Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
5. India’s high tariffs and trade barriers can neutralize the benefits of productivity-linked incentive schemes and hinder the country’s economic growth and global competitiveness. Analyse its implications. (250 words)
Difficulty level: Tough
Reference: Live Mint
Why the question:
A Confederation of Indian Industry report points out that our high tariffs mean that “tariff-induced cost” often neutralizes the productivity-linked incentive scheme.
Key Demand of the question:
To write about impact of India’s trade barriers and measures needed to rationalise them.
Directive word:
Analyse – When asked to analyse, you must examine methodically the structure or nature of the topic by separating it into component parts and present them in a summary.
Structure of the answer:
Introduction:
Begin by giving context.
Body:
First, in detail, write about the impact of trade barriers – increase production costs and offset the benefits of productivity-linked incentives, reducing competitiveness and hinder the country’s economic growth etc.
Next, write about the measures that are needed in this regard.
Conclusion:
Conclude with a way forward in which India can evolve a coherent trade policy.
