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SECURE SYNOPSIS: 11 March 2017

 


SECURE SYNOPSIS: 11 March 2017


NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.

General Studies – 1;


Topic : Urbanisation  – problems and remedies

1) Analyse the important features of pattern of urbanisation in India between 1991 to 2011. (200 Words)

EPW

Introduction:-

By 2050 the half of population of India will be in urban areas. This process picked up speed from 1991

march11.1

URBAN AREA CRITERIA:-

In India a place is termed urban if it meets any of the following criteria:

(i) a minimum population of 5,000;

(ii) a maximum of 25% of the male working population employed in agriculture, the rest in non-agricultural activities; and

(iii) population density of at least 400 per km2. In addition, every place with a corporation, cantonment, municipality or notified town area is also termed urban.

march11.2

FEATURES OF URBANISATION BETWEEN 1991 TO 2011

  • POSITIVE SIGN OF DEVELOPMENT:- The 2011 population census states that 31.2% of India’s population is urban—up from 27.8% in 2001, and 25.7% in 1991. The accelerated rate of urbanisation in the last decade, compared to the 1990s when the growth rate of gross domestic product (GDP) rose to over 7% per annum, is widely applauded as a positive sign of development.
  • INDIA LAGGED BEHIND COMPARING OTHER COUNTRIES:- In 1981, India’s urbanisation rate ranked 91 out of 124, with only 33 countries having urbanisation rates lower than India’s (Pant and Mohan 1982). In 2011, India ranked 159 out of 195 countries (UN 2014), indicating that urbanisation in India has remained at almost the same level relative to other countries.
  • LOW RATE OF URBANISATION:- As a developing nation, India’s rate of urbanisation has been low and not very impressive compared to the rest of the world as well as other developing nations. In 2011, according to census data, only 31% of India’s population was urban, compared to 52% in China, 54% in Indonesia, 87% in Brazil, and 61% in South Africa.
  • EXCLUSIONARY URBANISATION:-Its observed that though the population in cities is increasing and many people migrating towards the cities a large chunk of people get excluded in the for of Slums and lower middle class people from the benefits of the cities.
  • Migration driven urbanization:- Migration is the key process underlying growth of urbanisation; and the process of urbanization is closely related with rural to urban migration of people. In most developing countries of the world where rate of urban growth is relatively higher the urban-ward migration is usually high. Rural to urban migration is by far the major component of urbanisation and is the chief mechanism by which urbanisation trends all the world-over has been accomplished
  • The distribution of total urban population across different size class intervals remained roughly the same and unequal over 1991–2011.The skewed distribution of urban population.

Conclusion:-

India needs to work on several areas to manage its urbanization. The following are perhaps the most important: Inclusive cities, urban governance, funding, planning, capacity building and low-income housing. India also needs to start a political process where the urban issues are debated with evolution of meaningful solutions.


Topic:  Salient features of Indian society

2) Do you think, the goal of creating a caste-less society in India which is written into the Constitution, is being realized in India? Critically analyse. (200 Words)

EPW

The Constitution of India, under Part III on Fundamental Rights, declares discrimination on the ground of caste unlawful (Articles 15 and 16), and abolishes untouchability (Article 17). Under Part IV on Directive Principles of State Policy, it provided for promotion of rights of the Scheduled Castes (SCs) and Scheduled Tribes (STs) (Article 46). These constitutional provisions raised hopes of progressing faster towards the goal of creating a caste-less society.

However, the extent up to which this goal has been achieved is subject to debate. Further there are different trends in urban and rural areas.

Role of URBANIZATION –

Cosmopolitan nature of our urban spaces, where not much consideration is given to the caste of a person. Decreasing caste consciousness due to nature of jobs -people compelled to work together , exposure to each other in educational institutions. Competitive environment discourages caste consciousness, but caste-identities still persist.

Caste does exist in the city and caste endogamy also practiced on a wide scale. In fact, the city is the centre of activities of caste associations, and provides leadership to the members of the horizontal unit spread in villages and towns all over the country.

There are localities, educational institutes in urban areas increasingly dominated by particular castes, further encouraging caste-consciousness among students and people.

RURAL AREAS –

The rural areas have witnessed little or no change at all as regards adopting a social living without caste-based stratification. Economic dependence of lower castes still compels them to follow caste hierarchies. Illiteracy, lack of awareness are some of the causes.

ELECTORAL POLITICS –

Electoral politics in India is still a function of caste based identities to a large extent underscoring the prevalence of caste-consciousness among people and further promoting it.

The elections, and the accompanying campaigns, have openly brandished caste as a vital factor, determining the fate of prospective candidates.

PRIVATE V/S PUBLIC SECTOR –

Caste-based reservations in publicly run academic institutions, and in public employment nourish the caste-consciousness among both – those getting benefit and those who are not getting benefited.

Private sector plays a major part in moving towards a caste-less society, as it gives opportunities to everyone by selecting candidates based on merit, rather than caste identity. With the advent of LPG, people have started to shift from their traditional occupation to engage in new jobs. This transition, along with the new work environment has certainly relegated caste identity to the background.

RESERVATIONS –

The provision of reservations has been made for the Scheduled Castes (SC), ST and OBCs in government jobs and admissions in public institutes.

Benefits of caste based reservations haven’t reached the poorest and the remotest. The provision which was supposed to be there for 10 years, had to be amended every 10 years since the need for caste based reservations is still felt.

INTERCASTE MARRIAGES –

Castes are coalescing and homogeneity is coming through cross marriages. Proportion of inter-caste marriages is increasing but still society has not become receptive for them.

Khap Panchayats diktats- They have issued various diktats against the boy or girl marrying outside the caste and various sanctions has been put on them and their families. Prominence of these extra constitutional bodies is major blow to the goal of caste-less society.

Honor-killings are still practiced in some parts.

ECONOMIC EMPOWERMENT –

Increasing economic viability through Inclusive Economic and social development programmes MGNREGA, Skill India, Make in India decreased the caste based differences.

CASTE CONSCIOUSNESS –

In a positive sense, this gives opportunity for lower castes to progress through awareness about injustice done to them in the guise of caste. This provides them opportunity to get organized and fight for equality.

At the same time, Superiority complex still exists among higher castes. Caste-based politics, chauvinistic attitudes further encourage it. As a result Incidents of discrimination or violence against lower castes are still reported in large numbers.

CONCLUSION –

Caste has been perhaps the most important factor that has shaped up the Indian society in general, and has provided it its unique character, in the context of diversity and establishment of a definite social hierarchy. But, at the same time, caste has also been the biggest reason for division, and unjust segregation, isolation and frank injustice.

Despite tremendous efforts by government, caste-divisions still plague our society. It is time for us to ensure that the ills of a caste-based society are purged at the earliest by promoting the concepts of equality and egalitarianism, instead of division and classification. Major attitudinal change is the need of the hour.

 


Topic: Population and associated issues

3) Analyse the trends and pattern in inter-state migration of people and labour mobility in India. (200 Words)

The Economic Survey 2016-2017, Chapter 12

According to census 2011 and NSSO, Migrants constituted about 30% of total working population. Rapid urbanization and economic developments have lured vast pool of surplus labor from rural hinterlands to urban hotspots for better employment opportunities and growth prospects.

Trends and patterns in inter-state migration:

  • High-levels of migration: This is evident from Census data which says about 5-6.5 million people migrated annually between states during 2001-2011. Railway passenger data says nearly 9 million people migrated since 2011. This can be attributed for getting better economic opportunities elsewhere due to falling agriculture incomes, urbanization and globalization.
  • Workforce migration is observed as movement from less affluent states like of BIMARU to affluent states like that of Tamil Nadu, Delhi and Goa. Relatively less developed states such as Bihar and Uttar Pradesh have high net out migration. Relatively more developed states have net in migration: Goa, Delhi, Maharashtra, Gujarat, Tamil Nadu, Kerala and Karnataka. 
    The largest immigration was at Delhi region, which accounted for more than half of migration in 2015-16, while Uttar Pradesh and Bihar taken together account for half of total out-migrants.
  • Inter-state v/s intra-state – Migrant flow between the states are lower than flows within states. To an estimate that flow within the state is four times than between states.
  • Migration barrier: language is not a barrier. In labour migration geographic distance appears to be an obstacle than the linguistic and cultural variability considered to be. People still prefer to move only to neighbouring states when they migrate inter state.
  • Migration is accelerating: Rising to 4.5 per cent per annum in 2001-11 from 2.4 per cent in 1991- 2001. This can be attributed to falling agricultural incomes due to climate change or monsoon failures. According to Census 2001, 8.1% of Indian workforce migrated for economic reasons.
  • Male dominant migration: Over 80% migrants are male. This is evident from the feminization of agriculture and falling women contribution to GDP and workforce participation. The share of women in migrant force is also increasing which was hitherto negligible.
  • Acceleration of female migration is double that of male in 2000s: This can be due to base effect. Increase in female migration is also to be considered in the light of the reason for migration which mostly accounts for uneconomic reason like marriage.
  • Portability of food security benefits, health care, and a basic social security framework for the migrant are crucial.
  • Rewards (in the form of prospective income and employment opportunities) have become greater than the costs and risks that migration entails.

 

CONCLUSION –

While migration and associated surge in economy is plausible, the cost and risks associated with it should be considered by policymakers. A basic social security framework and facility to avail food security, health care in different states should be considered while formulation of migration- policy.

 


General Studies – 2


Topic: Issues relating to development and management of Social Sector/Services relating to Health

4) It is argued that there is an urgent need to amend the Medical Termination of Pregnancy (MTP) Act, 1971. Examine why. (200 Words)

EPW

Introduction-

India is the country wherein burden fertility and related aspects lies mainly on woman .India is one of the few countries where the legislation on abortion, 46 years ago, has not translated into access to safe abortion care.

Abortion in India:

The Indian abortion laws fall under the Medical Termination of Pregnancy (MTP) Act, which was enacted by the Indian Parliament in the year 1971 with the intention of reducing the incidence of illegal abortion and consequent maternal mortality and morbidity. The MTP Act came into effect from 1 April 1972 and was amended in the years 1975 and 2002.

Pregnancies not exceeding 12 weeks may be terminated based on a single opinion formed in good faith. In case of pregnancies exceeding 12 weeks but less than 20 weeks, termination needs opinion of two doctors. The Medical Termination of Pregnancy (MTP) Act of India clearly states the conditions under which a pregnancy can be ended or aborted, the persons who are qualified to conduct the abortion and the place of implementation. Some of these qualifications are as follows:

  • Women whose physical and/or mental health was endangered by the pregnancy
  • Women facing the birth of a potentially handicapped or malformed child
  • Rape
  • Pregnancies in unmarried girls under the age of eighteen with the consent of a guardian
  • Pregnancies in “lunatics” with the consent of a guardian
  • Pregnancies that are a result of failure in sterilization

Despite the legislation being progressive in its recognition of the concept of abortion under special circumstances, there have been demands to amend it, based on certain reasons.

The reasons are:

  • The act provides for abortion after 2 weeks only when there is special case recognized by Supreme Court. This provision has led to the various decisions by Supreme Court as per the demand of particular case. Courts decisions rely on bare text of law which was formed in 1971 when there were no advanced technologies were available to detect birth defects.

E.g.: Recently, the Supreme Court permitted a rape survivor to terminate her pregnancy at 24 weeks, which is beyond the permissible 20 weeks limit prescribed under the Medical Termination of Pregnancy Act, 1971

  • Such kind of on case based legislation has increased the burden on judiciary, raising the number of litigants.
  • The Abnormalities of Fetus cannot be detected by completely after 20 weeks as in certain cases the abnormalities may develop after 20 weeks as well.
  • This law as formed in 1971 does not recognize single mother or unmarried woman in its text.
  • The desire of the mother to abort is an aspect that has not been taken into consideration, and the justification of the circumstances must be made by the mother alone.
  • MTP Act in 1971 was guided either by concerns about population control, or preventing high mortality in women resorting to non-qualified and non-regulated abortion service providers. There is need to consider the new social aspects of contemporary era wherein dignity of woman body and her choices about her life are equally important.

The proposed amendment is much progressive with following characters:

  • Amendment mentions that length of the pregnancy has no bearing on the need for an abortion in the case of substantial foetal abnormalities (to be listed in the rules under the act), in addition to the endangerment of the life of the pregnant woman.
  • This Amendment, if passed, would make judicial appeal unnecessary as abortions would be permitted based on the opinion of a registered healthcare provider.
  • It defines “termination of pregnancy,” differentiate between medical and surgical methods of abortion, and include Ayurveda, Unani, siddha and homeopathy practitioners, nurses, and auxiliary nurse midwives in the definition of “registered healthcare provider.”
  • The proposed amendments, addresses the previously neglected aspect of women’s choice and autonomy. The amendments will allow for abortions on-demand up to 12 weeks, and will extend the previous 20-week limit to 24 weeks in cases where the health of the pregnant woman and abnormalities in the fetus, physical and mental, are to be considered by the healthcare provider in deciding to conduct an abortion.
  • Proposed amendment detaches the marital status of women from citing contraceptive failure as the reason for seeking abortion. With social and medical circumstances having undergone drastic changes since 1971, a law such as the MTP Act cannot remain a static law.

Conclusion-

Forcing a woman to go through an unwanted pregnancy is an unequivocal violation of her right to dignity, and sexual and reproductive freedom as guaranteed in the constitution. Hence urgently the draft must take shape of act.

 


Topic: Issues relating to development and management of Social Sector/Services relating to Health. 

5) Analyse how Indian states are performing with regards to life expectancy, IMR and fertility compared to international counterparts. (200 Words)

The Economic Survey 2016-2017, Chapter 10

Introduction-

Life expectancy at birth (LE) indicates the number of years a newborn would live if prevailing patterns of mortality at the time of its birth were to stay the same throughout its life.

Infant mortality rate (IMR) is defined as the number of infants dying before reaching one year of age, per 1,000 live births in a given year.

Total fertility rate (TFR) is defined as the number of children that would be born to a woman if she were to live to the end of her childbearing years and bear children in accordance with age-specific fertility rates in a given year.

Life expectancy-

  • Life expectancy shows convergence with international counterparts; however the progress is slower and has variance in different states. Kerala, which started off with a life expectancy of 73.5 years in 2002, posted an increase of about 1.27 years over 11 years; UP, which started off with an LE of 60.8 years in 2002, saw a gain that was twice as large of about 3 years.
  • Such improvement in LE compared to previous decade owes to rising level of income, improving medical technologies and antibiotic treatment with high medical care across states. Such figures reflect the changing socio-economic scenario and development pattern difference among Indian states.

IMR-

  • Indian states show larger decline compared to average world country. The numbers on the IMR from different states shows that most of the Indian states are performing worse compared to their International counterparts. Although many Indian states have shown larger decline in IMR, (For example, Odisha registered a 38 point decline in IMR over the 2000s whereas the average country in the world with similar IMRs in 2002 posted only a 28 point decline; Bihar, the median state in 2002, reports a drop from an IMR of 61 in 2002 to 42 in 2014.), they still lie below the world average. This may be reflecting that children and women perhaps bear the burden of deficient systems of health delivery.

Fertility-

  • 12 Indian states out of the reporting 23 states have reached levels of fertility that are below the replacement rate. There is evidence of strong convergence across the states. For example, between 2002 and 2014, UP reduced its TFR by 1.3 points compared with Kerala that registered an increase and Tamil Nadu which posted a very small decline.
  • Again, all the Indian states (with the exception of Kerala) are performing much “better” (in the sense of more rapid fertility declines) than countries on average. The extent to which they are doing better is striking especially for the high TFR states such as Bihar, UP, MP and Rajasthan. These states are in fact posting much stronger fertility declines than is true of the average country.
  • The figures show the striking over-performance of the Indian states. For their level of development, the Indian states have much lower levels of fertility than countries internationally. These fertility developments have strong implications for the demographic dividend.

 


General Studies – 3


Topic:  Indian economy  – growth and development

6) Critically discuss how economic liberalization in India has affected in terms of growth and trade for agriculture in India. (200 Words)

EPW

Expectations from economic liberalization to Agriculture-

It was argued that the initiation of reforms, liberalization of external trade and corresponding price incentives would lead to enhanced investment, availability of crucial inputs, and increased output in agriculture.

Moreover, it was expected that a shift in the terms of trade in favor of agriculture will improve agricultural exports and increase growth rate. Favorable terms of trade were expected to have a positive impact in terms of raising agricultural production and private investment in India.

Need of high growth rate in Agriculture-

High growth of the agricultural sector is crucial for overall development of economy. In India, its importance is heightened with a substantial section of the population dependent on agriculture for employment. As per the National Sample Survey Office (NSSO), about 59% of male workers and 75% of women workers were dependent on agriculture in 2011–12. High agricultural growth is important to reduce rural poverty. It was argued that doubling of the rate of agricultural growth from 2% to 4% along with 9% rate of growth of the economy will reduce income disparities between the agricultural and non-agricultural sectors (Planning Commission 2006).

Effect of Economic Liberalization on Agriculture-

  • Share in GDP- Growth rate of gross domestic product (GDP) of agriculture has declined since the initiation of economic reforms in India. However, during this period, growth rates of GDP have been increasing except for the two years between 2010–11 and 2013–14. It shows an increasing divergence between growth rates of GDP of agriculture and economy between 1990–91 and 2009–10, thereby indicating the declining importance of agriculture in the growth trajectory of India.

Declining contribution of agriculture is also reflected in terms of a steady decline in the share of agriculture in overall GDP. The share of agricultural output in GDP had declined by half between 1989–90 and 2013–14. This decline had started in the 1980s; however it was sharper in the 1990s and in the new millennium since 2000. The share of agricultural output in GDP had declined by 4.4 percentage points in the 1980s, the corresponding figures in the 1990s and post 2000 were 5.6 and 7.3 percentage points, respectively. This shows that the agricultural sector is losing its importance as an income generating activity at a faster pace with the onset of reforms in India.

  • Growth-rate in production- The growth rates of production and yield of most of the major crops have declined in the years following the initiation of economic reforms as compared to the 1980s. Exceptions to this general trend were observed for pulses and cotton.

Since the 1990s, growth in production of foodgrains was mainly driven by rice and wheat. The increase in growth rate of production of wheat, more pronounced since 2000–01, was largely due to expansion in area under cultivation. The decline in area under coarse cereals in all the sub-periods between 1981–82 and 2014–15, has been sharper with the onset of reforms.

There was a sharp rise in the production of oilseeds in the late 1980s and early 1990s due to quantitative restrictions on imports and technological modernisation programme of the government as part of Technological Mission on Oilseeds. Due to an increase in imports as part of trade liberalization measures, there was a sharp decline in the area under cultivation and production of oilseeds. As a result expansion in area under cultivation and growth rate of output of oilseeds had declined drastically in the 1990s as compared to the preceding decade. With the reintroduction of import duties on imports of oilseeds in 2001, and more favorable prices in the domestic market, there was an increase in the area and production, post 2000. Import duty on crude edible oil was eliminated in 2010–11, from a high of 75% in 2004. This adversely affected domestic oilseed producers.

  • Capital formation in agriculture: The declining trend in capital formation since the 1990s implies that there has been lesser investment in agriculture as compared to the non-agriculture sector. The share of public capital formation in total capital formation in agriculture had gone down from 52% in 1981–82 to 21% in 2012–13. Public capital formation has a long-term beneficial impact on agriculture as compared to subsidies whose impact is short-term.
  • Role of credit: The share of rural branches in total number of branches increased from 36.3% in 1975 to 58.2% in 1990. It declined from 57.2% in 1994 to 38.6% in 2014. Thus, by 2014, the share of rural branches had declined to a level very similar to that of 1975.

Trends in credit–deposit ratio and shares of priority sector and agriculture in total outstanding credit of commercial banks respectively. Both declined in the 1990s as compared to the 1980s. Since 2001, however, there has been a turnaround, whereby there were steep increases in these ratios. It is argued that increase in rural credit since 2001 was largely due to an increase in indirect finance in agriculture and definitional changes that incorporated export-oriented and capital-intensive agriculture under priority sector lending. It is also argued that the main beneficiaries of this change were large agribusiness companies and big cultivators. The share of the latter in total credit outstanding and loan per account increased substantially between the mid-1990s and 2004–05. It can be argued that the revival of rural credit in the new millennium did not improve the performance of agriculture sector as compared to the 1980s, and neither did it benefit an overwhelming number of small and marginal cultivators.

  • Research and extension services: The share of public spending on agricultural research and extension services in GDP of agriculture in India has been lower than that observed in the 1990s in developed nations (2% to 4%), and the average share in developing nations (0.75%). share of public spending on research and extension in GDP of agriculture and allied activities was low since the 1960s, as well as in the subsequent decades. In other words, public spending on agricultural research and extension services did not increase after reforms.

Conclusion-

Expectations regarding improvements in terms of trade for agriculture did not materialize after the reforms. Besides, agricultural trade liberalization has exposed domestic producers to the volatilities of international prices of agricultural commodities that have turned agriculture into an unviable occupation. Studies carried out in different parts of India have also shown that a significant proportion of households were earning negative incomes from crop production. Neither there has been any significant movement in the terms of trade in favor of agriculture after reforms, nor have the cultivators gained from more exposure to international markets and prices.


Topic: Indian economy – growth and development

7) To improve rural economy, it’s imperative to rise agricultural productivity and create non-farm employment. This should be complemented by provisioning of public services such as health, roads, and housing.  Elaborate the importance of these goals and critically examine how recent budget strives to achieve them. (200 Words)

EPW

Introduction:-

With huge population still living in rural India, rural development plays an important factor for growth of the Indian economy. Rural India is yet to play big role in India’s economic voyage and there is dire need for future investments in the rural areas of India to decrease urbanization and increase employment in small towns and villages.
So, there is need for improvement in public health services such as health, road and housing.

  1. A healthy citizen acts as a resource to the economy and provides an impetus for revival instead of acting as a liability. Budget 2016 announces action plan to eliminate kala-azar by 2017,leprosy by 2018 and measles by 2020 and TB by 2025.Conditional cash transfer for women undergoing institutional delivery will ensure improved infant mortality rate .Better health facilities also improves labour force participation among the women.
  2. All weather roads connecting villages to cities are a sign for development and growth. As the rail and general budget is a combined one there is a synergy the Union can now synergize investment in rail, roads, rivers and civil aviation. Farmers can sell its product at a fair price with the platform of e-NAM. The Union has also achieved landmark with almost doubling of road construction achievement rate for the Pradhan mantri Gram Sadak Yojana(PMGSY).
  3. Better housing facilities for the rural people with basic amenities is the need of the hour. With India achieving 100+ districts ODF(open defecation free) under the Swacch Bharat campaign is cause to cheer. Union has announced ‘Housing for All ‘scheme in the budget. National Housing bank will refinance individual housing loans of about 20,000 crore in the year 2017-18.

Areas of concern:
1.WHO assessment revealed that India will not be on track to eliminate TB even by 2050.There is a need to ensure adequate availability of specialist doctors to strengthen secondary and tertiary health care.
2. Instead of only depending on farm-outputs other allied activities like animal husbandry like poultry, bee-keeping, sericulture shall be developed with low inputs required for its establishment.
With better utilisation of resources and catering to the need of every rural community, the rural economy may gain an impetus thus adding to the GDP.

 

 


TopicIndian economy – growth and development

8) Assess how much internal integration India has achieved in terms of economy during the last seven decades. (200 Words)

The Economic Survey 2016-2017, Chapter 11

Introduction:-

The idea of One Economic India has gained momentum in recent times. This has led to provide thoughts to internal integration of India.

WHY ONE ECONOMIC INDIA:-

  • Cross border trades amounts to nearly 54% GDP implying that interstate trade amounts to 1.7% of Indias international trade.
  • Language has no barrier in interstate trade in India which can be seen in free and uninterrupted flow of goods and services across the state.
  • The current system of indirect taxes perversely favours interstate trade than intrastate trade especially in terms of final consumption of goods, exempted goods.
  • Intra farm trade across the state is surprisingly larger than Arms length interstate trade (that is trade between different firms)

India’s Constitutional Provisions and Jurisprudence
That comparison requires understanding the constitutional provisions on both achieving and circumscribing the common market. Articles 301-304 provide a layered set of rights and obligations. Article 301 establishes the fundamental principle that India must be a common market:

  1. Freedom of trade, commerce and intercourse.Subject to the other provisions of this Part, trade, commerce and intercourse throughout the territory of India shall be free.
    Articles 302-304 both qualify and elaborate on that principle. Article 302 gives Parliament the power to restrict free trade between and within states on grounds of public interest.
  2. Power of Parliament to impose restrictions on trade, commerce and intercourse.Parliament may by law impose such restrictions on the freedom of trade, commerce or intercourse between one State and another or within any part of the territory of India as may be required in the public interest.
    Article 303 (a) then imposes a most-favored nation type obligation on both Parliament and state legislatures; that is no law or regulation by either can favour one state over another.
  3. Restrictions on the legislative powers of the Union and of the States with regard to trade and commerce
    (1) Notwithstanding anything in Article 302, neither Parliament nor the Legislature of a State shall have power to make any law giving, or authorising the giving of, any preference to one State over another, or making, or authorising the making of, any discrimination between one State and another, by virtue of any entry relating to trade and commerce in any of the Lists in the Seventh Schedule
    Article 304 (a) then imposes a national treatment-type obligation on state legislatures (apparently not on Parliament); that is, no taxes can be applied to the goods originating in another state that are also not applied on goods produced within a state. This Article refers only to taxes and not to regulations more broadly.
  4. Restrictions on trade, commerce and intercourse among StatesNotwithstanding anything in Article 301 or Article 303, the Legislature of a State may by law:
  • (a) impose on goods imported from other States or the Union territories any tax to which similar goods manufactured or produced in that State are subject, so, however, as not to discriminate between goods so imported and goods so manufactured or produced; and
    But then Article 304 (b) allows state legislatures to restrict trade and commerce on grounds of public interest.
  • (b) impose such reasonable restrictions on the freedom of trade, commerce or intercourse with or within that State as may be required in the public interest: Provided that no Bill or amendment for the purposes of clause shall be introduced or moved in the Legislature of a State without the previous sanction of the President
    Interestingly, this freedom to the states in Article 304 (b) is only different from that provided to Parliament in Article 302 in that states have to impose “reasonable restrictions” whereas Parliament may impose “restrictions.” Of course, states can only impose restrictions in areas that are either on the state or concurrent list.
    The gist of these provisions is that both the Centre and the States have considerable freedom to restrict trade and commerce that hinder the creation of one India.
    Moreover, the jurisprudence has unsurprisingly come down in favour of even more permissiveness. Evidently, while the purpose of Part XIII was to ensure free trade in the entire territory of India, this is far from how its practical operation has panned out. Financial levies as well as non-financial barriers imposed by the States have become a major impediment to a common market. Levies in the nature of motor vehicles taxes, taxes at the point of entry of goods into specified local areas, sales tax on manufacturers of goods from outside a particular State, have always existed between States. At the same time, many of such levies are constitutionally valid and have been upheld, in principle, by the Supreme Court.

INDIAS INTERNAL INTEGRATION IS SHOWN ON FOLLOWING 4 PARAMETERS:

  • Distance – The most remarkable finding is that India’s elasticity of trade flows with respect to distance is much lower than one might have expected – a 10 percentage point increase in distances between economic capitals results in a fall in trade of only 5.65 percentage points15. Contrast this with the US, which enjoys a much better freight infrastructure, where a 10 percentage point increase in distance results in trade falling by 9.3 percentage points. In Section VI, an attempt is made to explain why India might have a lower distance elasticity than the US.
  • State GDP coefficients – The elasticity of trade with respect to income is positively correlated with trade flows: a 10 percentage point increase in GDP of an importing or exporting state is associated with an 8.2 and 9.6 percentage points increase in trade, respectively. The elasticity of trade with respect to income is higher in the US at 11 and 9 percentage point for 10 percentage point increase in GDP.
  • Proximity coefficient – Adjoining states in India tend to trade with each other about 90 per cent16 more than other states17. This effect is lower than the US, where interstate trade patterns are dominated by adjoining state pairs.
  • Language coefficient – In the international trade literature, the language dummy has been found to be persistently positive and significant, implying that countries with shared languages tend to trade with each other more than with others. Subramanian and Wei (2007), for example, find that trade between countries sharing a common language is 16 per cent higher than others, whereas, Rose (2003) reports a 30 per cent higher trade for such country pairs. It is therefore surprising that there is insufficient evidence for this to be true within India; the Hindi dummy is insignificant for inter firm interstate trade but positive and weakly significant for intra firm trade.