benefits of electric vehicles over ICE vehicles

Energy efficient: The combustion engine loses 62.4% of fuel as heat and only
15% of the energy is used to move the vehicle whereas EV converts chemical
energy to electrical energy at a rate of 90% efficiency.
Low maintenance cost: Electric vehicles do not require oil changes or
replacement of their parts like air filters or spark plugs that need occasional
replacement for a petrol vehicle. Even the brakes on an EV last longer than an ICE
car.
Environment Friendly: EVs have no tailpipe and are zero emission vehicles.
Also, an EV reduces 35-60% less carbon dioxide emission from electricity than the

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CO2 pollution from the petrol of a conventional vehicle with an ICE..

No Noise Pollution: Electric engines make almost no noise whereas the noise
level inside a petrol vehicle can be as high as 75-80 decibels.
Reduce energy dependence: Electricity is a domestic energy source.

document

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Vision

Challenges to be overcome
High Cost: Lithium ion (Li-ion) batteries and complexity of electric motor adds to
the costs.
Low performance: EVs have low driving range which can be compensated by
adding battery packs. However, this adds to the weight and cost of the vehicle.
Recharging issues: Battery-electric cars take a long time to recharge, much
longer than filling up a conventional car's gas tank as well as lack of ubiquitous
charging stations.
Incompatibility with heavy duty vehicles
India lacks the capability of manufacturing key components like battery cells,
semi-conductor components, micro-processors, and controllers.
EVs offer some relief from consumption of fossil fuels but it has its own challenges.
But the use of ICE needs to be discouraged due to the detrimental effects on
environment and health of the masses.

15.

While the provisions of the Montreal Protocol have helped phase out CFCs,
the alternative to them have contributed to another problem. Comment.
How will the Kigali agreement help in addressing this problem?

Approach:
First of all give brief introduction about Montreal Protocol and its success till now.
Then analyse the problems created by phasing out of CFC under the protocol.
Focus should be on
.com)
problems created by alternatives of CFCs.
Finally giving a brief background of Kigali Agreement, analyse how it will help in
reducing the
problems created by the alternatives brought under
Montreal Protocol.
Answer:

The

Montreal

Protocol

was

landmark

agreement

signedPurushottam(purush027@gmailby197countriesin1987 to control the use of 96 ozone depleting

substances. These were mainly Chlorofluorocarbons (CFCs), used in refrigerators and

air-conditioners. Pursuant to this, the developed and developing countries phased

out the production and consumption of CFCs by 1996 and 2010 respectively.
However, the alternative to CFCs chosen was hydro chlorofluorocarbons (HCFCs).
Though they are less
Suvankar

harmful to ozone, they cause global warming. While the global warming potential (GWP) of HCFCs is less

for

than that of CFCs, it is a thousand times that of CO2.

Hydro fluorocarbons (HFCs) which poses no harm to ozone layer, were meant to
replace HCFCs, but their
drawback also lies in their GWP personalised as HFCs have a 100 year GWP range
between 124 and 14800 Carbon

Dioxide equivalent and atmospheric is

lifetimes in the range
In this background, document Kigali Agreement may help

following manner:

of 1.4 to 27 years.
in addressing the problem in the

It was aimed at amending the Montreal protocol in order to phase out HFCs as

they are 100-1000 times more potent than CO2 in terms of GWP. These are the
worlds fastest growing greenhouse gases and are growing at the rate of 10%
every year.
It will avoid global warming by up to 0.5 degree Celsius by the end of 2100.
The developed countries, led by the US and Europe, according to a CSE
statement, will reduce the HFC use by 85 per cent by 2036 over a 2011-13
baseline. China, which is the largest producer of HFC in the world, will reduce its
usage by 80 per cent by 2045 over the 2020-22 baseline and India will reduce
the use of HFC by 85 per cent over the 2024-26 baseline
The Kigali Amendment to the Montreal Protocol is legally binding where 197
countries are party to this. This

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Thus, Kigali Agreement is seen as one of the most concrete step in controlling GHG
emissions, but it needs more quickly and proactive adoption as agreement is
criticized as a slower one. Also funds and technology transfer to developing
countries should be prioritized and smoothened.

16.

Despite a wide range of problems and issues, India supports 57 per cent of
the world population of tigers. Enumerate the challenges in maintaining
the growth of tiger population in India. What are the salient features of
the strategy adopted by India over the years to support the tiger
population? Also highlight the measures required to further improve the
situation in this context.

Approach:
In introduction, give a brief picture of tiger census in India that is showing an
upward trend in tiger population in the recent years.
Then bring out the challenges in maintaining this growth.
Then analyse the strategy involved in tiger conservation in India and bring out
the features of this strategy.
Finally enumerate measures that could be adopted to improve the situation
further.
Answer:
India is home to 70 per cent of tigers in the world. In 2006, there were 1,411 tigers
which increased
to 1,706 in 2011 and 2,226 in 2014. According to the latest data, the count had
gone up to 70% of the
. com)
worlds population of tiger.
Challenges in maintaining the growth of tiger population
Protection against poaching with increased
fragmentation of habitat Securing inviolate space for
tiger to facilitate its social dynamics
Addressing tiger-human interface and restoration
of corridors Regular training of staffs, management
and monitoring issues
A dwindling prey base and over-used
habitat
Purushottam(purush027@gmail

Strategies Involved and its

features
Suvankar

The strategy for tiger conservation in India revolves around Project Tiger and the Wildlife (Protection)

for

Act, 1972 as well constitution of the NTCA as a statutory body. Currently, there are
50 tiger reserves in
the country which are constituted on a core/buffer area strategy. The protected area
network has been
strengthened gradually under the National Wildlife Action Plan.
personalised

The Project Tiger aims to exclusive tiger agenda in the core/critical tiger habitat,
fosteris
inclusive peoplewildlife agenda in the out r buffer and fostering the latter agenda in the corridors.

The Save Tiger campaigndocumentlaunched during the latter part of 2008 also
created mass awareness on the
plight of this magnificent beast and rallied efforts to save it.
This

Measures to improve conservation

 Coherence between land-use planning and conservation: Tiger

conservation basically demands stringent protection laws, vast landscapes and a
good prey base. These demands are in conflict with the countrys land-use
planning for development.
Source-and-sink population concept: A large forested landscape with good
functional connectivity can strengthen conservation under the source-and-sink
population concept.
Expansion of landscapes: Large protected areas make for robust wildlife
ecosystems and conserve large populations of prey base more effectively.

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 No to poaching: Among the tiger conservation practices, protection and

intelligence gathering should be accorded priority and made more professional.
Regular monitoring for any adverse ecological change in forest habitats, use of
new technologies in census and monitoring data and capacity building of staffs
through stringent protection and basic wild-life monitoring practices.
Realising the role of communities in tiger conservation projects.

17.

What are the reasons for indiscriminate sand mining from rivers in India?
Analyse its adverse effects on economy and ecology of the region. In
context of the 2015 guidelines released by the Ministry of Environment
and Forests, highlight the measures that can be adopted to curb the
practice of sand mining.

Approach:

First analyse the reasons for indiscriminate sand mining from rivers in India.
Then analyse its adverse effect on ecology and economy in brief.
Then bring out some provisions of guidelines 2015, released by MoEF.
Finally bring out measures that can be adopted to curb the proliferation of sand
mining

Answer:
In recent years the demand of sand has increased tremendously leading to
indiscriminate sand mining
from river beds across India. Some reasons can be
. com)
enumerated as:
Construction boom, demand from glass factories and astronomical profits
from illegal mining. Poor implementation of rules by states.
Practice of leasing of riverbed plots armed with too restrictive rules lead to
proliferation of sand mafia and nexus of local politicians and corrupt officers.
Current practice of short term leasing, provides little incentives for sustainable
management.
Adverse impacts of indiscriminate
sand mining
Purushottam(purush027@gmail

Ecological impact

Suvankar

It may change river bed gradient which may affect the riparian habitat including
the vegetative covers.
Sand on river bed act as filter and its mining may lead to infiltration of pollution
to ground water.
River bed mining along coastline may lead to intrusion of saline water thus
polluting ground water too.
Reduces water holding capacity, thus reducing ground water levels.
Biosecurity and pest risks.
Vehicle movement increased in the area leading to local environmental problems.

document

Economic impact This

It may affect the stability of hydraulic structure which may have huge economic
implications
It may affect local population as local riparian ecosystem get disturbed leading
to destruction of their livelihood.
It may also lead to increased flooding and river bed shifting thus imparting huge
loss to standing crops and populations.
Shrinking river bed has led to expansion of population near to streams which can
be catastrophic as seen in Uttarakhand floods.

 Proliferations of illegal sand mining causing huge lose to exchequer.

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To curb indiscriminate sand mining, Government in 2015, came up with new rules
under sustainable sand mining policy. Some key features of it Satellite imagery of sand deposit to locate rivers from which mining can be
carried out.
Provision of barcoded slip in place of current slip system to have robust web
based tracking of quantity of sand being mined.
Mining should be restricted to 3 meter depth and 3 meter or 10 percent of the
river width whichever less, away from the banks.
Demarcation of mining area with pillars and geo-referencing should be done prior
to start of mining.
But apart from the rules, some more measures like comprehensive policy on sand
mining and an independent regulatory authority, as well as making sand mining
more transparent business and empowering of local resident, finding alternate for
sand to be used in construction activities can go a long way in curbing
indiscriminate sand mining and attain sustainability.

18.

Indias commitment to Disaster Risk Reduction (DRR) is evident from the

fact that it became one of the first countries to align its National Disaster
Management Plan (NDMP) with the Sendai Framework.
What are the salient features of Indias first National Disaster
Management Plan (NDMP)? How can this plan help in effective disaster
management?

Approa
ch:

Briefly mention about the Sendai Framework.

Salient Features of National Disaster
Management Plan Identify the strengths and
weakness of the Plan

.com)

Answer:
NDMP is aims to make India disaster resilient and significantly reduce the loss of
lives and assets. The plan is based on four priority themes of Sendai Framework for
Disaster Risk Reduction 2015-30
namely:
Purushottam(purush027@gmail

Understanding disaster risk.

Improving disaster risk
governance.
Suvankar

for
preparedness.
Early warning and building back better in the aftermath of a disaster.
Salient Features of
NDMP
Investing in disaster risk reduction (through structural and non-structural measures) and disaster

is personalised

Vision of the Plan documentistoMake India disaster resilient, achieve substantial disaster
risk reduction, and significantly decrease the losses of life, livelihoods, and assets
economic, physical, social, cultural and
environmental by maximizing the ability to cope with disasters at all levels of

administration as well as among communities.This

It covers all phases of disaster management: prevention, mitigation, response
and recovery.
It provides for horizontal and vertical integration among all agencies and
departments of Government.
It also spells out roles and responsibilities of all levels of Government right up to

Panchayat and Urban Local Body level in a matrix format.

It has a regional approach, which will be beneficial not only for disaster
management but also for development planning.

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Evaluation of the Plan

NDMP provides a framework and
to government agencies for all phases of
disaster
direction
management cycle.
It is designed in such a way that it can be implemented in a scalable manner in all
phases of disaster
management.
It also identifies major activities such as early warning, information dissemination,
medical care, fuel,
transportation, search and rescue, evacuation, etc. to serve as a checklist for
agencies responding to
a disaster.
It also provides a generalized framework for recovery and offers flexibility to
assess a situation and
build back better.
To prepare communities to cope with disasters, it emphasizes on a greater need
for Information,
Education and Communication
activities.
Globally, the approach towards post-disaster restoration and rehabilitation has
shifted to one of
betterment reconstruction. NDMP provides a generalized framework for recovery
since it is not
possible to anticipate all possible alternatives of betterment reconstruction.
The Plan also highlights that disaster
reduction will be achieved by
risk
mainstreaming the
requirements into the developmental
plans.
It incorporates provisions for
disaster risk governance through six
strengthening
themes i.e.
integrated and mainstream disaster risk reduction, promoting participatory
approach, capacity
development, working with elected representatives, grievance redress
mechanism and promoting
quality standards, certification and awards for disaster risk management.
.com)

Recent instances have led many to not use plastic or electronic

19.
transactions, despite the convenience.
Discuss the issues associated with the rise of currency in circulation in the
economy in recent times.
Also, highlighting the advantages of a cashless economy, sugge t
measures required to bolster its
popular acceptability.
Approa
ch:
Purushottam(purush027@gmail

In introduction try to give brief picture of cashless transaction and about recent
data breach as well as some facts like ratio of cash.
to GDP, comparison to China and Brazil.
Then discuss issues related to the rise of currency in circulation in the economy.
Then highlighting the advantages of a cashless economy, bring out measures to
bolster its popular acceptability.
Answer:

is personalised

Ratio of cash to GDP in India is one of the highest in world i.e. 12. 42% in 2014,
compared to 9.47% of
China or 4% of Brazil. But, India is gradually moving towards cashless economy and

Government is
pushing for same. The document recent demonetization drive is a step in this direction
although its prime aim is to
curb black money. This

But still less than 5% of payment is electronic..

Recent data security breach compromising around 3.2 million debit cards across
India is a setback in pursuance of cashless economy, given that most Indians are in
villages and not tech savvy creating apprehensions regarding cashless transactions.
Apart from security apprehensions, lack of financial inclusion, overwhelming
majority of retailers and service providers belonging to informal sector etc. act as
barrier leading to increased cash circulation in economy which is creating many
issues:
Easy flow of black money and creation of parallel economy

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 Easy infusion of counterfeit currency and increased ease of conducting organized

crimes and terror financing.
Tax evasion becomes easier as it is difficult to track transactions
It facilitates growth of informal and unorganized sector.
It directly affects consumers behaviour leading to inflation.
Less money with banks leads to decrease in deposit rates and increase on loan
interest. This effects investment in business and infrastructure.
Negative effect on transmission of monetary policy.
Advantages of cashless economy
Strangulates grey economy, prevents money laundering, and increase tax
compliance.
Brings down the cost of printing, managing and moving money around.
Automatically solves the problems of cash out on long holidays, risk of carrying
currency notes etc.
Cash being material can be prevented from circulation but electronics channels
alleviate this friction.
In June, 2016, RBI brought out The Vision- 2018 for payment and settlement system
in India. Government has incentivised and rebated cashless transactions in Budget
2016. But still India has to go a long way.
Way forward
Aadhar based payment system will be a big boost for promoting cashless transaction
com)
culture.
Effective implementation of Jan Dhan and putting up of robust payments mechanism to settle digital

transactions.
Incentivizing consumers in terms of service tax waiver.
Robust regulation of banks as they would be more interested in more lucrative
payment business.
Making available payment points to small and medium retailers for free or at
discount, while
incentivizing them for accepting payment electronically.

20.

Whereas proliferation of traditional nuclear weapons has long been a

concern, the issue of dirty
Purushottam(purush027@gmail

bombs and orphan sources has also become important in recent years.
Explain what a dirty bomb is
and highlight the concerns linked with nuclear terrorism in India. In this
context, what are the issues
that need to be addressed to effectively ensure Suvankarthe security of
nuclear material in India outside the
already secured nuclear
installations?
for
Approa
ch:
personalised

Introduce with the recent Nuclear Security Summit held in 2016;

Define a dirty bomb
Enumerate the concerns and threats with respect to nuclear security in India
Highlight the issues that need to be addressed;
Conclude with initiatives that have been undertaken so as to minimize these threats

This

Answer:
In the wake of increasing threats from ISIS especially after Paris and Brussels
attacks, the Nuclear Security Summit held this year discussed nuclear threats
from global terrorism and resulting security priorities.

 A dirty bomb combines radioactive materials with explosives like RDX and Cobalt
60, Cesium 137.
This kind of bomb basically targets a persons environment and body through
contamination by radioactive explosions.

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Threats concerning nuclear security in India:

Internal capability: India has around 22 nuclear reactors, 122 nukes, nuclear
missiles such as Agni, radioactive waste from potential sites, institutions and
hospitals using nuclear materials.
External threats: Recently US issued an advisory to its citizens in India of the
perceived threat from ISIS to India. Already in the neighbouring countries of
Bangladesh ISIS has emerged as a serious threat. In addition to this, Pakistan and
China are nuclear capable nations which make the already fragile Indian borders
vulnerable. Further there is high risk of Pakistans nuclear arsenal falling into
hands of terror groups.
Security of institutions and personnel: Even though it is difficult to access
and transgress to access nuclear facilities like DRDO, BARC, DEA the defence
institutions are vulnerable and need more safeguards, especially minimizing any
potential sabotage from personnel within premises of these institutions, such as
recently seen in Brussels. Even though Indian nuclear establishments have a
Personnel Reliability Programme, sabotage and intentional damage to the
facilities cant be ruled out as seen in some cases previously such as drinking
water contamination at the Kaiga plant etc.
Additionally, technologies like dirty bomb can leave the population and area
paralysed with long term threats on environment, society and wider ramifications on
public health and sustainable development.

Issues that need to be addressed: In the wake of these threats therefore,

stronger personnel reliability programme in nuclear facilities, proper disposal of
nuclear waste, CISF training and capacity building, natural disasters such as that
seen in Fukushima in 2011 to minimize leakages from nuclear plants and even
sabotage from theft, cyber terror.
Initiatives undertaken: Design basis threat document, technologies like e com)Licensing
of
Radiation .
applications, institution of inter-ministerial counter nuclear smuggling team, in
addition to this, India
has also announced an assistance of $ 1 million to Nuclear Security fund thus
remaining committed
to Article 50 of maintaining international peace and cooperation toward world
peace.

Purushottam(purush027@gmail

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