SYNOPSIS: Insights Secure Q&A May 09, 2016
SYNOPSIS: Insights Secure Q&A May 09, 2016
This is a new feature. As feedback from our side on your answers is missing, we thought of providing detailed synopsis of important Secure questions on daily basis so that you could revise our synopsis and compare it with your answers. We intend to post synopsis of Secure questions every next day of posting questions on website.
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General Studies – 1;
Topic: Poverty and developmental issues
1) New data released by IMF and other agencies in recent weeks shows that inequality in India is of Latin American rather than East Asian proportions. In the light of these data, discuss the nature of inequality in India. (200 Words)
The International Monetary Fund (IMF) has put out new data that shows how the two most successful Asian economies after 1990—China and India—have seen inequality rise in tandem with economic growth. This is in sharp contrast to what happened in countries such as South Korea or Taiwan in earlier decades
IMF estimates that the Gini coefficient for India has gone up from 45 in 1990 to 51 in 2013. China has done even worse. Its Gini coefficient has climbed from 33 to 53 in the same period.
Nature of inequality in India:
- There are several possible explanations for growing income inequality
- from the nature of technological progress to the lack of opportunities due to the caste system
- to ineffective government spending programmes and
- lack of infrastructure that connects people in the interiors to markets.
- Inequality in the ownership of assets
- Laws of inheritance
- Cost of professional training
- Tax evasion
- Corruption and smuggling
- Greater Burden of indirect taxation or regressive tax structure.
- There is a need for greater job creation in the modern sectors of the economy. This has been one of the few distinct failures amid the overall success of the economic reforms. The failure to create enough factory and office jobs has stymied the overdue shift of people from low productivity to high productivity work.
- There is difference in productivity growth between the urban and rural areas.
- There is the income gap within the cities between those who have been able to connect to the global economy and those who have not. One practical illustration of this is the millions of farmers who remain trapped in a stagnant agricultural sector.
- Countries of East Asia managed to evade this trap through labour-intensive industrialization that moved millions of poor people from farms to modern factories
- Global inequality has actually decreased since millions of Indians and Chinese began joining the global middle class from 1990 onwards. Lower global inequality is paradoxically a result of higher inequality in India and China.
- India has 55 billionaires for the $1.1 trillion it generates.Given the size of India’s economy, the number of billionaires it produced was extraordinary compared with emerging market peers such as Brazil, or with developed market peers such as Germany.
- Moreover, the fact that most billionaires gained wealth because of their access to natural resources such as land or government contracts raised disturbing questions about the nature of India’s growth process.
- Even if the rich earn a lot more than the poor, they are unlikely to spend all of their additional income. Thus, consumption-based inequality measures are expected to understate income inequality.
Topic: Critical changes to geographical features
Situation in India:
- India has almost 18 percent of global population but only 4 percent of fresh water resources.
- On per capita water availability basis, India falls in the category of “water stressed” nations, defined as those with less than 1700 cubic metre water per capita, per year.
- In 2011, its average water availability hovered around 1545 cubic metre, down from 1816 cubic metres in 2001.
- But at several places it is already less than even 1000 cubic metres, making them “water scarce.”
- In any case, the whole nation is expected to be “water scarce” by 2050
- Almost 78 percent of India’s water is being used for irrigation.
- Overall irrigation potential can go up from 139.9 m ha today to 170 m ha, if India taps the potential of inter-linking of rivers.
- The widening gap between irrigation potential created (IPC) and potential utilised (IPU) is another problem.While overall IPC so far is around 113 m ha, only about 91 m ha has been utilised. This gives only 47 per cent irrigation cover to Gross cropped area.
- In groundwater, the problem is over-exploitation and falling water tables.
- More than 80 per cent of administrative units in Punjab, Haryana, Rajasthan and Delhi are overexploited, and water table is depleting by one feet each year.
- And one of the key factors behind this is the highly subsidised power supplied to rural areas.
- Installing meters to measure power consumption, and also canal waters, and then incentivising farmers to save their consumption by rewarding them with monetary value of say 75 per cent of the savings at a price equivalent to what it would cost to supply from fresh investments.
- To ration power and water supplies on per ha basis, and let farmers choose cropping patterns based on that allocation. If any farmer wants more of these beyond their rationed quantity, they will have to pay full cost pricing.
- To replace inefficient pump sets by more energy efficient ones at government cost. Estimates suggest that almost 30 per cent power can be saved.
- But to save water, we need to promote drip and sprinklers aggressively, especially for sugarcane and banana, saving 40-50 per cent water. So far less than 5 percent of India’s cropped area is under micro-irrigation, and potential is at least three to four times more.
- Similarly, flooding of rice fields needs to be replaced by SRI (System of Rice Intensification) technique, which can save about 30 per cent water.
- Stop protecting these water intensive crops. Currently import duty on sugar is 40 per cent and on rice 70-80 percent.
- In fact, India is a net exporter of “virtual water” as 1 kg of rice requires 3000 to 5000 litres of water and 1 kg of sugar about 2000 litres of water, and both are being exported
- So India has to change its trade policy like china did in 2001 by importing water intensive crops like Soy etc..
General Studies – 2
Topic: Important aspects of governance
Systemic challenges are:
Shortage of Manpower:
- The number of diplomats, despite the recent expansion and re-designation of some officials, remains not only the smallest among the G-20 countries but also the smallest among the BRICS.
- For instance, in Africa over two dozen Indian embassies remain headless for want of diplomats.
- Similarly at the United Nations, where India is seeking permanent membership of the coveted Security Council, the Indian mission is the smallest among the G-4 (Brazil, Germany, India and Japan) aspirants to the Council.
- Unless that is addressed both quantitatively and qualitatively, the government’s bold initiatives might come to naught
No inter agency process:
- The inter-agency process becomes vital for foreign policy effective implementation. However, inter-agency coordination in India is virtually non-existent, especially when compared to other countries that India is engaging with leading to foreign policy initiatives often getting bogged down in bureaucratic wrangles.
- The only foreign policy initiatives that have been implemented are those that are coordinated by the all-powerful prime minister’s office.
Tax base problems:
- As the world’s 10th largest economy, India is becoming a rich country. But it remains a poor state primarily on account of its extremely small tax base.
- This in turn affects India’s ability to have a more proactive foreign policy. Thus, while India merely negotiates, China (with a huge trade surplus) invests in countries of strategic importance.
No strategic vision in foreign policy:
- Presently, there are a series of catchy but vacuous foreign policy initiatives, such as Neighbourhood First, Act East, Think West and SAGAR. Sadly, these parts still do not add up to the sum of India’s foreign policy.
Deficiencies on Government’s side:
- Government alone is not well-equipped to evaluate the challenges and opportunities that the unfolding geopolitical landscape presents.
Lack of institutionalised process of policy planning and making:
- India’s foreign ministry also lacks an institutionalized process of policy planning and making.
- This was evidenced when Foreign Secretary, queried senior officers as to who does the thinking about overall foreign policy in the government and was met with embarrassed silence.
Ineffective engagement of state governments:
- The inability of centre to effectively engage key state governments as stakeholders in the foreign policy process can also scuttle bold initiatives.
- For instance the West Bengal government’s opposition to the Teesta River Agreement with Bangladesh left India’s previous prime minister embarrassed in talks with Dhaka.
- Making a war free scenario in the SAARC neighborhood, which would make India an attractive destination for foreign investment
- developing the ability to shape the rules in global institutions, which will have a direct bearing on the country’s economic well-being.
- India faces an economically rising China to the east, staking a claim on disputed territories in the Asia-Pacific region and spreading its influence to the littoral states of the Indian Ocean.
- To the west, the relationship with Pakistan continues to be fraught with difficulties with no solutions in sight in the near future
- Islamic terrorism remains a major threat to global security with long-established states – home to large number of Indians – fracturing across West Asia and Africa.
- The sum of the investments which India gained through foreign policy is still only a fraction of the one trillion dollars that India estimates it needs for infrastructure alone.
Despite systemic challenges government has done a brilliant work:
- the implementation and operationalization of some of the New Panchsheel in a more meaningful way to deepen and widen India’s foreign policy engagement.
- foreign trips and bilateral engagements so far has been to attract investment and technology by reviving stalled ties
- with strategically important countries, such as the United States and France
- energizing decades-old neglected relationships with Japan, Australia, Germany and Canada.
- robust engagement led to Japan and France promising to invest 35 billion dollars and 2 billion euros respectively and the U.S-India Business Council estimating 41 billion dollars investment in coming years.
- Encouraged the influential Indian diaspora in the developed world to perform two roles:
- first as ambassadors garnering support for India’s global rise in their host nations
- second, as a source for foreign direct investment as well as remittances, given that India is the world’s leading recipient of foreign remittances constituting about 3.7 per cent of its GDP.
- The new government has established a new division within the foreign ministry to increase engagement between the Centre and state governments. Senior foreign service officers have been asked to work closely with at least two states so as to ensure their engagement in the foreign policy process
- Along with resolving these systemic factors, India also needs to articulate a strategic vision for its foreign policy.
Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests
4) It is said that since independence, successive governments have appeased China only to be disappointed in turn by China’s policies towards India’s interests. Do you agree? Critically examine. (200 Words)
- India driven by post-colonial solidarity considerations, continued to court the china even when the Chinese military began eliminating India’s outer line of defence by invading the then independent Tibet. As Tibet pleaded for help against the aggression, India opposed even a UN General Assembly discussion.
- Panchsheel Agreement- Nehru surrendered India’s British-inherited extra-territorial rights in Tibet and recognized the “Tibet region of China” without any quid pro quo. Such was the courtship that he even rejected US and Soviet suggestions in the 1950s that India take China’s place in the UN Security Council.
- Nehru’s sustained appeasement resulted in China gobbling up Tibet, covertly encroaching on Indian territories and, eventually, invading India itself.
- Since the late 1980s, successive Indian governments have propitiated China. The government in 2000’s used the legal term “recognize” to accept what China deceptively calls the Tibet Autonomous Region as “part of the territory of the PRC”. This opened the way for China to claim Arunachal Pradesh as “South Tibet”, a term it coined only in 2006.
- The present Indian government concessions have ranged from removing China from India’s list of “countries of concern” to granting Chinese tourists e-visas on arrival. Indian policy has enabled Beijing to significantly ramp up its already large trade surplus with India. Racking up a whopping $60-billion annual surplus, China has heavily skewed the trade relationship against India, treating it as a raw-material appendage of its economy and a dumping ground for manufactured goods.
- In 2015-16, Chinese exports to India were almost seven times greater in value than imports.
- Make in India initiative will not succeed when China blithely undercuts Indian manufacturing to reap a fast-growing trade surplus
- Inviting China to be a major partner in India’s infrastructure expansion, were intended to encourage Beijing to be more cooperative.
- China has become more hardline on security issues, including the border. Moreover, it has not only shielded Pakistan-based terrorists like Masood Azhar from UN action, but also stepped up covert strategic assistance to Islamabad, including providing the launcher for Pakistan’s India-specific Shaheen-3 ballistic missile.
- Indian appeasement has also allowed China to narrow the focus of border disputes to what it claims. The spotlight thus is on China’s Tibet-linked claims to Indian territories, not on Tibet’s status. China will not settle the border issue because an unsettled frontier allows it to keep India under intense pressure.
- India lost face in China’s eyes when it issued a visa to the Germany-based World Uyghur Congress chief Dolkun Isa and then cancelled it, after Beijing strongly protested against the action
- water is the resource that has become the subject of tension—specifically Chinese dam construction on its side of the Brahmaputra River.
No,India and china have cooperated well in many issues like:
- Chinese statement- world is big enough for both India and China to grow.
- India talks with China over the land boundary issue and both the countries accept that they should be moving toward a boundary settlement.
- China and India both understand the need for connectivity. In this context, both countries seem to have made some progress on the Bangladesh, China, India, Myanmar (BCIM) Corridor, an important component of China’s One Belt, One Road project.
- India is seekingto reach out to Chinese provinces with whom it did not have links previously. Increasing ties between Indian states and Chinese provinces enriches and supports high-level diplomatic ties. Already, a number of Indian chief ministers have visited China.
- The association in BRICS, Asian infrastructure investment bank and new development bank help both the countries
- On Climate change issues both countries are striving for better deals for developing countries.
Topic: Issues relating to development and management of Social Sector/Services relating to Education, Human Resources.
5) Education has for long been the key to moving up the economic and social ladder. There can be no equality of opportunity without access to quality education. Have inequalities in educational access in India diminished in recent times? Examine. (200 Words)
No,the inequalities still persist :-
- Net attendance ratio drops(NAR) sharply when it comes to secondary school and becomes worse at the higher secondary level.
- Class Basis :-
- the difference between the richest fifth and the poorest fifth in enrolment widens sharply from the primary section to the secondary and higher educational levels.
- Only 6% of young people from the bottom fifth of the population attend educational levels above higher secondary in urban India, but that proportion is five times higher, at 31%, for young people from the richest fifth of the population.
- So the real middle class is also substantially disadvantaged when it comes to higher education.
- Rural Vs Urban :-
- The situation is substantially worse in rural India.
- The well-off kids have much better opportunities for higher education, essential for getting good jobs in the cities and, increasingly, abroad as well, while their poorer cousins are doomed to scratch out a precarious living in the informal sector.
- Gender :-
- Several states have wide gender differences in NAR at the secondary levels.
- For instance, NAR at the secondary level in Gujarat is 63% for boys and 43% for girls.
- Caste Basis :-
- The difference in enrolment at the primary levels is not much.
- But the difference between scheduled castes and tribes and other categories widens at higher levels of education.
- It is particularly large for urban girls belonging to scheduled tribes at the secondary and higher secondary levels
- Religion :-
- Among religious identities, enrolment of Muslims is lower compared to those of other religions at every level, both for males and females.
- In urban India, while enrolment for Muslim boys in primary schools is only marginally lower, the proportion at the higher educational levels is substantially lower.
- For urban Muslim girls, NAR is substantially lower than for those professing other faiths.
- Expenditure :-
- Average expenditure per student in the primary section in urban India for the top fifth of the population is more than eight times that for the kid from the poorest fifth of the population.
Yes, the inequalities diminished because of government efforts:
- RTE has been successful in curbing these inequalities to an extent
- Universal primary education has been a very successful initiative of India
- Mid day Meals scheme implemented effectively diminished the caste differences in schools.
- Public funding in higher education gives an opportunity to even the socio economic backward communities to get access to quality education
- The New Education Policy (NEP) Initiated at the beginning of 2015 is a bottom-up approach was formulated. A combination of an online portal supported by on-site focus discussions was implemented in an attempt to reach out to as many stakeholders as possible.
- The educational loans provided by the banks for studies abroad also enabled even the middle class familied to fulfil their dreams.
Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.
- Service providers:
- Any potential misrepresentation or wrong data accessed or offered by any of the service providers could potentially land them in jail and/or have significant fines imposed on them.
- Besides this, accessing of such services will become expensive, thus impacting end user cost and resulting in slower spread of digital services in India.
- Monitoring the digital space will also make government officials very powerful and in a position to demand bribes from unaware or ignorant violators. If implemented in its present form, the proposed Bill could have severe consequences of these service providers
- The proposed Bill does not cover Indian government agencies such as ISRO, which is also another reason for protests emanating from various stakeholders.
- The success of ‘Digital India’ lies in more service operators coming out with wider range of services and greater number of users accessing these services. If the proposed Bill acts as a deterrent to the spread of similar services, then it will end up as a case of the government meaning well but ending up shooting itself in the foot.
- The terminology of the draft is psychotically comprehensive. “Whoever depicts, disseminates, publishes or distributes any wrong or false topographic information of India” can be held to account. Apart from printers,publishers, media and filmmakers who depict maps in their productions, this would include private citizens posting on social media, and even children.
- If this proposal or draft is accepted or goes through and becomes a law, sourcing information from satellites and crowd-sourced data will become illegal. Google Maps gets its information through this medium.
- Several stakeholders, technology analysts and enthusiasts have voiced their concerns over the proposed Bill which they believe is draconian and open to misuse and selective interpretation by elements within the government. Some have even gone as far as claiming that this is License Raj 2.0.
- There can be no debate that the country’s territorial integrity needs to be maintained, physically and in the digital world, and therefore, a stringent law against violators seems imperative.
- Moreover, geospatial information easily available from services like Google Earth, Google Maps etc, has been reportedly used by terror groups against India. In the run up to the Mumbai terror attacks, Lashkar jihadis were reportedly shown images of vital locations in Mumbai.
- Wrong depiction of the map of India could land the violators in jail with a maximum term of seven years and fine upto Rs 100 crore. This measure has been envisaged by the government against the backdrop of instances where certain social networking sites showed Jammu and Kashmir and Arunachal Pradesh as part of Pakistan and China respectively
- The proposed law applies not just to primary data providers such as Google and Apple, but to down-the-line service providers like Cab aggregators such as Uber and Ola, restaurant aggregators and last-mile delivery services like Swiggy, or even real estate information service providers like MagicBricks, 99 Acres, etc, all of whom draw upon geospatial data and images to offer efficient services to their end user.This law will make them accountable.
- The government is proposing to set up a regulatory body that will comprise of digitally aware senior bureaucrats along with subject matter experts who will oversee the digital space for violations. Hopefully, this body will successfully fulfill its responsibility while ensuring a level-playing ground for all.
- It is hoped that the government will be able to mitigate all stakeholder concerns before putting it up for final passage in Parliament.
General Studies – 3
Topic: Indian economy – growth; Resource mobilization
7) “The “free market” has not benefited the customers—both the borrowers and the depositors—as much as it should have because of an extremely restrictive entry policy in the banking space. There is an inherent contradiction in the coexistence of a free market and a repressive banking system in India.” Elaborate the statement and examine if things are changing for the better. (200 Words)
Free market has not benefitted Indian customers,borrowers and the depositors especially in the light of repressive banking system because of the following reasons:-
- Monopoly of Some banks:
- Public sector banks still have 70% of the market share leading to very less competition and accountability. Also One of the core objectives of the banking system is the financial inclusion has been neglected because of this.
- Not many banks were formed since independence .This led to limited options for the customers and depositors.The entry of corporates into banking system has been looked from suspicion mostly which is reiterated by the tedious process they need to fulfill to form the bank. Till 2014, in 67 years since India’s Independence, we had got 13 new banks in three phases and all have not survived.
- The attitude of the banks to lend loans for the high profile people irrespective of their paying back capacity led to loss of trust in the banking system. This has also led to increase in non performing assets.
- No substantial loaning for the most needed sectors like infrastructure because of the conservative system of giving loans.
However RBI has embarked the task of changing this scenario in India.The recent measures show the intent of RBI:
- The scene has changed dramatically when it allowed white label ATM’s in India.Along with that in 2015 Bandhan Bank Ltd was launched, the first instance of a microfinance institution (MFI) converting itself into a bank. IDFC Bank Ltd followed later.
- Around that time, RBI gave conditional licences to 10 small finance and 11 payments banks
- RBI expressed its intention to allow wholesale banks and custodian banks to come up
- It released draft guidelines for ‘on-tap’ licensing of private sector universal banks which will have the following impact:
- ‘On-tap’ licensing will ensure that every ‘fit and proper’ candidate is allowed to float a bank. it will revolutionize the financial system in Asia’s third largest economy.
- As competition intensifies, the informal cartelization of banks to deny benefits of free savings rate will break and loan rates too will come down.
- India’s government-owned banks, which account for about 70% of assets, will lose their market share.A pile of bad loans, lack of capital and inefficient board and top management in some cases, among other things, will shrink business opportunities for them. Which is why both the government as well as the banking regulator have been pushing for consolidation among public sector banks.
- Finally, it is now clear that India is moving into a bank-led financial system. Eight of the 10 licences for small finance banks were given to MFIs. Barring a couple, all large MFIs will transform into banks.
- Relatively small MFIs and NBFCs will continue in different niches but, overall, the banks will dominate the financial system and the regulatory arbitrage between banks and non-banks will end
What needs to be done?
- The idea of allowing individuals and professionals with 10 years of banking experience to promote banks and keeping large business houses out of it .RBI can allow non-resident Indians and firms controlled by foreigners float banks with necessary check points as they can bring in capital, skill, technology, modern products and processes and innovations.
- Wiser with giving 35 banking licences in the past two-and-a-half decades banking regulator can take the onus on itself to pick the right candidates instead of forming a committee everytime it thinks about the licensing process.
- Implementing unified payment interface.
- Measures to enhance financial inclusion need to be strengthened then only India can reap the benefits of free market.
General Studies – 4
Topic:Ethics in human actions; Dimension of ethics;