Print Friendly, PDF & Email

[Mission 2022] Insights SECURE SYNOPSIS: 7 March 2022

 

 

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: Indian culture will cover the salient aspects of Art Forms, literature and Architecture from ancient to modern times.

1. Throw light on progress of architecture and paintings during the Vijayanagar period. Can we say that the Vijayanagar architecture is predominantly religious in character? Comment. (250 words)

Difficulty level: Moderate.

Reference: New Indian Express

Key Demand of the question:

To write about the progress of Vijayanagar architecture and its nature.

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 mentioning the Vijayanagar rulers were great patrons of art and architecture.

Body:

First, Mention the various features of Vijayanagar architecture and their progress – Vijayanagar temples are surrounded by strong enclosures and characterized by ornate pillared kalyanamandapa (marriage halls); tall rayagopurams (carved monumental towers at the entrance of the temple) built of wood, brick, and stucco in the Chola style; and adorned with life-sized figures of gods and goddesses.

Next, write about the development of paintings under Vijayanagar period and give examples of finest works produced developed during this period.

Next, with examples analyse if the Vijayanagar architecture was predominantly religious in nature.

Conclusion:

Conclude by commenting on the overall nature of architecture of Vijayanagar.

Introduction

Vijayanagara or “city of victory” was the name of both a city and an empire. The empire was founded in the fourteenth century. In its heyday it stretched from the river Krishna in the north to the extreme south of the peninsula. People remember it as Hampi, a name derived from that of the local mother goddess, Pampadevi.

Body

Vijayanagar Architecture

  • Vijayanagar temples are surrounded by strong enclosures and characterized by ornate pillared kalyanamandapa (marriage halls); tall rayagopurams (carved monumental towers at the entrance of the temple) built of wood, brick, and stucco in the Chola style; and adorned with life-sized figures of gods and goddesses.
  • This Tamil dravida-influenced style became popular during the rule of king Krishnadevaraya and is seen in South Indian temples constructed over the next 200 years.
  • Examples of Rayagopuram are the Chennakesava Temple in Belur and the temples at Srisailam and Srirangam.
  • In addition to these structures, medium-size temples have a closed circumambulatory (Pradakshinapatha) passage around the sanctum, an open mahamantapa (large hall) and a temple tank to serve the needs of annual celebrations.
  • Vijayanagar temples are also known for their carved pillars, which depict charging horses, figures from Hindu mythology, and yali (hippogriphs).
  • Some of the larger temples are dedicated to a male deity, with a separate shrine intended for the worship of his female counterpart.
  • Some famous temples exemplifying the Vijayanagar style include the Virupaksha Temple at Hampi and the Hazara Rama temple of Deva Raya I etc.
  • Hampi Stone chariot is influenced by Raths made in Mahabalipuram by Pandayas. Example: Dharmaraya rath, Draupadi Rath etc.

Vijayanagar Paintings

  • Human faces usually appear in the profile, figures stand with a slight slant with both feet pointing in the same direction
  • Most paintings are seen mainly on the ceilings of the mandapas and in the corridors of the temple.
  • The themes of painting are generally religious. Eg Lepakshi Temple.
  • There is simplicity and vigour in the style of the paintings with a sense of movement and energy caught in the figures
  • These paintings show a rhythmic forward movement and do not look overcrowded.
  • Most of these Vijayanagar paintings depict the mythological legends of Siva and stories from the epics but they also represent the life and customs of the Vijayanagar Empire.
  • Some of the South Indian Temples are known to be adorned with Vijayanagar paintings. They are the Veerabhadra Temple, Virupaksha Temple and Kalyana Sundareswara Temple.

Vijayanagar architecture was not predominantly religious in character

Vijayanagar era architecture has a lot of courtly, and civic architecture apart from the religious architecture.

  • Palaces and Courtly Architecture:
    • Most of the palaces faced east or north and stood within compounds surrounded by high, tapering stone and earth walls.
    • They were built on raised granite platforms with multiple tiers of mouldings decorated with carved friezes.
    • The courtly architecture of Vijayanagar is generally made of mortar mixed with stone rubble and often shows secular styles with Islamic-influenced arches, domes, and vaults.
    • Examples are the Lotus Mahal palace, Elephant stables, and watch towers.
  • Civic Architecture
    • Gateways were distinctive architectural features that often defined the structures to which they regulated access.
    • The arch on the gateway leading into the fortified settlement as well as the dome over the gate are regarded as typical features of the architecture introduced by the Turkish Sultans.
    • Located on one of the highest points in the city, the “mahanavami dibba” is a massive platform rising from a base of about 11,000 sq. ft to a height of40 ft. There is evidence that it supported a wooden structure.

Conclusion

The Vijayanagara style is an amalgation of the Chalukya, Hoysala, Pandya and Chola styles evolved earlier in the centuries when these empires ruled and is characterised by a return to the simplistic and serene art of the past.

 

Topic: Distribution of key natural resources across the world (including South Asia and the Indian sub-continent);

2. What are Karewas? How are they formed? Discuss their geographical distribution in India and economic significance. (250 words)

Difficulty level: Easy

Reference: Down to Earth

Why the question:

Despite its agricultural and archaeological importance, karewas are now being excavated to be used in construction. Between 1995 and 2005, massive portions of karewas in Pulwama, Budgam and Baramulla districts were razed to the ground for clay for the 125-km-long Qazigund-Baramulla rail line.

Key Demand of the question:

To write about the formation of Karewas, its geographical spread and economic importance.

Directive word: 

Discuss – This is an all-encompassing directive – you must debate on paper by going through the details of the issues concerned by examining each one of them. You must give reasons for both for and against arguments.

Structure of the answer:

Introduction: 

Begin by defining the Karewas deposits and their important features.

Body:

First, write about the formation process of Karewas – The rise and Pir Panjal in the Pleistocene Period and formation of Karewas.

Next, write about the geographical distribution in India.

Next, write about the economic importance of Karewas deposits.

Conclusion:

Conclude by mentioning the need to conserve Karewas deposits.

Introduction

The word Karewa in Kashmiri dialect means, “elevated table-land.” These plateaus are 13,000-18,000 metre-thick deposits of alluvial soil and sediments like sandstone and mudstone. Karewas are lacustrine deposits (deposits in lake) in the Valley of Kashmir and in Bhadarwah Valley of the Jammu Division. These are the flat topped mounds that border the Kashmir Valley on all sides. They are characterized with fossils of mammals and at places by peat.

Body

 

Formation

  • These sediments occur as terraces, plateaus and mounds and rest over the Paleozoic-Mesozoic sediments of the Kashmir ‘basin’.
  • Karewaswere formed during the Pleistocene Period (1 million years ago), when the entire Valley of Kashmir was under water.
  • Due to the rise of Pirpanjal, the drainage was impounded and a lake of about 5000 sq. km area was developed and thus a basin was formed. Subsequently, the lake was drained through Baramulla gorge. The deposits left in the process are known as karewas.
  • The thickness of karewas is about 1400 m.
  • The karewashave been elevated, dissected and removed by subaerial denudation to be in the present position.

Geographical distribution in India

  • The Karewadeposits in the Kashmir valley have been conventionally divided into two stages, lower and upper, representing argillaceous and arenaceous facies respectively.
  • The upper Karewasare less fossiliferous than the lower Karewas.
  • The entire belt touching the foothills of the Pirpanjal represents the lower Karewas, which has been exposed to the rivers starting from the south such as Veshav, Rembiara, Romushu, Dodhganga, Shaliganga, Boknag nar and Ningli.
  • Lower Karewa sections at Aharbal, Anantnag, Arigam, Baramulla have been exposed by these rivers.
  • The rest of the Karewa sediments occupy the middle of the entire flank of the valley, including Pampore, Srinagar, Burzuhom, Dilpur, Pattan, Parihaspora, and parts of Baramulla District.
  • These represent upper Karewas of the valley.
  • The late Cenozoic deposits exposed in the Kashmir valley assume special significance as they are extensively fluvioglacial, fluvial, lacustrine and eolian in origin.

Economic Significance

  • The Karewa deposits are composed of sand, silt, clay, shale, mud, lignite, gravel and loessic sediments.
  • Therefore, it is extremely important for agricultural and horticultural practices in the valley.
  • The karewas are mainly devoted to the cultivation of saffron, almond, walnut, apple orchards and several other cash crops.
  • Kashmir saffron, which received a Geographical Indication (GI) tag in 2020 for its longer and thicker stigmas, deep-red colour, high aroma and bitter flavour, is grown on these karewas.

Conclusion

Despite its agricultural and archaeological importance, karewas are now being excavated to be used in construction. Between 1995 and 2005, massive portions of karewas in Pulwama, Budgam and Baramulla districts were razed to the ground for clay for the 125-km-long Qazigund-Baramulla rail line and the Srinagar airport is built on the Damodar karewa in Budgam. The rampant destruction has reduced these plateau lands into ugly ravines. Thus we need to preserve this geological treasure and legacy for the generations to come.

 

Topic: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources.

3. Phygital education – a hybrid of physical and digital education systems is a good way forward to improve learning outcomes in the country but enabling infrastructure needs to be put in place for it be a success. Discuss. (250 words)

Difficulty level: Moderate

Reference: Live Mint

Why the question:

Phygital education has the potential to transform education in India. It is the future because it contextualizes and reimagines education.

Key Demand of the question:

To write about the potential of Phygital education in improving learning outcomes and steps needs to make it a success.

Directive word: 

Discuss – This is an all-encompassing directive – you must debate on paper by going through the details of the issues concerned by examining each one of them. You must give reasons for both for and against arguments.

Structure of the answer:

Introduction: 

Begin the defining Phygital education and giving its context.

Body:

In the first part, write about the potential of Phygital education in the country and how covid-19 was a boost for it. Mention the limitations of Phygital systems in India.

Next, in detail write about steps that are required to create enabling infrastructure for Phygital education in India – making it multi-lingual and accessible, Create engaging, immersive learning experiences, create strong learning communities and Improve the quality of instruction on digital platforms etc.

Conclusion:

Conclude with a way forward.

Introduction

Covid-19 pandemic made us look into the new way of imparting education that is through “blended learning”. Phygital Education or Blended learning in simple words is the amalgamation of physical learning and digital learning.

Body

Why phygital education could be a good way forward ?

  • Phygital education has been most sought out in the recent times as there is a considerable drop seen students’ interest in learning new things dwindling more than ever.
  • This is seconded with insanely high amount of dropout rates being witnessed by educational institutions worldwide.
  • The world is evolving today at a breakneck pace and so are the demands to survive in it.
  • Phygital education is a kind of learning that not only helps students upskill their soft skills but also explore different career paths to be prepared for tomorrow.
  • Phygital learning has the capability to ditch the monotony of regular schooling by reforming education.
  • It has the opportunity to foster a lucrative environment that inspires each student to take strides of innovation by upskilling and birthing the much-needed inquisitiveness in them towards everyday learning.
  • Gamification of learning a much optimistic way of making students master difficult to grasp concepts has been possible because of phygital education. This approach is especially helpful for young learners who have a shorter attention span and have a natural love for gaming.
  • It provides a new edge to the tedious everyday wearisome learning by motivating students as it uses video game design and game elements in traditional learning environments.
  • The outcome- maximized enjoyment and engagement in capturing the interest of learners and inspiration added in them to continue learning.

Challenges in Phygital education

  • Majority colleges in rural areas: The latest All India Survey on Higher Education (2019-20) report shows that 56% of the 42,343 colleges in India are located in rural areasand 78.6% are privately managed.
  • Poor internet penetration:Internet penetration in India is only 45% as of January 2021. This policy will only worsen the existing geographical and digital divide resulting in the exclusion of a large number of rural students.
  • All-round development hampered: Phygital learning leaves little room for the all-round formation of the student that includes the development of their intelligent quotient, emotional quotient, social quotient, physical quotient and spiritual quotient.
  • Dropout rates might increase: Blended learning mode assumes that all students who enter the arena of higher education have similar learning styles and have a certain amount of digital literacy to cope with the suggested learning strategies of BL. This is far from true.
  • Education in India is driven by a teacher-centred approach. Expecting these students to switch over quickly to collaborative and technology-enabled learning will be stressful for them. It may increase the existing dropout rate in higher education.

Way forward

  • Equity in access: The government should ensure equity in access to technology and bandwidth for all HEIs across the country free of cost.
  • Hassle-free access to students: building their digital literacy through simple, concise learning modules on how to operate a device and engage with a digital platform. Providing on-call support with minimum wait time via call centres, chatbots, etc, will help them overcome teething issues.
  • Digital training for teachers: Massive digital training programmes must be arranged for teachers.
  • Appointment of new teachers: Even the teacher-student ratio needs to be readjusted to implement BL effectively. This may require the appointment of a greater number of teachers.
  • Curriculum design: The design of the curriculum should be decentralized and based on a bottom-up approach.  Curriculum frameworks need to be developed that encourage the creation of competency-based micro modular courses.
  • Also, switching over from a teacher-centric mode of learning at schools to the BL mode at the tertiary level will be difficult for learners. Hence, the government must think of overhauling the curriculum at the school level as well.
  • More power with state governments: More power in such education-related policymaking should be vested with the State governments.
  • Periodic feedback and discussion: Finally, periodical discussions, feedback mechanisms and support services at all levels would revitalize the implementation of the learning programme of the National Education Policy 2020 and BL. It’ll lead to the realization of three fundamental principles of education policy: access, equity and quality.
  • The government of our country actively endorsing and initiating steps in the field of Phygital learning makes us believe more in the fact that it is here to stay in India and is the future of learning.
  • The government’s vision of a digital university to reach all students across the country, with its promise of personalized teaching at the doorstep, should be considered a landmark step in Indian education.

Conclusion

Phygital education has the potential to transform education in India. It is the future because it contextualizes and reimagines education. Blended education opens up immense opportunities for capacity building among frontline workers. It holds high empowerment potential because it can enable adults, especially women, resume education. Phygital education can serve as an engine of economic growth and a transformative force that empowers every Indian.

 

 


General Studies – 3


 

Topic: Infrastructure: Energy, Ports, Roads, Airports, Railways etc.

4. Analyse the potential of hydroelectric power in meeting India’s energy security targets? What are the associated risks which affect hydro power generation? (250 words)

Difficulty level: Moderate

Reference: Live Mint

Why the question:

With an ambitious decarbonization target announced at last year’s CoP-26 climate summit in Glasgow, Prime Minister Narendra Modi raised India’s nationally-determined contribution (NDC) goal of non-fossil energy capacity to 500GW by 2030, from 450 GW earlier, to help us achieve net zero carbon emissions by 2070.

Key Demand of the question:

Directive word: 

Analyse – When asked to analyse, you must examine methodically the structure or nature of the topic by separating it into component parts and present them in a summary.

Structure of the answer:

Introduction: 

Begin by defining hydroelectric energy and give the statistic highlighting extent of it being generated in India.

Body:

First, mention the potential of hydroelectric energy – plenty of rivers, favourable geology, presence of technological expertise, past success etc.

Next, write about the various risks that are associated with hydropower projects – political conflicts, social impact, economic viability and ecological concerns must be written in detail. Substantiate them with examples.

Conclusion:

Conclude with a way forward to remedy the above-mentioned limitations.

Introduction

Hydroelectric power projects basically generate electricity from flowing water.  Pumped storage hydro (PSH) plants are storage systems based on hydropower operations between two or more reservoirs (upper and lower) with an elevation difference. PSH plants are highly useful options for the integration of Renewable Energy power with the power system. India is blessed with immense amount of hydro-electric potential and ranks 5th in terms of exploitable hydro-potential on global scenario.

Body

India’s Energy scenario

  • As of December 2021, the installed generation capacity of the country stood at 393GW.
  • It comprises 235GW of thermal, 151GW of renewable (wind, solar, hydro and biomass) and 78GW of nuclear.
  • India saw its peak electricity demand surpass 200GW in 2021.
  • India is the third largest producer and consumer of electricity globally, with annual electricity production of around 1,200-1,300TWh and one of the largest synchronous power grids.

Potential of hydroelectric power in meeting India’s energy security targets

  • In India, PSH potential of about 120GW has been identified at about 120 sites.
  • Only nine plants with an installed capacity of 4,785MW have been commissioned so far, and three with a capacity of 2.7GW are under construction.
  • Apart from these, about 17 PSH projects with a capacity of 16.5GW in different states are under various stages of implementation.
  • Pumped storage schemes use domestically produced material and even the electrical mechanical parts are made in India, so PSH plants can serve the aims of Aatmanirbhar Bharat.

Associated risks which affect hydro power generation

  • Generation of Hydro power depends on the availability of water. When water is not available in the lean season, in summer and in drought year the generation drops.
  • Other issues like social impact, where lot of people get displaced, livelihood and resources are affected. There are environmental impacts, Disaster related impacts.
  • Most of the new projects are coming up in Himalayan region which is vulnerable to disaster in terms of earth quake, landslides, erosion, and flash floods. In the era of climate change there are glacial lake outburst flood (GLOF)which is because of the lakes which are created by the melting of glaciers which consists of boulders and silt.
  • There are issues of generation performance. 89% of India’s installed capacity does not generate power at the promised level.
  • There is the issue of Siltation and maintenance of Hydro power projects. Silt reduces the storage capacity and proportionally the power generation also goes down.
  • Hydro power projects do not consume fuel and it is assumed that there is no carbon foot print which is not correct. The World Commission on Damshas shown how the power generated particularly in tropical countries generates Methane. In one molecule of Methane there is 22 times more potent Green House Gas than CO2.
  • Hydro power projects involve deforestation which reduces the carbon sinks and thereby putting back more carbon into the atmosphere.
  • With climate change on the rise, the frequency and intensity of Droughts will increase in the coming years. The rainfall patterns are changing. This will impact the power generation capacity of the Hydro power projects.
  • Every Hydro power projects are plagued by cost and time overruns. The reason is lack in the appraisal mechanism particularly geological appraisal.
  • Hydro and PSH projects are a state government legislative subject, and require the support of many policymakers, including the MoP, MoEF&CC and electricity regulators, apart from state governments.

Way forward

  • There is a need to appraise the projects properly, have proper Environmental Impact Assessment (EIA)and proper public consultation process.
  • We should maintain the catchment area properly if not the rainfall which comes as flash floods damages the project.
  • Micro-hydel projects may also be promoted, as these have less of an adverse social and environmental impact on local communities.
  • Large, ‘smart’ hydropower projects may be developed, taking into account the economic, environmental and social concerns of local and downstream communities, in addition to national economic benefits.
  • Technical provisions in smart projects can minimize the impacts on aquatic life and terrestrial ecosystems.
  • India is using more of ground water and this reduces the surface water flow in the downstream area. All these factors should be taken into account while assessing the generation of Hydro power projects.
  • For prioritizing projects, in addition to capital cost and energy supplied, PSH developers and policymakers should consider factors that include the location of the project, duration of storage, availability of a pre-feasibility report, detailed surveys, investigations and project reports, etc, and the cost of the energy supplied, as well as the value of the flexibility assured by it.
  • An appropriate policy framework that lets costs and benefits be shared can increase the overall value for primary and end consumers.

 

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

5. What are niche banks? Differentiate between Payment Banks and Small Finance Banks. Do you think niche banking has been a success in India? Evaluate. (250 words)

Difficulty level: Easy

Reference: Insights on India

Why the question:

The question is part of the static syllabus of General studies paper – 3 and mentioned as part of Mission-2022 Secure timetable.

Key Demand of the question:

To write niche banking, its successes and limitation and to differentiate between SFB’s and payment banks.

Directive word:

Evaluate – When you are asked to evaluate, you have to pass a sound judgement about the truth of the given statement in the question or the topic based on evidence.  You must appraise the worth of the statement in question. There is scope for forming an opinion here.

Structure of the answer:

Introduction: 

Begin by defining niche banks.

Body:

First, mention a few features of niche banks.

Next, differentiate between Payment Banks and Small Finance Banks on the basis of the following – Scope of activities, Criteria, Nature of work, prohibited activities etc.

Next, evaluate the successes and limitations of Niche banks in Indian set up.

Conclusion:

Conclude by writing a way forward to overcome the limitations.

Introduction

Niche banks are banks that have a specific purpose, focused on a particular subset of the population.  A niche bank’s entire operations, marketing, and product mix are all developed to cater to the target market’s preferences. Small Finance Banks and Payments Bank are Niche Banks whose concept first came in the year 2007

Body

Niche banks

What exactly constitutes a “niche” is not set in stone. There are a number of Verticals a bank could focus on, for example:

  • Specific Demographics:A bank could target specific portions of the populace, like pensioners or young adults
  • Specific Industry: A bank could have chosen its product mix to meet the needs of specific industries, such as offering loans and payments with the specific purpose of buying real estate or offering services for workers in the gig economy
  • Specific Community: A bank could build up their products to address specific communities or be entirely based in that community, for example, local banks servicing unbanked and underbanked people

Differences between Payment Banks and Small Finance Banks

Basis of DifferenceSmall Finance BankPayments Bank
DefinitionSmall Finance Banks are financial institutions that intend to fund the financial needs of the underprivileged sections through basic banking activitiesA Payments Bank is like any other bank, but operating on a smaller scale without involving any credit risk. It can carry out most banking operations but can’t advance loans or issue credit cards.
Who can promoteIndividuals/ professional having 10 years’ experience in finance, NBFCs, microfinance companies, local area banks, etc.Can be promoted by Telecom Companies, Prepaid Card Issuers, NBFCs, Supermarket Chains, PSUs, etc.
Promoter’s Share40% in starting Then can be gradually brought down to 26% in 12 years40 % for first Five 5 years from the date of commencement of business
Capital RequiredMinimum Paid Up capital should be 100 CroresMinimum Paid Up capital should be 100 Crores
Regulatory RequirementsMeet CRR and SLR set by the RBIMeet CRR and SLR set by the RBI
Customer ReachCustomers are reached through its branchesCustomers are reached through Mobile banks
Demand DepositCan accept demand deposit like savings deposit without any fixed limitCan accept demand deposit like savings deposit only upto Rs. 1 lakh
Time DepositCan accept Time Deposit such as Fixed Deposit and Recurring DepositCan’t accept Time Deposit such as Fixed Deposit and Recurring Deposit
LoanCan offer loan. Must extend 75% loans to priority sectorsCannot offer loan
Remittance ServicesCan provide Remittance ServicesCan provide Remittance Services
Online Banking SolutionsCan offer online banking servicesCan offer online banking services such as bill payment, etc.
RevenueEarns revenue through leding servicesEarns revenue through transaction charges and fee income for remittances
Debit CardCan issue Debit Card and ATM CardCan issue Debit Card and ATM Card
Credit CardCan issue credit cardsCan’t issue credit cards
Target CustomersMSME, Small Farmers, Small Businessman, Unorganized Workers, etc.Poor migrant labourers, unbanked Indians, under-banked customers, low-income households and small businesses
Forex ServicesCan provide Forex Services and can charge less than commercial bank for these products
Adoption of TechnologyShould be fully technology driven right from the beginningShould be fully technology driven right from the beginning
BranchesFor Initial 3 years, 25% branches must be in rural areas to tap those areasMust have 25% branches in rural areas
Third Party ProductsCan sell third party products like mutual funds, indurance, pension products, etc.Can sell third party products like mutual funds, indurance, pension products, etc.

Evaluation of Niche banks

  • The issuance of licences to Payments Banks and Small Finance Banks (SFBs) has helped achieve last-mile connectivity in the financial inclusion drive  by lending more to micro, small and medium enterprises.
  • For instance, SFBs had mobilised deposits of ₹82,488 crore and extended credit of ₹90,576 crore to small and marginal farmers, and MSMEs (micro small & medium enterprises) by the end of FY 2019-20.
  • Niche banks have managed to stick to their stated objective of improving financial inclusion by lending more to micro, small and medium enterprises.
  • SFBs have also seen a rapid rise in their deposit base. Since microfinance institutions were largely the entities which converted to small finance banks, their focus has been to get access to cheaper funding by raising deposits.
  • There has been rise in the number of Payment Banks and small finance bank branches.

Challenges faced by Niche banks

  • Niche banks have to compete with existing public sector banks and RRBs.
  • Micro Finance Institution (MFI)/NBFC are specialised in micro lending operations with limited exposure to banking operations; that means they have to hire, train talent from the banking industry.
  • The cost of deposit mobilisation will be higher for niche banks as they cover rural and underserved segment.
  • Niche banks especially payment banks are required to invest minimum 75 per cent of its “demand deposit balances” into government securities. This limits their ability to earn from the deposit base as well.
  • Experience from Jan Dhan Yojana has shown that many such no-frill accounts have remained dormant, thus affecting the viability of the banks.
  • Medium of operation for these banks is the internet. India is struggling with very low internet speeds, which hinders the growth of these banks.

Way forward

  • There is a need for niche banking to cater to the specific and varied requirements of different customers and borrowers.
  • The perception and trust of people in new systems is of utmost importance. There will be a need for creation of awareness through proper communication strategy and depositor education.
  • Essentially, these specialised banks would ease the access to finance in areas such as RAM (retail, agriculture, MSMEs), infrastructure financing, wholesale banking (mid and large corporates) and investment banking (merchant banking and financial advisory services).
  • The niche banking reforms should focus on the need for higher individual deposit insurance and effective orderly resolution regimes to mitigate moral hazard and systemic risks with least cost to the public exchequer.
  • While promoting niche banks, the government should tighten the loose ends by allowing them to build diversified loan portfolios and have cross-holdings to mitigate concentration/market risks
  • Further, Government should establish sector-wise regulators, bestowing more powers to deal effectively with wilful defaulters, and paving the way for the corporate bond market (shift from bank-led economy) to create a responsive banking system in a dynamic real economy.
  • Risk management can be more specific and the neo-banks can leverage the technology to further (digital) financial inclusion and finance higher growth of aspirational new India.

Value addition

Evolution of Niche banks

  • Small Finance Bank and Payments Bank are called Differentiated Banks whose concept first came in the year 2007.
  • After working on this concept, RBI granted in-principle approvals to 10 for Small Finance Bank (SFB) in September 2015 and 11 entities for setting up payments banks (PBs) in August 2015.

Similarities

  • The main idea behind introduction of such banks by RBI is to target a specific market and customise these banks’ operations on the basis of this target market’s preferences.
  • The Small Finance Banks and the Payments Banks in India are both licensed under the Reserve Bank of India
  • All its guidelines and functioning is monitored by the central bank of the country.

 

Topic: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

6. Critically analyse the role bank mergers play in propelling the economic growth of the country. (250 words)

Difficulty level: Tough

Reference: Insights on India

Why the question:

The question is part of the static syllabus of General studies paper – 3 and mentioned as part of Mission-2022 Secure timetable.

Key Demand of the question:

To write about the role of bank mergers in economic growth.

Directive word:

Critically analyse – When asked to analyse, you must examine methodically the structure or nature of the topic by separating it into component parts and present them in a summary. When ‘critically’ is suffixed or prefixed to a directive, one needs to look at the good and bad of the topic and give a balanced judgment on the topic. 

Structure of the answer:

Introduction: 

Begin by giving the context of bank mergers in India.

Body:

Firstly, explain the rationale behind bank mergers.

Next, write about the how bank mergers will improve economic growth – more credit flow, consolidated holding, strong financial health etc.

Next, write about the limitation which does not leading to banking mergers translating into economic growth – overleveraged banks, lack of coordination between newly merged banks etc.

Conclusion:

Conclude with a balanced opinion forward.

Introduction

Public Sector Banks (PSBs) in India are fragmented, with some of them reeling under the mounting pressures of Non-Performing Assets (NPAs). The government in August 2019, announced a merger of ten public sector banks to four. One of the benefits of consolidation is higher operational efficiency gains to reduce cost of lending according to the official presentation made at the time of announcing the merger. Besides, banks with scale for building a $ 5 trillion economy to have enhanced risk appetite.

However, an analysis by the Reserve Bank of India in 2021 found Merged public sector banks are more risky than unmerged ones, though Indian banks are less risky now and are much better off than the first wave of the pandemic.

Body

Pros of bank merger

  • Banks:
    • Small banks can gear up to international standards with innovative products and services with the accepted level of efficiency.
    • PSBs, which are geographically concentrated, can expand their coverage beyond their outreach.
    • A better and optimum size of the organization would help PSBs offer more and more products and services and help in integrated growth of the sector.
    • Consolidation also helps in improving the professional standards.
    • This will also end the unhealthy and intense competition going on even among public sector banks as of now.
    • In the global market, the Indian banks will gain greater recognition and higher rating.
    • The volume of inter-bank transactions will come down, resulting in saving of considerable time in clearing and reconciliation of accounts.
    • This will also reduce unnecessary interference by board members in day to day affairs of the banks.
    • After mergers, bargaining strength of bank staff will become more and visible.
    • Bank staff may look forward to better wages and service conditions in future.
    • The wide disparities between the staff of various banks in their service conditions and monetary benefits will narrow down.
  • Economy:
    • Reduction in the cost of doing business.
    • Technical inefficiency reduces.
    • The size of each business entity after merger is expected to add strength to the Indian Banking System in general and Public Sector Banks in particular.
    • After merger, Indian Banks can manage their liquidity – short term as well as long term – position comfortably.
    • Synergy of operations and scale of economy in the new entity will result in savings and higher profits.
    • A great number of posts of CMD, ED, GM and Zonal Managers will be abolished, resulting in savings of crores of Rupee.
    • Customers will have access to fewer banks offering them wider range of products at a lower cost.
    • Mergers can diversify risk management.
  • Government
    • The burden on the central government to recapitalize the public sector banks again and again will come down substantially.
    • This will also help in meeting more stringent norms under BASEL III, especially capital adequacy ratio.
    • From regulatory perspective, monitoring and control of a smaller number of banks will be easier after mergers.

Concerns associated with merger:

  • Problems to adjust top leadership in institutions and the unions.
  • Mergers will result in shifting/closure of many ATMs, Branches and controlling offices, as it is not prudent and economical to keep so many banks concentrated in several pockets, notably in urban and metropolitan centres.
  • Mergers will result in immediate job losseson account of large number of people taking VRS on one side and slow down or stoppage of further recruitment on the other. This will worsen the unemployment situation further and may create law and order problems and social disturbances.
  • Mergers will result in clash of different organizational cultures. Conflicts will arise in the area of systems and processes too.
  • When a big bank books huge loss or crumbles, there will be a big jolt in the entire banking industry. Its repercussions will be felt everywhere.

Way Forward

  • Dual regulation by the Ministry of Finance and RBI on PSBs often results in paralysis in decision making – which makes consolidation of banks a redundant measure if they are not given power to act swiftly, as pointed by PJ Nayak.
  • Governance of public banks needs to be improved before making any significant change in any emerging architecture.
  • Bigger banks offer more resilience to the banking sector but overlooking bigger red flags like strong credit appraisal and risk control system would do little help in creating robust banks.
  • Therefore due focus on ensuring strong foundation of PSBs is important.

Conclusion

Merger is a good idea. However, this should be carried out with right banks for the right reasons. Merger is also tricky given the huge challenges banks face, including the bad loan problem that has plunged many public sector banks in an unprecedented crisis.

 

 


General Studies – 4


 

Topic: Contributions of moral thinkers and philosophers from India and world.

7. Examine the relevance of Rawls’ theory of justice in the present day. (150 word)

Difficulty level: Tough

Reference: plato.stanford.edu

Why the question:

The question is part of the static syllabus of General studies paper – 4 and part of ‘Philosophical Mondays’ in Mission-2022 Secure.

Key Demand of the question:

Using the metaphor of the moral compass to describe conscience, our inner sense of right and wrong offers a framework to guide our actions.

Directive:

Elaborate – Give a detailed account as to how and why it occurred, or what is the particular context. You must be defining key terms where ever appropriate, and substantiate with relevant associated facts.

Structure of the answer:

Introduction:

Start by explaining Rawls’ theory of justice.

Body:

First, explain in detail the various components of Rawl’s theory of justice.

Next, use examples to cite its contemporary relevance. Mention in what ways it is relevant and what ways it can be applied to present day situations in India and across the world.

Conclusion:

Conclude with a balanced way forward.

Introduction

John Rawls was an American moral and political philosopher in the liberal tradition. Rawls’s theory of justice revolves around the adaptation of two fundamental principles of justice which would, in turn, guarantee a just and morally acceptable society. The first principle guarantees the right of each person to have the most extensive basic liberty compatible with the liberty of others. The second principle states that social and economic positions are to be to everyone’s advantage and open to all.

Body:

Relevance of John Rawls theory of Justice

  • Rawls’ theory of justice as fairness encompasses a central contention that principles of justice is essential to the structure of a constitutional democracy. It must be viewed as political in contrast to more comprehensive moral, philosophical or religious doctrines.
  • His concept of justice gives emphasis to fairness, it must be fair to all, to the most talented as well as the most disadvantaged section.
  • Rawls uses the idea of a veil of ignorance to argue that fair and just distribution can be defended on rational grounds. He says that if a person keeps herself/himself under the ‘veil of ignorance’ then s/he would come up with the just distribution, fair laws and policies that would affect the whole society.
  • Rawls further says that the institutions must be fair or just. They must keep themselves above parochial interests. In many societies there are such institutions which have been created to serve group’s interests and such institutions cannot serve the interests of justice.
  • The contents of the “social primary goods” specified by Rawls are of particular importance, for the fair distribution of them, namely, liberty and opportunity, income and wealth and basis of self-respect in a society will undoubtedly help to achieve the much-needed social justice.
  • For example: The recent 10% reservation for the Economically Weaker Sections in education and jobs; reservations for SC/ST etc.
  • Another important aspect of his theory is that while laying emphasis on the equal distribution of the “social primary goods”, he envisages “an unequal distribution” of the “social primary goods” if such unequal distribution is “to the advantage of the least favoured”.
  • Example: progressive tax system in India, multi-tiered GST system, Philanthropy.
  • In envisaging such “unequal distribution” of the social primary goods to benefit the “least favoured” in the society.

Relevance of John Rawls in India

  • Reservation Issue: That whether demand some high castes to get reservation is valid or not. We can also look any amendment in present reservation policy according to it.
  • Environment to maintain balance between biodiversity and development. For example, increase in area of eco-sensitive zones.
  • Economy issues like increase in FDI, monetary policy or even present demonetization issue can be examined though spectrum Rawls’ concept.
  • Traditions: We can also examine and introspect various traditional practices and customs like Jallikattu, entry of women in certain temples or religious places etc.

Conclusion

Rawls’ works have influenced famous thinkers like Amartya Sen, Thomas Nagel, Thomas Pogge etc. The concept of Social and Economic Justice is adopted in our Constitution in the form of Directive Principles of State Policy.

Value addition:

Basic principles of his theory:

  • Rawls suggests two basic principles of justice.
  • Principle of Equal Liberty:
    • It means each person is to have an equal right to the most extensive basic liberty compatible with a similar liberty for others.
    • Examples: freedom of thought, speech and expression, universal suffrage, freedom from arbitrary arrest and seizure, the right to hold public office etc.
  • Difference Principle: There are 2 parts under this
    • Fair equality of opportunity: It postulates that public policies are reasonably expected to be to everyone’s advantage and public position and offices are open to all.
    • Difference principle: It justifies only those social and economic inequalities that maximize benefits to the least advantaged citizens.
    • These principles provide an operating logic for the determination of public interest by the decision- makers.

 


  • Join our Official Telegram Channel HERE for Motivation and Fast Updates
  • Subscribe to our YouTube Channel HERE to watch Motivational and New analysis videos