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[Mission 2022] Insights SECURE SYNOPSIS: 12 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


1. The socio-religious reform movement took a new orientation under Jyotiba Phule and Savitri Bai Phule as it became more inclusive and empowering. Elaborate. (150 words, 10 marks)


Jyotirao Govindrao Phule was an Indian social activist, thinker, anti-caste social reformer and writer from Maharashtra. His work extended to many fields, including eradication of untouchability and the caste system, and women’s emancipation.

Savitribai was born on January 3, 1831, in Naigaon village in Maharashtra. She is formally recognised as India’s first female teacher. Savitribai played a pivotal role in women’s empowerment with the support of her husband, Jyotiba Phule.

Maharashtra Governor Bhagat Singh Koshyari has recently received flak for his remarks on the social reformist couple Jyotirao and Savitribai Phule.


Contributions of JyotibaRao and Savitribai in social reforms

Social reforms and key contributions:

  • His work is related mainly to eradication of untouchability and caste system, emancipation and empowerment of women, reform of Hindu family life.
  • Along with his wife, Savitribai Phule, he is regarded as pioneers of women’s education in India.
  • The couples were the first native Indians to open the first indigenously-run school for girls in India in August 1848 at Pune in Maharashtra.
  • Later, the Phules started schools for children from the then untouchable castes such as Mahar and Mang.
  • Afterwards, Jyotiba and Savitribai opened a night school for women and the children of those from the working-class community.
  • They set up 52 free hostels for poor students across Maharashtra.
  • In 1863, he opened a home for pregnant Brahmin widows to give birth in a safe and secure place.
  • He opened an orphanage home to avoid infanticide. In this regard, he is believed to be the first Hindu to start an orphanage for the unfortunate children.
  • In 1868, Jyotirao decided to construct a common bathing tank outside his house to exhibit his embracing attitude towards all human beings and wished to dine with everyone, regardless of their caste.
  • In 1873, Phule founded the Satyashodhak Samaj, or the Society of Seekers of Truth, for the rights of depressed classes, to denounce the caste system and to spread rational thinking.
  • Savitribai, a true feminist, set up Mahila Seva Mandali to raise awareness among women against child marriage, female foeticide and the sati system.
  • At the time, widows were often sexually exploited and pregnant widows suffered even more physical abuse and humiliation. To address this problem, the couple set up ‘Balyata Pratibandak Gruha’,a childcare centre for the protection of pregnant widows and rape victims.
  • Savitribai also encouraged the adoption of children borne out of such sexual abuse. She opened an ashram for widows and orphans.
  • She organised a boycott by barbers against the tradition of head tonsuring of widows.
  • Savitribai appealed to women to come out of the caste barriers and encouraged them to sit together at her meetings.


Complete women’s empowerment is still a distant dream in India. While celebrating her legacy, we must also remember the contributions of her husband Jyotiba, who dreamt of equity for women and people of lower castes.


2. Start-ups can act as an agent of change by solving issues faced by the Indian society. Discuss. (150 words, 10 marks)


A startup defined as an entity that is headquartered in India, which was opened less than 10 years ago, and has an annual turnover less than ₹100 crore. Today Startups are being widely recognised as important engines for growth and jobs generation. Through innovation and scalable technology, startups can generate impactful solutions, and thereby act as vehicles for socio-economic development and transformation.



  • Recently, Prime Minister of India announced that the country will celebrate January 16 as National Startup Day, as he termed startups the “backbone” of new India and the engine that will power the nation’s economic growth in the run up to the 100th year of Independence.
  • Today, India is the third largest start-up ecosystem globally, by number of start-ups, with more than 15,000 start-ups established in 2020, up from 5000 in 2010.

Start-ups can act as an agent of change by solving issues faced by the Indian society

  • Healthcare
    • Finding genuine doctors is still unbelievably tough in India
    • Patient records are either maintained in fat files or if they are online, they are often not accessible or understandable.
    • Doctors do not usually have the time to go through all the reports and this may lead to a compromise on the health front.
    • Health-based startups can address a lot of issues plaguing instant access to healthcare in India.
  • Easy access to quality education
    • Higher education in India was earlier limited to only a handful of people who could afford training and coaching.
    • Coaching institutes and classes were meant only for some.
    • Today, despite increase in incomes, access to quality learning is still limited to what is available to students around.
    • Ed-tech startups can thus champion the cause of access, quality, and performance.
  • Employment
    • The Indian start-up ecosystem is nothing short of a revolution with $106-billion worth of value-creation by 44 unicorns, in turn creating 4 million direct and indirect jobs.
    • Ancillary industries rise up creating more avenues of innovation, growth and employment.
  • Sanitation
    • Lack of sanitation is a major problem in developing countries like India.
    • Around 2.6 billion people or 41 percent of the world’s population until now does not have access to basic sanitation.
    • It is imperative to invest in solutions by offering different sanitation products and services at appropriate prices.
  • Waste management
    • Urban areas of India generate 1,88,500 tonnes of municipal solid waste (68.8 million tonnes per year), and waste generation increases by 50 percent every decade.
    • More than 80 percent of this waste reaches open dumpsites causing public health issues, environmental degradation, and resultant climate change.
    • Plastic and e-waste form the major chunk of this waste, with minimal facilities to take care of such environment degrading substances.
    • Fresh and innovative ideas in consonance with the ambitious Swachh Bharat Abhiyan are required to solve this problem, which otherwise can have drastic repercussions in the near future.
  • Pollution
    • Pollution in India is a definite offshoot of many other environmental problems be it air, water, land, or noise.
    • New technologies have the potential to revolutionise the way air pollution research and policy are conducted, with a more efficient people-focussed approach.
  • Public Transport
    • State-sponsored mass transit systems are unable to keep pace with people, private enterprises like Ola, Uber haven’t been able to do enough, and dated regulations have not allowed them to do enough to try to fill the breach.
    • There is a massive need for public transport options because not everyone can afford these cab services, and private enterprises can fill the breach left by state-sponsored infrastructure.
  • Agriculture
    • An Ernst & Young 2020 study pegs the Indian agritech market potential at $24 billion by 2025, of which only 1 per cent has been captured so far.
    • There are glaring gaps in the supply chain management and also poor last-mile connectivity especially at grass-roots level as well lack of investments to drive the businesses.
  • Safety of women
    • Crimes against women have only shown an increase in the last five years.
    • Safety is definitely one of the growing concerns in our country, particularly with regard to women.
    • Technology and access to it can solve many issues that women face in their day to day lives.
  • Policing and Crime Prevention
    • In India, the crime rates are skyrocketing, with the thieves and perpetrators using technology to subvert detection and crime-redressal.
    • Policing is an arduous 24/7 job and has many challenges.
    • Smart apps to help crime prevention, apps to help report crimes, technology to speedily redress crimes etc., are also urgent problems in India that startups can handle with elan.


Startups in India are witnessing a golden chapter in the history of Indian entrepreneurship. However, still the Indian government has a crucial role to play in positioning India as the Tech Garage of the World. It should act as a catalyst, and bring together the synergies of the private sector with the aim of innovating for India and the world. Recognising the startup sector with a dedicated observational day will definitely help build awareness about the sector and also draw great talent and investment into this sector.


3. Water stress causes deterioration of fresh water resources in terms of quantity as well as quality. Suggest steps to overcome water stress in the country. (150 words, 10 marks)


Water stress occurs when the demand for water exceeds the available amount during a certain period or when poor quality restricts its use. When per capita availability of water is below 1700 m3/year, water availability is termed as “stressed”.


Water stress causes deterioration of fresh water resources in terms of quantity as well as quality

  • India has 4 % of the world’s freshwater which has to cater to 17 % of the world’s population.
  • Approximately 600 million people or roughly around 45 % of the population in India is facing high to severe water stress.
  • As per the report, 21 Indian cities will run out of their main source of water i.e. groundwater by 2020.
  • Nearly 40 % of the population will have absolutely no access to drinking water by 2030 and 6 % of India’s GDP will be lost by 2050 due to the water crisis.
  • As per NITI Aayog report (CWMI) released in June 2019, India is facing the worst-ever water crisis in history.
  • A disastrous water crisis has been creeping up on us for years. Water tables have declined precipitously, even by thousands of feet in some parts of Punjab, Haryana and Andhra Pradesh. Tanks and wells have gone dry.
  • Some rivers have shrunk while other smaller ones have completely dried up.
  • Water rationing is routine in many urban areas, while in many villages women are trudging longer distances to fetch water.
  • A recent report mentions that over 70% of surface irrigation water is being simply wasted, nationally.
  • Not only farmers are affected by the water crisis, urban dwellers in cities and towns across India are also facing a never seen before drinking water scarcity.
  • In India, there are conflicts between Karnataka and Tamil Nadu over sharing of Cauvery waters, between Gujarat and Madhya Pradesh over sharing of Narmada waters, between Andhra Pradesh and Telangana over sharing of Krishna waters, etc.

Measures to overcome water stress in the country

Seeing India’s looming water crisis through the locus of ‘urban’ and ‘rural’ not only allows a better grasp of the causative factors but also enables a stronger grip on the strategies to be deployed to reverse the water crisis.

  • Urban water resource management
  • Ground water management is of utmost importance in urban areas where 50% water is drawn from ground. E.g.: Encroachment of flood plains, ground water recharge are areas to work with.
  • Loss of green cover in urban areas and heat island effect are reasons for depleting water sources. e.g.: Urban forests needs to be created like in Aarey, Mumbai.
  • The Ministry of Water Resources must reconfigure its relationship with other Ministries and Departments (Urban Development, Local Self-Government and Environment).
  • Enhanced integration and coordination are needed through effective land and water zoning regulations that protect urban water bodies, groundwater sources, wetlands and green cover while simultaneously working to enhance waste water recycling and water recharge activities targeting aquifers and wells through rainwater harvesting.
  • Rural water resource management
    • Water and food security: At the sectoral level, the Ministries and Departments of water resources must coordinate efforts with their counterparts in agriculture, the environment and rural development for greater convergence to achieve water and food security.
      • g.: Water guzzler crops like paddy and wheat in Punjab have turned the soil saline and depleted ground water.
    • Whole of government approach: At the disciplinary level, governance and management should increasingly interact and draw from the expertise of fields such as hydrology (watershed sustainability), hydrogeology (aquifer mapping and recharge) and agriculture sciences (water-sensitive crop choices and soil health).
    • Surface water management: Again, the importance given to groundwater conservation should not ignore surface water conservation including the many rivers and lakes which are in a critical and dying state due to encroachment, pollution, over-abstraction and obstruction of water flow by dams.

Way Forward

  • Effective land and water zoning regulations would protect urban water bodies, groundwater sources, wetlands and green cover.
  • Enhance waste water recycling and water recharge activities targeting aquifers and wells through rainwater harvesting.
  • Governance and management should increasingly interact and draw from the expertise of fields such as hydrology (watershed sustainability), hydrogeology (aquifer mapping and recharge) and agriculture sciences (water-sensitive crop choices and soil health).
  • The importance given to groundwater conservation should not ignore surface water conservation including the rivers and lakes which are in a critical state due to encroachment and pollution.
  • The Ministry of Jal Shakti must focus on protecting and conserving water resources on the one hand and minimising and enhancing efficiency of water usage on the other.

General Studies – 2


4. Throw light on the problems faced by the elderly population. Examine the various welfare measures available for the elderly. Do you think that elderly homes should be formally regulated? (150 words, 10 marks)



In 2009, there were 88 million elderly people in India. By 2050, this figure is expected to soar over 320 million. Between 2000 and 2050 the overall population of the country is anticipated to grow by 60 per cent whereas population of people of age 60 years and above would shoot by 360 per cent. The Maintenance and Welfare of Parents and Senior Citizens (Amendment) Bill, 2019 was cleared by the Cabinet recently


Problems of elderly population in India:

  • Isolation and loneliness among the elderly is rising.
    • Nearly half the elderly felt sad and neglected, 36 per cent felt they were a burden to the family.
  • Rise in age-related chronic illness:
    • Heart disease, cancer, diabetes, and other chronic diseases will cause more death and illness worldwide than infectious or parasitic diseases over the next few years.
    • In developed nations, this shift has already happened. Dementia and Alzheimer’s disease are expected to almost double every 20 years, as life expectancy increases.
  • Special challenges for less developed nations:
    • Poorer countries will carry the double burden of caring for older people with chronic diseases, as well as dealing with continued high rates of infectious diseases.
  • Increasing need for long-term care:
    • The number of sick and frail elderly needing affordable nursing homes or assisted living centers will likely increase.
  • Rise in the Health care costs:
    • As older people stop working and their health care needs increase, governments could be overwhelmed by unprecedented costs.
    • While there may be cause for optimism about population aging in some countries, the Pew survey reveals that residents of countries such as Japan, Italy, and Russia are the least confident about achieving an adequate standard of living in old age.
  • Elderly women issues:
    • They face life time of gender-based discrimination. The gendered nature of ageing is such that universally, women tend to live longer than men.
    • In the advanced age of 80 years and above, widowhood dominates the status of women with 71 per cent of women and only 29 per cent of men having lost their spouse.
    • Social mores inhibit women from re-marrying, resulting in an increased likelihood of women ending up alone.
    • The life of a widow is riddled with stringent moral codes, with integral rights relinquished and liberties circumvented.
    • Social bias often results in unjust allocation of resources, neglect, abuse, exploitation, gender-based violence, lack of access to basic services and prevention of ownership of assets.
    • Ageing women are more likely to get excluded from social security schemes due to lower literacy and awareness levels.
  • Ageing individual is expected to need health care for a longer period of time than previous generations but elderly care for a shorter period of time

Various welfare measures available for the elderly

  • Pradhan Mantri Vaya Vandana Yojana
  • Varishtha Pension Bima Yojana (VPBY)
  • Rashtriya Vayoshri Yojana (RVY)
  • Vayoshreshtha Samman
  • Indira Gandhi National Old Age Pension Scheme (IGNOAPS)
  • Integrated Programme for Older Persons (IPOP)

Yes, Elderly homes should be formally regulated

  • The quality of service varies as these homes lack regulatory oversight.
  • Many homes lack clearly established standard operating procedures, and their referral paths to health care are informal.
  • There is an urgent need to understand the quality of life at such institutions, including the impact of these homes on the mental health of their residents.
  • Many homes lack accessible and elderly-friendly structures that allow them to operate safely, thereby reduce their mobility.
  • This reduces their sociability, their sense of independence and well-being — all leading up to mental health issues and depression.
  • Crucial thought will be the need for robust public policy to support homes for the elderly.

Way forward

  • The success of the COVID-19 vaccination strategy gives hope, which had a seniors-first approach.
  • India should reimagine its entire health-care policy with an elderly prioritised approach.
  • As senior citizens require the most diverse array of health-care services, the creation of adequate services for them will benefit all other age-groups.
  • India needs to rapidly increase its public health-care spending.
  • Creation of well-equipped and staffed medical care facilities and home health-care and rehabilitation services.
  • We need to accelerate implementation of programmes such as the National Programme for Health Care of the Elderly (NPHCE).
  • The Ayushman Bharat and PM-JAY ecosystems need to be further expanded.
  • The National Digital Health Mission has tremendous potential to expand medical consultations into the interiors of the country. However, this requires a digital literacy campaign for senior citizens.
  • Health institutions will also need to offer a comprehensive set of packages that are tailored for the elderly — not piecemeal solutions for diabetes, cardiology or cancer.
  • These essential steps will help to convert elders into a massive resource for socio-cultural and economic development.


5. ‘India Digital Ecosystem Architecture (IndEA) 2.0’ represents a paradigm shift in the digital governance of the country which can lead to better citizen centric service delivery. Discuss. (150 words, 10 marks)


The digital ecosystem is defined in the document as “a distributed, adaptive, and open socio-technical system with properties of self-organization, scalability, and sustainability.” Digital governance is leveraging the technology to provide citizen-centric services.

Web 3.0 is the most-hyped technology term in recent times. A blueprint called the ‘India Digital Ecosystem Architecture (IndEA) 2.0, was released recently by the ministry of electronics and information technology (MeitY). It outlines how the government should architect its digital infrastructure for the Web 3.0 era.


IndEA 2.0

  • India Digital Ecosystem Architecture 2.0 is a framework that enables Governments and private sector enterprises to design IT architectures that can span beyond their organizational boundaries and enable delivery of holistic and integrated services to the customers.
  • While InDEA 2.0 builds upon the principles and models recommended in India Enterprise Architecture (IndEA 1.0 – 2018), it adopts a radically different approach to architecture development.
    • It addresses the architectural needs of an ecosystem rather than of an enterprise which was the focus of its predecessor.
    • InDEA 2.0 is a framework that promotes the evolution of digital ecosystems.
    • It consists of a set of principles and architectural patterns that inform, guide, and enable the development of large digital systems, with a focus on the public sector.

Paradigm shift in service delivery

  • In addition to the general philosophy of embracing decentralized technology, the report has some specific features that are fresh and noteworthy.
    • First, it emphasizes the need for a federated architecture approach to preventing risks that arise with large scale data centralization, such as hacking of data ‘honeypots’ and surveillance.
    • Second, it proposed the concept of ‘federated identities’ in order to optimize the number of IDs a citizen needs to have.
      • While the details of this need to be understood, the idea that citizens can choose a limited set of IDs that they trust to use for various use cases, is a promising one.
    • Third, it recognizes that building capacity within government for a new generation of GovTech requires new competencies and proposes a module-based approach to upgrade skills and change mindsets across government.

Way forward

  • While it is a landmark document, the approach outlined in IndEA 2.0 needs deeper thought on some of the ‘non-tech’ elements of governance and community engagement.
  • The report talks of participatory design, but this needs to be built out: how might the GovTech systems of the future be designed with citizens rather than for citizens?
  • In a similar vein, while the report recognizes the importance of protecting data, the primary framework to enable this is user ‘consent’, which needs holistic improvement.
    • Going beyond consent, for example, promoting nudges like privacy ‘star ratings’ and guidelines on real-world implementations of concepts like ‘privacy-by-design’ would help.
  • Unlike the decentralized governance approaches of Web 3.0 like DAOs, IndEA 2.0 envisages that a wing of the government, or a Special Purpose Vehicle (SPV) on the lines of UIDAI (Aadhaar) or NPCI (UPI) should be responsible for handling the technical, domain, legal, commercial and program management aspects of IndEA 2.0.
    • Such an approach is welcome, and getting this anchor ‘governance’ institution right – as a professionally run, arms-length and accountable institution – will be critical for the next phase of GovTech to succeed.
  • The “Good Digital Public Infrastructure Principles” listed by CoDevelop and MeitY’s white paper on National Open Digital Ecosystems (NODEs) provide useful markers for this.
    • Examples of NODEs in India include Aadhaar (or the India Stack project), Unified Payments Interface etc.
  • In short, taking the blueprint from principles to implementation will require more specific and actionable guidance.


6. India and Bangladesh’s bond stresses far beyond the calculus of strategic consideration, and it is rooted in close people-to-people connectivity. Analyse. (150 words, 10 marks)


On 16 December 1971, Pakistani forces surrendered to Indian forces and Bangladesh was liberated. This week, Indian and Bangladeshi diplomats have jointly celebrated the 50th anniversary, and Indian leaders have praised Bangladesh’s development record.

India and Bangladesh share bonds of history, language, culture, and multitude of other commonalities. The excellent bilateral ties reflect an all-encompassing partnership based on sovereignty, equality, trust, and understanding that goes far beyond a strategic partnership.


Indo-Bangla relations

  • Liberation war: Bangladeshis are grateful for Indian support and sacrifices in 1971.
  • Cultural ties: Triveni of events of epochal significance the golden jubilee of the Liberation War of Bangladesh, the birth centenary of Bangabandhu Sheikh Mujibur Rahman and the 50th anniversary of our diplomatic ties. India and Bangladesh are celebrating it jointly.
  • Development partner: Bangladesh is the biggest development partner of India today. India has extended 3 Lines of Credits (LOC) to Bangladesh in the last 8 years amounting to US$ 8 billion for development of infrastructure in various sectors including roads, railways, shipping and ports.
  • Amicable relations: The year 2020, despite onset of the COVID-19 pandemic, witnessed intense high level engagements at political and official levels beginning with the exchange of New Year greetings between Prime Minister Modi and Prime Minister Sheikh Hasina on 01 January 2020.
  • Connectivity: Both the governments are undertaking various measures to restore the pre-1965 rail links and other connectivity links that existed between India and Bangladesh.
    • The two Prime Ministers jointly inaugurated the newly restored railway link between Chilahati (Bangladesh) and Haldibari (India) on 17 December 2020.
    • To enhance people to people contacts, the frequency of two passenger trains, i.e., Maitree Express and Bandhan Express was increased from 4 days a week to 5 days a week and from one day a week to two days a week respectively from February 2020.
  • Trade: Bangladesh is India’s biggest trade partner in South Asia and India is the second biggest trade partner of Bangladesh.
    • Bilateral trade between India and Bangladesh has grown steadily over the last decade and the exports of Bangladesh have tripled over the last decade to cross $1 bn in 2018-19.

Significance of relations today

  • Security of North East: A friendly Bangladesh can ensure that its soil is not used for anti-India activities. Bangladesh’s action resulted in the arrest of many top leaders of the NE insurgent groups like United Liberation Front of Assam & National Democratic Front of Bodoland.
  • Connectivity of North East: The north eastern states are land-locked & have shorter route to sea through Bangladesh. Transit agreement with Bangladesh will spur socio-economic development and integration of North-East India.
  • Bridge to Southeast Asia: Bangladesh is a natural pillar of Act East policy. It can act as a ‘bridge’ to economic and political linkages with South East Asia and beyond. Bangladesh is important component of BIMSTEC and BBIN initiatives.
  • Strengthening South Asia as a regional power: Bangladesh is important for strengthening of SAARC, for promoting cooperation among its member nations to economic growth and securing strategic interests.
  • Securing sea lines of communication: Bangladesh is strategically placed nearby important sea lanes. It can play significant role in containing piracy in the Indian Ocean.
  • Fighting terrorism and deradicalization: Stable, open and tolerant Bangladesh helps India in stopping extremists from flourishing there and also in cooperation in deradicalization efforts, sharing intelligence, and other counter-terrorism efforts.
  • Balancing China: A neutral Bangladesh would ensure containment of an assertive China in this region, and help in countering it’s string of pearls policy.

Challenges in bilateral relations

  • River disputes: India shares 54 trans-boundary rivers with Bangladesh. Some of the major disputes include: Teesta River water sharing issue, Tipaimukh Hydro-Electric Power Project on the Barak River, Ganga river dispute etc.
  • Illegal immigrants: The National Register of Citizens (NRC) has left out 1.9 million Assamese from the list with a group labelled as “illegal immigrants from Bangladesh” living in Assam post-1971.
    • Bangladesh remains firm in its stance that no migrants travelled to Assam illegally during the 1971 war of independence and that the controversial NRC risks hurting relations.
  • Border Management: The Indo-Bangladesh border is of porous nature which provides pathway for smuggling, trafficking in arms, drugs and people and cattle.
  • Delay in project execution: As of 2017, India had extended three lines of credit worth approximately $7.4 billion. However, less than 10% of the cumulative commitments have been disbursed so far.
  • China factor: China sees Bangladesh as strategic focal point to make inroads into South Asia as an alternative to India.
  • Increasing radicalisation: Presence of groups like Harkat-alJihad-al-Islami (HUJI), Jamaat-e-Islami, and HUJI-B fuel Anti-India sentiments in Bangladesh. Their propaganda could spill across border.


Deepening relationship with Bangladesh has become a necessity in the face of shifting geo-economics. Bangladesh, with its growing economic success, and with its 8 percent growth rate provides a vital partnership in the region. There is scope for India-Bangladesh ties to move to the next level, based on cooperation, coordination and consolidation as Prime Minister has termed the present period of relationship between the two countries as ‘Sonali Adhyay’.


General Studies – 3


7. Elaborate upon the functions of Reserve Bank of India (RBI). Why is RBI known as the ‘lender of the last resort’? (150 words, 10 marks)


The Reserve Bank of India, India’s Central bank, was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India. The Reserve Bank’s affairs are governed by a central board of directors. The board is appointed by the Government of India in keeping with the Reserve Bank of India Act.


Functions of Reserve Bank of India (RBI)

  • Monetary Authority
    • Formulates, implements and monitors the monetary policy.
    • Objective: maintaining price stability while keeping in mind the objective of growth.
  • Regulator and supervisor of the financial system
    • Prescribes broad parameters of banking operations within which the country’s banking and financial system functions.
    • Objective: maintain public confidence in the system, protect depositors’ interest and provide cost-effective banking services to the public.
  • Manager of Foreign Exchange
    • Manages the Foreign Exchange Management Act, 1999.
    • Objective: to facilitate external trade and payment and promote orderly development and maintenance of foreign exchange market in India.
  • Issuer of currency
    • Issues and exchanges or destroys currency and coins not fit for circulation.
    • Objective: to give the public adequate quantity of supplies of currency notes and coins and in good quality.
  • Developmental role
    • Performs a wide range of promotional functions to support national objectives.
  • Regulator and Supervisor of Payment and Settlement Systems
    • Introduces and upgrades safe and efficient modes of payment systems in the country to meet the requirements of the public at large.
    • Objective: maintain public confidence in payment and settlement system
  • Related Functions
    • Banker to the Government: performs merchant banking function for the central and the state governments; also acts as their banker.
    • Banker to banks: maintains banking accounts of all scheduled banks.
  • Financial Inclusion
    • The Reserve Bank has selected a bank led model for financial inclusion in India. RBI has undertaken a series of policy measures such as no frills accounts, adoption of technology like e-Kuber etc.

RBI is known as the ‘lender of the last resort’

  • Under lender of last resort (LoLR) facility, the central bank provides emergency money or liquidity to the bank when the latter faces financial stringency.
  • When the central bank extends financial help, the bank can escape from the liquidity crisis.
  • Thus, LoLR is a financial safety net provided by the central bank to commercial banks.
  • LoLR and the reserve holding have empowered central banks to administer regulatory and supervisory measures on the banking system.
  • Lender of last resort’ (LoLR) thus, is an exclusive function of a central bank, whereby it lends money to support financial institution facing temporary liquidity stress after exhausting recourse to the market and whose failure is likely to have systemic implications.


RBI is one of the most powerful Central Banks of the world, both in terms of its statutory powers and the functions it performs. However, there are many criticisms concerning its operational independence. For a healthy economy, the Fiscal Policy by the Government and Monetary policy by the Central Bank should be in tandem.


8. Explain the concept of open market operations (OMO). What is its impact on various macroeconomic parameters? (150 words, 10 marks)


Open market operations (OMO) is the sale and purchase of government securities and treasury bills by RBI or the central bank of the country. The objective of OMO is to regulate the money supply in the economy. It is one of the quantitative monetary policy tools. Commercial banks and financial institutions participate in the Open Market Operations (OMO).


About OMO

  • Open market operations are the major instrument of monetary control in industrial countries and are becoming important to developing countries and economies in transition.
  • Open market operations allow central banks great flexibility in the timing and volume of monetary operations at their own initiative, encourage an impersonal, business like relationship with participants in the marketplace, and provide a means of avoiding the inefficiencies of direct controls.
  • There are two types of open market operations namely Outright OMO and Repo.

Impact on various macroeconomic parameters

  • Expansionary policy
    • During a recession or economic downturn, RBI will seek to expand the supply of money in the economy, with a goal of lowering the rate at which banks lend to each other overnight.
    • To do this, the RBI will purchase bonds from banks and other financial institutions and deposit payment into the accounts of the buyers.
    • This increases the amount of money that banks and financial institutions have on hand, and banks can use these funds to provide loans.
    • With more money on hand, banks will lower interest rates to entice consumers and businesses to borrow and invest, thereby stimulating the economy and employment.
  • Contractionary policy
    • RBI will undertake the opposite process when the economy is overheating and inflation is reaching the limit of its comfort zone.
    • When RBI sells bonds to the banks, it takes money out of the financial system, reducing the money supply.
    • This will cause interest rates to rise, discouraging individuals and businesses from borrowing and investing, while encouraging them to put their money in less productive investments such as interest-bearing savings accounts and certificates of deposit.
    • This has the effect of slowing inflation and economic growth.


The RBI performs Open Market Operations based on the macroeconomic scenario in the Indian economy. OMO has been a potent tool to manipulate the readily available liquidity in the economy which in turn have cascading effects on inflation, bond yields etc. RBI’s buying or selling of securities has ripple effects through the money supply, interest rates, economic growth, and employment.


9. Nanotechnology in medicine has a myriad of applications as well as it offers some exciting possibilities which can revolutionise modern medicine. Discuss. (150 words, 10 marks)


Nanotechnology is the science of materials at the molecular or subatomic level. It involves manipulation of particles smaller than 100 nanometres (one nanometre is one-billionth of a metre) and the technology involves developing materials or devices within that size — invisible to the human eye and often many hundred times thinner than the width of human hair. The physics and chemistry of materials are radically different when reduced to the nanoscale; they have different strengths, conductivity and reactivity, and exploiting this could revolutionise medicine.


The contributions of Nanotechnology in medicine:

  • Diagnostics and screening:
    • There is an urgent need in the developing world for better disease diagnosis, and nanotechnology offers a multitude of options for detecting disease.
    • Example: Fluorescent quantum dots could improve malaria diagnosis by targeting the blood cell’s inner membrane.
    • Similarly, carbon nanotubes, and other nanoparticles such as nanowires, have been used as biosensors to detect diseases such as HIV and cancer. Cancer biosensors can be made, for instance, by attaching nucleic acid probes to the ends of nanowires.
  • Drug delivery:
    • Nanotechnology could also revolutionise drug delivery by overcoming challenges such as how to sustain the release of drugs in the body and improving bioavailability — the amount of active ingredient per dose.
    • Some drugs can now be delivered through ‘nanovehicles’.
    • For example liposomes, which can deliver the drug payload by fusing with cell membranes, have been used to encapsulate HIV drugs such as stavudine and zidovudine in vehicles ranging from 120 to 200 nanometres in size.
    • Nanocapsules are pods that encapsulate drugs, which ensures the drugs are released more slowly and steadily in the body
    • Nanopharmaceuticals are rapidly emerging sub-branch that deals with the drug-loaded nanocarriers or nanomaterials that have unique physicochemical properties and minute size range for penetrating the Central Nervous system
    • Nano-pharmaceuticals can be tailored with functional modalities to achieve active targeting to the brain tissues.
    • The magic behind their therapeutic success is the reduced amount of dose and lesser toxicity, whereby localizing the therapeutic agent to the specific site.
  • Health monitoring:
    • Nanotubes and nanoparticles can be used as glucose, carbon dioxide and cholesterol sensors and for in-situ monitoring of homeostasis, the process by which the body maintains metabolic equilibrium.
    • In developing nations, the use of nanotechnology is also being explored in the fight against infectious diseases such as HIV and TB.
    • Nanoparticles could also be the basis for delivering an aerosol TB vaccine.
    • Needle-free, and therefore not requiring trained personnel to administer it, the vaccine is stable at room temperatures — important in rural areas that lack a reliable cold chain.
  • Vaccines:
    • Nanotechnology could herald a new era in immunisation by providing alternatives to injectable vaccines for diseases that affect the poor.
    • Injectable vaccines need to be administered by healthcare professionals, who may be scarce in developing countries, particularly in rural areas.
    • Vaccines also need reliable refrigeration along the delivery chain. Scientists are working on an aerosol TB vaccine.
    • They are also investigating a nanotechnology-based skin patch against West Nile Virus and Chikungunya virus.
  • Tissue growth and regenerative medicine:
    • Researches in tissue regenerative medicine aims in developing implants or scaffolds capable for delivering drugs, growth factors, hormones for tissue repair.
    • They provide sustained delivery of bioactive molecules to support survival, infiltration and proliferation of cells for tissue engineering.
    • The expected outcome of such treatment modality is to have complete tissue replacement and functional recovery.


Nanotechnology offers the ability to build large numbers of products that are incredibly powerful. Nanomedicines and nanodevices are in their early stages of development. The development processes are heavily intertwined with biotechnology and information technology, making its scope very wide. Nanotechnology based products are capable of overcoming the limitations of traditional methods. But, the major challenges are yet to prevail over its toxicity, environmental hazards, production cost and accessibility to the un-reachable at far-off areas.


10. What are the causes due to which Landslides occur? Suggest ways to mitigate the impact of landslides. (150 words, 10 marks)


A landslide is defined as the movement of a mass of rock, debris, or earth down a slope. Landslides are a type of “mass wasting,” which denotes any down-slope movement of soil and rock under the direct influence of gravity.

The Himalayas are highly prone to landslides during the monsoon season from June to September. The landslides usually occur in the altitudes between 500m to 3500m. Himalayan mountains are a result of complex geological, geomorphological and geohydrological factors.


The causes of the landslides can be studied under the following heads.

  • Natural Causes:
  • Earthquakes: Himalayas are situated at the convergent plate boundary zone of two continental plates viz. Indo-Australian plate in the south and Eurasian plate in the north. Thus geologically Himalayas are highly active seismic zone and Orogenesis is still in process. The earthquakes loosen the soil, which trigger the landslides.
  • Rainfall: Himalayan region receives quite heavy rainfall that leads to percolation of water in the lower layers, soil erosion, solifluction & landslides.
  • Slope: The steep slopes of Himalayan Mountains are one of the major reasons of frequent landslides than any other mountain ranges in India.
  • Structure: large portion of Himalayas is made up of sedimentary Rock which is more fragile.
  • Anthropogenic Causes:
  • Jhum Cultivation: popularly known as slash & burn type of cultivation practiced particularly in the Himalayan region.
  • Deforestation & Grazing: Himalayan region is centre of huge diversity when it comes to trees & this diversity has led to indiscriminate chopping of trees. The trees help in holding the soil together, curbing the erosion and landslides to maximum extent. Increased grazing has led to wiping out of many grassland areas causing soil erosion and easy prey for landslides.
  • Illegal mining & Industrial activities: The rampant commercial activities have huge impact on the sensitive zones of Himalayas. The constant blasting of rocks, increased vibrations due to drilling, boring etc. lead to loosening of rocks and soil particles in turn causing landslides when there is enough fluidity.
  • Infrastructure projects: Himalayas being source of many rivers has led to construction of multipurpose dam projects like Tehri. This has affected the already fragile Himalayas. There has been increase in number of developmental projects of highways, tunnels through hills which cause stress and sheer in the surrounding regions. Example: Chenani-Nashri tunnel project.
  • Unsustained Urbanization and Tourism: Increasing migration to cities has led to urban sprawl clearing the forest areas. Increased vehicular traffic, clearing of forest land to build infrastructure like roads, hotels etc. have affected the geography of the region.
  • Climate change: Global warming has led to quicker melting of snow and more percolation of water within the underlying surface of hill.

The impacts of the landslides are:

  • Every year, landslides in the region kill dozens of people and cause widespread damage to several villages such that they have now become almost unfit for habitation.
  • They create blockades in the road network and river system, which in turn, cause floods.
  • The terraced farm fields have been destroyed that cannot be easily renovated or made productive again.
  • The road network remains closed for long periods causing indescribable hardship to the villagers who get their basic supplies and provisions from the neighbouring areas.
  • Water sources are disrupted and choked by debris from landslides.
  • The river sediment load is increased considerably, causing irregular courses and frequent breaching of the banks- resulting into unexpected floods.
  • The water channels are affected from the up hillside due to which the villagers are devoid of water for irrigation purposes. This adversely affects agriculture production in the region.

The measures to control landslides are

  • Structural measures:
    • Stopping Jhum cultivation.
    • Store Excess water in catchments areas to reduce the fury of flash floods, recharge the ground water and improve the environment. Dig runoff collection ponds in the catchments.
    • Grow fuel / fodder trees in all of the common lands.
    • Plantation in barren areas, especially on slopes, with grass cover is an important component of integrated watershed management programme.
    • Grazing should be restricted. The grasses of industrial importance should also be planted so that there is some economic return to the farmers as well.
    • Use the surface vegetative cover to protect the land from raindrop’s beating action, bind the soil particles and decrease the velocity of flowing water.
    • Construction of engineering structures like buttress beams, retaining walls, geogids, nailings, anchors to stabilise the slopes.
  • Non-structural measures:
    • Environmental Impact Assessment of the infrastructure projects before commencing the work.
    • Declaration of eco-sensitive zones where mining and other industrial activities are banned. Eco-tourism should be promoted.
    • Hazard mapping of the region to identify the most vulnerable zones and take measures to safeguard it.
    • Local Disaster Management force for quick relief and safety of the people affected by landslides.
    • Teaching people about landslides & ways to mitigate.
    • Constructing a permanent assessment team comprising scientists & geologists for better mitigation and adaptation techniques.
    • Involving the local people for sustainable development of Himalayas


Himalayas are of vital importance to India in terms of climate, monsoon, water source and a natural barrier safeguarding the peninsula. The National Mission for Sustaining the Himalayan Ecosystem under NAPCC is a step ahead to address a variety of issues Himalayas is facing today.


Answer the following questions in 250 words:

General Studies – 1


11. Analyse the elements of continuity and change witnessed in the architecture of Mughals under Shahjahan. (250 words, 15 marks)


Mughal architecture, building style that flourished in northern and central India under the patronage of the Mughal emperors from the mid-16th to the late 17th century. The Mughal period marked a striking revival of Islamic architecture in northern India. Under the patronage of the Mughal emperors, Persian, Turkish, Indian, and various provincial styles were fused to produce works of unusual quality and refinement. Mughal architecture reached its apex during the reign of Shah Jahan.


Shah Jahan and architecture

  • Shah Jahan was one of the greatest patron of architecture and his buildings are unmatched in exquisite beauty of form.
  • He is rightly called ‘the prince of builders’ as the Mughal architecture reached its zenith under his reign.
  • He immortalized himself as he built the Taj Mahal in the memory of his late wife, Mumtaz Mahal.
  • He built Shahjahanabad, the 7th city of Delhi, today is known as Old Delhi.
  • His period in specific came to be known as the golden period of Indian architecture.

Elements of continuity during Shah Jahan’s rule:

  • Shah Jahan’s buildings also display a synthesis of Indian and foreign architectural style i.e. Indo-Sarcenic style.
  • The employment of calligraphy, pietra-dura works, foreshortening method, Charbagh style gardens, and the usage of water in the premises for ornamentation were all hallmarks of Mughal architecture which continued in Shah Jahan’s time too.

Elements of change during Shah Jahan’s rule:

  • Shah Jahan’s buildings have a great variety—cities, forts, gardens, mosques and palaces
  • He made extensive use of white marble as opposed to red sandstone which was preferred by his predecessors. E.g.: Tajmahal in Agra
  • The decorative art of inlaying achieved distinction with the introduction of semiprecious stones as inlay material, called pietra dura.
  • He also built the Jama Masjid in Delhi, Moti Masjid in the Agra Fort, and the Sheesh Mahal in the Lahore Fort brilliantly using pietra dura and complex mirror work.
  • He introduced the bulbous domes and convoluted arches in the buildings. E.g.: Tajmahal in Agra
  • The employment of calligraphy, pietra-dura works, foreshortening method, Charbagh style gardens, and the usage of water in the premises for ornamentation were all hallmarks of Mughal architecture. Apart from that, the Taj Mahal has several distinctive features:
    • The jaali work in Taj Mahal is lace-like and incredibly exquisite;
    • The marble carvings were low relief.
  • The buildings during his time have no parallel in symmetry of design and are unsurpassed in grandeur.
  • Aside from large-scale structures, one of his outstanding works was the Peacock Throne, which is considered one of the finest examples of metalwork during this time period.


Thus, during Shah Jahan’s reign, architecture reached its highest water mark in India. Shah Jahan’s buildings combine firmness and vastness with beauty and delicacy. As observed by the noted art critic Percy Brown, “As it was the proud statement of Augustus that he found Rome built of bricks and left it of marble, similarly Shah Jahan had found the Mughal cities of stones, he left them of marble”.


12. Crimean Peninsula has been a source of turmoil in European politics right since the nineteenth century. In the light of this statement, examine the impact of Crimean war (1853-1856) on Europe. (250 words, 15 marks)


The Crimean War which had begun in October 1853 lasted eighteen months. It was fought between Britain, France, the Ottoman Empire and Sardinia on one side and Russia on the other. On 30th March 1856, the Crimean War was formally brought to an end with the signing of the Treaty of Paris. This formal recognition signed at the Congress of Paris came after Russia accepted a humiliating defeat


Crimean war and turmoil

  • The Crimean war escalated into a series of fragmented battles and sieges, causing huge loss of life and highlighting wider issues and failures pertaining to leadership, military intervention, mortality rates, medicine and mismanagement.
  • The war itself garnered a great deal of attention and proved to be a significant and defining moment for Europe.
  • It was first and foremost the embodiment of a ‘modern war’, using new technologies that would later characterise the wars of the next century.

Impact on Europe and Russia in particular

  • Whilst the Treaty of Paris marked an important step, with all sides recognising the need for a peaceful solution, the logistics of competing interests in negotiations made it more difficult to put into practice.
  • The main agreement did manage to create some tangible guidelines which included forcing Russia to demilitarise the Black Sea.
  • This agreement was between the Tsar and the Sultan who maintained that no arsenal could be established on the coastline.
    • For Russia this clause in particular proved to be a major blow, weakening its power base as it no longer could threaten the Ottoman Empire via its navy.
    • This was thus an important step in scaling down the potential for escalating violence.
  • Ottoman empire inclusion in Europe: In addition, the treaty agreed the inclusion of the Ottoman Empire into the Concert of Europe which was essentially a representation of the balance of power on the continent, instigated back in 1815 by the Congress of Vienna.
  • Reigning Russia: Russia on the other hand was forced to return the city of Kars and all other Ottoman territory which it had taken into its possession.
    • The principalities of Wallachia and Moldovia were thus returned as Ottoman territory, later granted independence and eventually turned into modern-day Romania.
    • Russia was forced by the treaty to abandon its claim of a protectorate for Christians living in the Ottoman Empire, thus discarding the very premise which engaged Russia in war in the first place.
    • In exchange, the alliance of powers agreed to restore the towns of Sevastpol, Balaklava, Kerch, Kinburn and many other areas back to Russia which had been occupied by the Allied troops during the war.
  • Black sea: A major consequence of this agreement was the reopening of the Black Sea for international trade and commerce.
    • The importance of resuming trade was a major consideration for all involved.

Consequences and future prospect as a result of Crimea war

  • The Crimean War saw the balance of power change hands in Europe.
  • Whilst Russia suffered a major defeat, Austria, which had chosen to remain neutral, would find itself in the coming years at the mercy of a new rising star, Germany.
  • Under the leadership of Bismarck, who took advantage of fraught relations, new strategy for survival emerged. Austria would end up uniting with Hungary in a monarchical empire. Meanwhile, Sardinia, a participant in the alliance at Crimea would intervene in Italian affairs, ensuring that a united nation of Italy would emerge out of the territorial chasms of Europe.
  • Traditional empires were now under threat, with Britain and France sensing the urgency and need to maintain a grip on affairs.


The Crimean War highlighted how difficult it was to keep a balance of power in Europe. The end of the war resulted in a new era of relations, a new way of doing things; the old traditional empires stretched over continents gave way in Europe to the nation-state. Change was coming.


13. Self Help Groups (SHG’s) have become indispensable as an agency of women empowerment but their potential is yet to be fully harnessed as it remains constrained by various factors. Analyse. (250 words, 15 marks)


A self-help group (SHG) is a village-based financial intermediary committee normally consist of 10–20 local women or men. When the formal financial system fails to help the needy, then small groups volunteer to cater to the needs of the financially weak by collecting, saving and lending the money on a micro scale. SHGs have gained wide recognition in most developing countries in Asia where their presence is quite pervasive


Role of SHG’s in women empowerment

  • Capital formation: Through micro-finance, many SHG’s have created valuable assets and capital in the rural areas and are sustaining livelihoods.
  • Access to credit: SHGs provide better access to credit at acceptable and convenient terms. The members have been able to obtain loans for emergent productive and non-productive purposes on comparatively easy terms. This has reduced their dependence on local moneylenders to a large extent.
    • Government initiative such as SHG-Bank linkage program is also increasing their financial inclusion and easy access to credit from formal institutions.
  • Poverty Alleviation: The approach of poverty alleviation through SHG is the most effective means and suits the ongoing process of reforms based on the policy of decentralization.
    • SHGs have given the poor the access to microfinance and consequently led to important changes in their access to productive resources such as land, water, knowledge, technology and credit.
  • Employment generation: Self-employment activities such as collective farming, bee-keeping, horticulture, sericulture have been taken up by SHG’s.
  • Social welfare: There are many successful cases where SHG women have come together to close liquor shops in their village.
  • Rural infrastructure: Schemes such as Aajeevika express have helped SHG’s in creating transport in rural areas.
  • Women empowerment: SHGs have been able to improve the skills of women to do various things by managing the available natural resources.
    • It is estimated that more than 25 million rural women of India have been benefited by the Self Help Groups (SHG).
    • As a group they can help each other to learn so many things along with the money management because most of the women in the rural areas have a very little knowledge for the management of money.
    • g. Kudumbashree in Kerala has been a huge success. Kudumbashree café is an exemplary example of nurturing entrepreneurship through SHG’s.
  • They also act as a delivery mechanism for various services like entrepreneurial training, livelihood promotion activity and community development programs.

Challenges faced

  • There are issues like regional imbalance, less than ideal average loan size, lack of monitoring and training support by self-help group federations.
  • Escalating non-performing assets of self-help group loans with banks.
  • Several studies have also found issues related to governance, quality, transparency and irregularity in their functions.
  • Low levels of literacy among the rural women.
  • The study found that over time groups were disintegrating on account of coordination issues.
  • Rural micro-enterprises run by SHG members suffer from critical bottlenecks, whether in raising funds for start-up, growth and working capital or accessing high-quality technical assistance.

Way Forward

  • Government programs can be implemented through SHGs.
  • This will not only improve the transparency and efficiency but also bring our society closer to Self-Governance as envisioned by Mahatma Gandhi.
  • Constant and enduring structural handholding support from the self-help group promoting institutions (SHPIs).
  • Frequent awareness camps can be organised by the Rural Development department authorities to create awareness about different schemes.
  • Periodic capacity-building of all members, to make the group the collective.
  • With the Government’s focus on digital financial inclusion, investing in training of group members for transition towards technological platforms.
  • It is important to invest in providing the right kind of support to maximize the impact these groups can have on livelihoods.
  • Emphasising SHG movement on women’s entrepreneurship as an engine of growth in rural India.
  • There should not be any discrimination among members based on caste, religion or political affiliations


SHG approach is an enabling, empowering, and bottom-up approach for rural development that has provided considerable economic and non-economic externalities to low-income households in developing countries. SHG approach is being hailed as a sustainable tool to combat poverty, combining a for-profit approach that is self-sustaining, and a poverty alleviation focus that empowers low-income households. It is increasingly becoming a tool to exercise developmental priorities for governments in developing countries.

Value addition

Evolution of SHGs

  • The concept evolved over decades and was pioneered by Noble laureate Mohammad Yunus as Self Help Groups (SHGs) in 1970s.
  • SHG movement in India gained momentum after 1992, when NABARD realized its potential and started promoting it.
  • NABARD’s SHG-Bank Linkage Program (SBLP) connected group members to formal financial services.
  • Over the last two decades, the SBLP has proven to be a great medium for social and economic empowerment for rural women.
  • India has witnessed state-led promotion of SHGs through a three-tiered architecture of community institutions at group, village and cluster level.
  • In 1999, Government of India, introduced Swarn Jayanti Gram Swarojgaar Yojana (SGSY) to promote self- employment in rural areas through formation and skilling of SHGs.

General Studies – 2


14. Currently, the number women law makers in the parliament is at a historical high. However, the number is still low compared to other countries. Suggest measures to improve the representation of women in legislative bodies. (250 words, 15 marks)


In India, women currently make up 14.6 per cent of MPs (78 MPs) in the Lok Sabha, which is a historic high. However, India needs feminization of politics in a huge way to increase women representatives. It would include the involvement of women in the decision-making process, power-sharing, running political parties, holding political offices, and policymaking at all levels of governance of the state.


Status of women in politics

  • In electoral representation, India, for instance, has fallen several places in the Inter-Parliamentary Union’s global ranking of women’s parliamentary presence, from 117 after the 2014 election to 143 as of January 2020.
  • India is currently behind Pakistan (106), Bangladesh (98) and Nepal (43) and ahead of Sri Lanka (182).
  • Prior to the 2019 election, scholars such as Carole Spary and S M Rai have estimated that it would take another 40 years to have 33 per cent women in the Lok Sabha, based on historical election trends and assuming that no gender quota is introduced, such as the heavily undermined and ignored the Women’s Reservation Bill.
  • According to the WEF Global Gender Gap Report 2020,India ranks 18th in terms of political empowerment, far better than its rank in the other dimensions of the index: 149th in economic participation and opportunity, 112th in educational attainment, 150th in health and survival, and 108th in the overall index.

Contribution of women to politics

  • The highly effective contributions of local-level panchayat sarpanches and health officials such as Roorkee’s Daljit Kaur, Singhwahini’s Ritu Jaiswal and the mayor of Chandannath municipality in Nepal, Kantika Sejuwal, among many others, have been justly exalted.
  • At the global level, much has already been written about the superior performance of women leaders, such as Jacinda Ardern (New Zealand), Tsai-Ing Wen (Taiwan), Sanna Marin (Finland) and KK Shailaja (Kerala), in handling the pandemic.
  • South Asia has had the largest number of women heads of state — including Sirimavo Bandaranaike, Chandrika Kumaratunga, Indira Gandhi, Khaleda Zia, Sheikh Hasina, and Benazir Bhutto — of any region in the world till recently.

Reasons for low participation of women in political system

  • Prejudice: Ironically it exists among both men and women – against genuine equality. It is believed that male legislators have the gumption to fulfill election manifesto more than women.
  • About half the world’s population feel men make better political leaders as per UNDP Gender Social Norms Index.
  • Another major factor is familial support to pursue political career for women. In India, it is most often those women who have a political background that enter into electoral arena.
  • Role of Money power in politics makes it harder for women to enter the political forum.
  • 24% of parliamentary seatsworldwide are held by women, and there are only 10 female heads of government out of a possible 193. This shows the dearth of women representation in politics.
  • The unhealthy political environment: For instance In this recent MeToo movement, a journalist Priya Ramani accused Union Minister of state of external affairs, MJ Akbar of sexual harassment.
  • On the reserved seats, at the local level, political leaders take positions in the name of their wife, and after winning elections, actual power is used by their male counterparts instead of women. (Concept of sarpanch pati raj/pati panchayat phenomenon)

Need for more representation of women

  • Women legislators in India raise economic performance in their constituencies by about 1.8 percentage points per year more than male legislators.
  • When average growth is 7%, this implies that the growth premium associated with female legislators is about 25%.
  • Lower Criminalization of Politics:Male legislators are about three times as likely as female legislators to have criminal charges pending against them when they stand for election. This explains the growth difference mentioned above.
  • Policy Making– Better representation of women’s and children’s concerns in policymaking. Eg: Panchayat Raj institutions serve as a good example in this front.
  • Lower Corruption: The rate at which women accumulate assets while in office is 10 percentage points lower, per year than among men. These findings line up with experimental evidence that women are more just, risk-averse and less likely to engage in criminal and other risky behaviour than men.
  • Economic growth: It was found that male and female politicians are equally likely to negotiate federal projects for road building in their constituencies. However, women are more likely to oversee completionof these projects.
    • Eg: The share of incomplete road projects is 22 percentage points lower in female-led constituencies.
  • From a feminist viewpoint politics needs to follow a road that moves women out of the traditional social and political marginalization.
  • Despite so many favorable points for women, women make up 14% of the Lok Sabha and 11% of the Rajya Sabha.

Measures needed

  • India should have an Election Commission-led effortto push for reservation for women in political parties.
  • India is yet to pass a bill introducing 33% reservation in Parliament for women. This experiment at the local level (PRI’s and ULB’s) has been very successful.
  • Political mentoring andskill training can enhance their political knowledge; thereby becoming potential candidates who will steer the nation towards development.
  • Awareness, education and role modellingthat encourage women towards politics and wipe out Gender stereotypes which perceive women as weak representatives.
  • Inclusive economic institutions and growth—both necessary for and dependent on social empowerment—require inclusive political institutions.
  • Women’s leadership and communication skillsneed to be enhanced by increasing female literacy especially in rural areas. They should be empowered in order to break socio-cultural barriers and improve their status in the society.


B.R. Ambedkar once said that “political power is the key to all social progress”. Ensuring proportional representation to women in parliament is seen by policy makers as a panacea to the issues surrounding women empowerment. Recognising the significance of roles of women in decision making process in the society is critical to strengthen women’s agencies for building a progressive society with equality of opportunities among all citizens. Male politicians must take a lead role in challenging traditions which foster inequality and also unequivocally condemn the misogynistic language that their counterparts use when it comes to women.


15. Lokpal and Lokayutka as the ombudsmen for anti-corruption are under performing and needs reforms for it achieve their true potential and ensure accountability in the administration. (250 words, 15 marks)


The Lokpal and Lokayukta Act was enacted in 2013 and came into force in 2014. Almost six years after the Lokpal and Lokayuktas Act, 2013, was signed into law, several key provisions needed for the anti-corruption ombudsman to function have still not been operationalised. The ombudsmen, brought in after the 2011 anti-corruption movement, have become powerless both at the Centre and in the states. According to the Corruption Perception Index Report 2022 released by Transparency International, India ranks at 85 among the 180 countries surveyed.


Persisting issues with Lokpal operationalisation

  • Delay in the appointment of Lokpal due to the legal technicalities and lack of political will is a major issue.
  • The Selection committee and the issue of Leader of Opposition is still lingering and the recent selection of Lokpal didn’t have the views of the opposition party, which is against democratic principles.
  • The process of constituting the Lokpal’s inquiry and prosecution wings has not yet begun, and regulations for how to conduct preliminary investigations have not been made.
  • The Act prohibits Lokpal inquiry if the allegations against the PM in certain circumstances.
    • Thus, Lokpal do not have full authority to investigate PM.
    • Also, complaints against the PM are not to be probed unless the full Lokpal bench considers the initiation of an inquiry and at least two-thirds of the members approve it.
  • There is not much protection provided for whistle-blower in the Lokpal Act, 2013.
  • All the cases of corruption in which high officials are involved go to the CBI. Lokpal do not have complete control. This is a major issue which dilutes the independence of Lokpal.
  • Through an amendment in 2016, the government has done away with the statutory requirement of public disclosure of the assets of public servants’ spouses and dependent children.
    • The vesting of the power of prior sanction with Lokpal has been almost nullified with amendments in Prevention of Corruption Act which strengthen the requirement to seek the government’s permission.
  • Judiciary is totally excluded from the ambit of Lokpal. Thus, there is no chance to hold the judiciary accountable.
  • The establishment of Lokayukta and any appointment falls within the domain of the States, which is being delayed by the state due to lack of political will.
  • In the year 2019, the Lokpal received 1,427 complaints. In 2020–21, the number dipped to a mere 110. Reports say that during the first half of 2021, only 30 complaints were filed before the Lokpal.

Issues with Lokayuktas

  • In Kerala, by way of a controversial ordinance, the Left government has recently amended Section 14 of the Lok Ayukta Act in the state.
  • As a result, the report of the Lok Ayukta becomes merely recommendatory, whereas before the amendment, it could effectively unseat a public servant or a minister when there were adverse remarks.
  • In West Bengal too, the Lokayukta has been reduced to a powerless body.
  • The situation in almost all other states is similar.

Way forward

  • The need of the hour is to revamp the system perceptually, structurally and functionally.
  • For the Lokpal to become an independent body, we need to evolve a select committee that is equally independent.
  • At present, the domination of the political wing of the state is writ large in the committee that selects the Lokpal and its members.
  • The predominance now given to retired judges in the Lokpal also needs reconsideration.
  • Lokpal should be a body of persons from different walks of life who have impeccable integrity and who are held in high esteem by the public.
  • It is necessary to ensure that its recommendations have tremendous moral force and popular acceptability.


Looking at the low ranking of India in Corruption on global level, there is a need to check the corruption by strong institutions. Creation of the institution of Lokpal and Lokayuktas by forming its members to function has come up as a welcome step. But it shall function independently of any political influence so that a proper system of checks-and -balance is maintained in the federal and democratic system of India.

Value addition

Lokpal and Lokayukta Act: Features

  • The Act consists of setting up a team called Lokpal, headed by a chairperson and consisting of eight people
  • This committee will have the power to investigate people who might be acquiring money through corrupt means.
    • All categories of public servants will be covered under Lokpal, including the Prime Minister, while the armed forces will be exempted.
  • The body will also have the power of confiscating property or assets acquired by corrupt means
  • One of the main powers of the Lokpal is that they can protect all the public servants who act as whistle-blowers.
    • They also have a special Whistle Blowers Protection Act established for the same reason.
  • Lokpal will also be given the power to conduct trials in a special court if they feel that the trial is of extreme importance
    • They can also fine people for false or inaccurate complaints
    • The fines can amount up to Rs 2 lakh
  • The Act also incorporates provisions for attachment and confiscation of property acquired by corrupt means, even while the prosecution is pending.
  • The States will have to institute Lokayukta within one year of the commencement of the Act.


16. 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, 15 marks)


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.


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.


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


17. 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, 15 marks)


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


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 Difference Small Finance Bank Payments Bank
Definition Small Finance Banks are financial institutions that intend to fund the financial needs of the underprivileged sections through basic banking activities A 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 promote Individuals/ 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 Share 40% in starting Then can be gradually brought down to 26% in 12 years 40 % for first Five 5 years from the date of commencement of business
Capital Required Minimum Paid Up capital should be 100 Crores Minimum Paid Up capital should be 100 Crores
Regulatory Requirements Meet CRR and SLR set by the RBI Meet CRR and SLR set by the RBI
Customer Reach Customers are reached through its branches Customers are reached through Mobile banks
Demand Deposit Can accept demand deposit like savings deposit without any fixed limit Can accept demand deposit like savings deposit only upto Rs. 1 lakh
Time Deposit Can accept Time Deposit such as Fixed Deposit and Recurring Deposit Can’t accept Time Deposit such as Fixed Deposit and Recurring Deposit
Loan Can offer loan. Must extend 75% loans to priority sectors Cannot offer loan
Remittance Services Can provide Remittance Services Can provide Remittance Services
Online Banking Solutions Can offer online banking services Can offer online banking services such as bill payment, etc.
Revenue Earns revenue through leding services Earns revenue through transaction charges and fee income for remittances
Debit Card Can issue Debit Card and ATM Card Can issue Debit Card and ATM Card
Credit Card Can issue credit cards Can’t issue credit cards
Target Customers MSME, Small Farmers, Small Businessman, Unorganized Workers, etc. Poor migrant labourers, unbanked Indians, under-banked customers, low-income households and small businesses
Forex Services Can provide Forex Services and can charge less than commercial bank for these products
Adoption of Technology Should be fully technology driven right from the beginning Should be fully technology driven right from the beginning
Branches For Initial 3 years, 25% branches must be in rural areas to tap those areas Must have 25% branches in rural areas
Third Party Products Can 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.


  • 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.


18. Do you think National Asset Reconstruction Company Limited (NARCL) can help the banks tide over their enormous NPA liabilities? Critically examine. (250 words, 15 marks)


The Reserve Bank of India on October 4, 2021 gave licence to the Rs 6,000 crore National Asset Reconstruction Company Ltd (NARCL), a move that will help kickstart operations of the bad bank. K V Kamath Committee also suggested setting up Bad bank to revive sectors such as Trade, Textile, NBFCs, Steel and construction, etc.


Potential of NARCL

  • While there are 28 ARCs in the private sector, there was a need for government-backed receipts for big ticket resolutions.
  • The government guarantee for the proposed security receipts is a positive stepping stone for unlocking stressed assets’ value.
  • The upfront cash payment by the NARCL to banks will immediately be accretive for the profitability and capital of the banks, however the ability of the NARCL to resolve these assets in a time-bound manner will be critical for future provision writeback by banks
  • The whole idea is to ensure that these assets for which this whole set-up is being created, and the value that is locked in the assets is realised and comes back to the banks; they use it as a growth capital and the banking system becomes more robust
  • From the perspective of a commercial bank saddled with high NPA levels, it will help.
    • That’s because such a bank will get rid of all its toxic assets, which were eating up its profits, in one quick move.
    • When the recovery money is paid back, it will further improve the bank’s position.
    • Meanwhile, it can start lending again.
  • From the perspective of the government and the taxpayer, the situation is a little more muddled.
    • After all, whether it is recapitalising PSBs laden with bad loans or giving guarantees for security receipts, the money is coming from the taxpayers’ pocket.
    • While recapitalisation and such guarantees are often designated as “reforms”, they are band aids at best.
    • The only sustainable solution is to improve the lending operation in PSBs.
  • Lastly, the plan of bailing out commercial banks will collapse if the bad bank is unable to sell such impaired assets in the market.


  • NARCL will be owned largely by public sector banksand have its management drawn mostly from them, which is one of the biggest challenge. It is understandable that if the banks could not dispose of the bad debt easily under them, the NARCL will face similar results.
  • The PSBs will be both shareholders and customers, which would lead to the danger of the bad bank being nothing more than a means to shift some bad debt from one book to another.
  • The price at which NARCL buys the stressed loans from the banks might prove to be challenging, even though the transaction involves the public sector as both buyer and seller.
  • The government guarantee mentioned earlier may ensure an 18% minimum recovery, but it is not free. Banks will have to pay a fee to the government for it. Adjusted for this, it remains to be seen how much recovery banks can make using NARCL.
  • Banks though will have the freedom to sell the security receipts. But to what extent a secondary market for such securities evolves is debatable.
  • Physical assets tend to deteriorate soon. This has been a recurring problem in the IBC process, where pressing the bankruptcy solution too late has meant that there is little value left that will attract bidders. The NPAs that the NARCL will handle are all old, legacy assets and probably there islittle residual value left in them.
  • It is not clear whether the bad bank has a finite end date—that is, it is a one-time solution—or whether it will continue to exist forever as another option for banks.
  • Only by reforming the banking systemin India, especially the public sector banks, can the financial system be made more efficient. The underlying cause remains unaddressed by the latest reform.
  • Many economists including the former RBI Governor have opposed the establishment of Bad Bank in India citing above reasons.

Way forward

  • For PSBs to avoid the possibility of conflict of interest, the processes must be transparent and independent market professionalsare employed to avoid conflicts.
  • It is seen that banks typically recover only 10-15 paise to a rupee against their fully provisioned bad loans, entailing substantial haircuts of 85-90 per cent. Thus, it is important that banks transfer bad loans to NARCL at realistic valuations that factor in such haircuts.
  • The success of the bad loan experiment will require a talented management team of IDRCL and the incentive structure for its employees. If best talent is taken up from the market and is offered liberal incentives for recovery of loans above 18 per cent, it could generate more than what the industry is estimating now.
  • While the objective of NARCL is a novel one, the success lies in its implementation and downstream reforms in banks in lending.
  • The NARCL will have to deliver on the recovery front or risk being a dump yard. Dump yards do not facilitate redistribution of capital in an economy and therefore have a cost.

Value addition

About National Asset Reconstruction Company Ltd (NARCL)

  • It will be a five-year guarantee for the National Asset Reconstruction Company Limited (NARCL)-issued security receipts to banks.
  • Under the proposed mechanism, the NARCL will acquire assets by making an offer to the lead bank.
  • Private sector asset reconstruction firms (ARCs) may also be allowed to outbid the NARCL.
  • Separately, public and private lenders will combine forces to set up an India Debt Resolution Company (IDRC) that will manage these assets and try to raise their value for final resolution.
  • A 15% cash payment would be made to the banks based on some valuation and the rest will be given as security receipts.
  • Once the NARCL and the IDRC have finally resolved the asset, the balance 85% held as security receipts would be given to the banks.
  • If the bad bank is unable to sell the bad loan, or has to sell it at a loss, then the government guarantee will be invoked and the difference between what the commercial bank was supposed to get and what the bad bank was able to raise will be paid from the Rs 6000 crore that has been provided by the government

Overview on Non-Performing Assets and need for bad bank

  • Scheduled commercial banks (SCBs) were carrying NPAs worth Rs 8.96 lakh crore on their balance sheet at the end of March 2020.
  • Likely resurgence in NPAs: With Covid-related stress, Indian banks are expected to see a resurgence in their non-performing loans from 8.34-lakh crore in end-FY21 to ₹10-11 lakh crore by end of this fiscal.
  • Declining performance of IBC: The IBC of late is following the law of diminishing returns—after the initial success of selling a few big steel mills and other good assets, where the lenders recovered well over 50% of their dues, things have gone downhill.
    • In some high-profile cases, such as Videocon, Ruchi Soya and Jet Airways, the lenders have hardly recovered 5-6% of their dues.
  • Pending cases: Also, too many cases and too few NCLT judges have meant pile-ups and most resolutions taking twice the time limit originally set under the IBC.
  • Problem with existing ARCs: Also, the asset construction route has also run into issues. Here too the recoveries have slowed and the ARCs are also facing capital issues.
    • Their security receipts are being downgraded by rating agencies as the recovery expectations move downwards.


19. Given the current situation, for a developing country like India, what should be the primary objective of monetary policy – accelerate growth or price stability? Critically examine. (250 words, 15 marks)


The term ‘Monetary Policy’ is the Reserve Bank of India’s policy pertaining to the deployment of monetary resources under its control for the purpose of achieving GDP growth and lowering the inflation rate. The Reserve Bank of India Act 1934 empowers the RBI to make the monetary policy.


Objective of monetary policy

The objectives of monetary policy include ensuring inflation targeting and price stability, full employment and stable economic growth.

Current situation of Indian Economy

  • Rising inflation: India’s inflation based on the consumer price index quickened to 6.01% in January, breaching the central bank’s upper tolerance limit of 6%.
  • Fuel prices: The government has increased taxation of energy to raise resources.
    • Since energy is used for all production, prices of all goods and services tend to rise and push up the rate of inflation.
    • Further, this is an indirect tax, it is regressive and impacts the poor disproportionately It also makes the RBI’s task of controlling inflation difficult.
  • Supply shortage: The lockdowns disrupted supplies and that added to shortages and price rise.
    • Prices of medicines and medical equipment rose dramatically.
    • Prices of items of day-to-day consumption also rose.
    • Fruits and vegetable prices rose since these items could not reach the urban markets.
  • International factors: Most major economies have recovered and demand for inputs has increased while supplies have remained disrupted (like chips for automobiles).
    • So, commodity and input prices have risen (like in the case of metals).
    • Businesses claim increase in input costs underlies price rise.
  • Data collection and methodology: In April and May 2020, data on production and prices could not be collected due to the strict lockdown.
    • So, the current data on prices for April to July 2021 are not comparable with the same months of 2020.
    • As such, the official inflation figures for these months in 2021 do not reflect the true picture.
  • Weak Rupee: The weakening of the rupee also added to inflation.

Accelerate Growth: primary objective of monetary policy

  • Economic growth enables consumers to consume more goods and services and enjoy better standards of living.
  • With higher output and positive economic growth, firms tend to employ more workers creating more employment.
  • Economic growth creates higher tax revenues, and there is less need to spend money on benefits such as unemployment benefit. Therefore economic growth helps to reduce government borrowing. Economic growth also plays a role in reducing debt to GDP ratios.
  • Higher economic growth leads to higher tax revenues and this enables the government can spend more on public services, such as health care and education etc. This can enable higher living standards, such as increased life expectancy, higher rates of literacy and a greater understanding of civic and political issues.
  • With higher economic growth a society can devote more resources to promoting recycling and the use of renewable resources.
  • Economic growth encourages firms to invest, in order to meet future demand. Higher investment increases the scope for future economic growth – creating a virtuous cycle of economic growth/investment.
  • High economic growth leads to increased profitability for firms, enabling more spending on research and development. This can lead to technological breakthroughs, such as improved medicine and greener technology.
  • Also, sustained economic growth increases confidence and encourages firms to take risks and innovate.
  • India needs to accelerate economic growth to above 8% to achieve its target of becoming a $5-trillion economy by 2025
  • Low interest rates are supposed to help spur growth. The theory is that low rates will encourage governments, businesses and consumers to borrow and spend more freely.
  • This will result in higher demand by consumers and investments by corporations, leading to higher GDP growth and job creation. This leads to a virtuous cycle in the economy—higher GDP growth and job creation will lead to increased income, which will lead to higher consumption and so on and so forth.

Price Stability: primary objective of monetary policy

  • Maintaining price stability is the foremost objective of the monetary policy committee of RBI. However, during the pandemic, growth has taken centre stage and RBI has rightly cut interest rates. But now it is taking a neutral stance in the wake of rising inflation.
  • Price stability is vital to economies because price levels determine inflation and deflation.
    • Severe, rapid, or unexpected inflation rates and deflation rates are major threats to economic growth because they alter the value of money.
  • High inflation causes wages, savings, and purchasing power to decrease in value.
    • During times of severe inflation, consumers become frightened and aggregate demand declines.
  • Such inflation causes businesses to lose out on profits and let employees go, compounding the public’s fear.
  • Price stability means an economy can avoid severe inflation and severe deflation.
  • With stable prices, consumers can recognize relative price changes without being confused by overall price changes. This means informed decision-making when they consume and invest.
  • When unexpected inflation occurs, wealth is redistributed randomly, rather than based on merit or need: for instance, different goods’ prices increase at different rates, which punishes certain businesses more than others, and creditors receive less in loan payments than they would have with low inflation, while debtors benefit from inflation. With price stability, this arbitrary redistribution of wealth is avoided.
  • A risk premium is the lowest return on investment a consumer needs in order to hold a risky asset rather than a risk-free one. If risk premia are high, it means consumers are unwilling to make risky investments, and economic activity slows.
    • If risk premia are low, real interest rates are lower and consumers feel more comfortable with investment decisions, which leads to economic growth.
  • A reasonable price stability determines various factors such as Investment climate of the country, borrowing trends of businesses, ensure reasonable supply inputs of industries and also cost of agricultural produce.


                Thus, a right mix of both – accelerating growth and price stability should be the twin objectives of monetary policy of RBI. In order to achieve its main objectives, the Monetary Policy Committee determines the ideal policy interest rate that will help achieve the inflation target in front of the country.


20. 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, 15 marks)


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.


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.


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