Topic: Investment models.
4. Enumerate the recent structural reforms taken to alleviate the problems of the telecom sector in India. Is 100% foreign direct investment (FDI) through automatic route in the telecom sector a step in the right direction? Comment. (250 words)
Difficulty level: Moderate
Reference: Live Mint , The Hindu
Why the question:
The Cabinet approved several measures to extend a lifeline to the cash-strapped telecom sector.
Key Demand of the question:
To list the reforms in telecom sector and to determine if 100% FDI via automatic route is prudent policy decision.
Directive word:
Comment– here we must express our knowledge and understanding of the issue and form an overall opinion thereupon.
Structure of the answer:
Introduction:
Begin by giving context of reforms announced to revitalise the telecom sector.
Body:
Write the major steps by the government to ease telecom sector woes such as redefinition of the much-litigated concept of adjusted gross revenue (AGR), to exclude non-telecom revenue and a four-year moratorium on players’ dues to the government etc.
Next, write about pros and cons of allowing 100% foreign direct investment (FDI) through automatic route.
Conclusion:
Comment on the need to ensure a level playing filed and promote healthy competition in the aftermath of 100% FDI via automatic route.
