UPSC Insights SECURE SYNOPSIS : 29 September 2025

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

General Studies – 1

Topic:  Factors responsible for the location of primary, secondary, and tertiary sector

Q1. Explain the determinants of the location of secondary sector industries. Evaluate how technological changes are reshaping these determinants in India. Suggest suitable policy measures to balance industrial growth with regional equity. (15 M)

Difficulty Level: Medium

Reference: InsightsIAS

Why the question
Industrial location is a classic theme in Geography, but technological change and India’s regional imbalances make it contemporary and analytical.

Key demand of the question
The question requires explaining the traditional determinants of secondary sector location, evaluating how technology is altering their importance in India, and suggesting policy measures to promote balanced regional industrialisation.

Structure of the Answer

Introduction
Briefly highlight how industrial location has historically been shaped by geography and resources, but is now influenced by technology and policy.

Body

• Determinants of location: Explain classical factors such as raw materials, power, labour, markets, transport, policy and agglomeration.
• Impact of technological changes: Evaluate how automation, renewable energy, digital supply chains and R&D ecosystems are transforming these determinants in India.
• Policy measures: Suggest ways like industrial corridors, fiscal incentives, skill development, and decentralised urbanisation to balance growth with regional equity.

Conclusion
Conclude with a forward-looking note on how industrial geography in India is shifting from resource-dependence to knowledge and innovation, requiring equitable planning.

Introduction
The spatial spread of industries reflects the interplay of geographical endowments, infrastructural linkages, and state policy. Classical determinants such as raw materials, labour and power continue to matter, but India’s present phase of digital manufacturing and supply-chain integration is redefining these factors, with implications for regional balance.

Body

Determinants of industrial location

1. Raw material availability: Industries dependent on bulky or weight-losing raw materials locate near resource bases to reduce transport costs and wastage.
   Eg: The Bhilai and Durg steel plants in Chhattisgarh emerged near iron ore deposits and limestone quarries, ensuring lower logistics cost and steady supply for large-scale production.
2. Power and energy supply: Reliable and affordable power remains critical, especially for energy-intensive industries, which cannot function with unstable supply.
   Eg: The aluminium smelters in Odisha utilise hydropower from Hirakud dam and thermal plants, demonstrating how abundant energy ensures competitiveness and industrial survival.
3. Market proximity: Industries locate close to large consumer bases to minimise distribution costs and cater to expanding domestic and export demand.
   Eg: The Ahmedabad and Surat textile hubs prospered due to access to Gujarat’s domestic market and proximity to western ports for exports, enabling scale and profitability.
4. Labour supply and skills: Access to both cheap and skilled labour is vital, as industries depend on manpower for production, maintenance and innovation.
   Eg: The Tiruppur knitwear cluster in Tamil Nadu grew with its pool of skilled tailors, dyers and exporters, which sustained India’s leadership in global knitwear exports.
5. Transport and connectivity: Industrial growth clusters around regions with multi-modal connectivity that lowers input-output costs and enhances access.
   Eg: Mumbai’s industrial rise was fuelled by its port, railways and road networks, making it a preferred base for cotton textiles, petrochemicals and automobiles.
6. Government policy and incentives: State support through tax breaks, subsidies and creation of industrial corridors shapes investment choices.
   Eg: The Delhi-Mumbai Industrial Corridor (DMIC) attracted electronics and automobile investments due to special zones, plug-and-play facilities, and fiscal concessions.
7. Agglomeration economies: Clustering of firms provides economies of scale, shared infrastructure, and innovation ecosystems that reduce overall costs.
   Eg: The Bengaluru IT and electronics cluster illustrates how agglomeration attracts talent, venture capital, and support industries, reinforcing the city’s global position.

Technological changes reshaping determinants in India

1. Reduced dependence on raw materials: Modern logistics, lightweight substitutes and recycling have lessened the need for industries to be tied to raw material sites.
   Eg: Battery recycling units in Maharashtra supply critical minerals like lithium and cobalt, reducing dependence on distant mines and reshaping location choices.
2. Automation and robotics: With robotics and Industry 4.0 technologies, labour cost advantage is no longer decisive, shifting focus to ecosystems of high-tech support.
   Eg: The Noida electronics cluster demonstrates adoption of robotic assembly lines, lowering labour intensity and attracting capital-intensive firms to technology hubs.
3. Digital infrastructure and logistics: E-commerce, warehousing and smart logistics have made connectivity and digital backbone more important than physical geography.
   Eg: Amazon’s fulfilment centres near Hyderabad and Delhi NCR thrive due to highway connectivity and digital infrastructure that supports real-time supply chains.
4. Renewable energy transition: Decarbonisation drives location preference towards areas with abundant solar and wind power, instead of traditional coal belts.
   Eg: Solar-powered industrial parks in Gujarat attract green industries like EV manufacturing, which prefer renewable-powered operations for cost and ESG compliance.
5. R&D and innovation hubs: Industries today prefer to locate near research centres, universities and biotech parks where talent and innovation converge.
   Eg: The Hyderabad pharma and biotech hub built around Genome Valley leverages CSIR labs and universities, enabling it to emerge as India’s life sciences capital.

Policy measures for regional equity

1. Strengthening industrial corridors in lagging regions: New corridors in underdeveloped regions can decentralise industry and generate balanced growth.
   Eg: The Amritsar-Kolkata Industrial Corridor (AKIC) can integrate eastern states with global supply chains, reducing overconcentration in western India.
2. Infrastructure-led development: Multi-modal connectivity projects can make hinterlands attractive to investors by lowering transaction costs and delays.
   Eg: Northeast multimodal projects under PM Gati Shakti improve transport, reducing isolation and opening up scope for agro-processing and manufacturing hubs.
3. Fiscal incentives for backward regions: Special economic packages with weighted tax benefits and tailored PLI schemes can induce industry to relocate or expand.
   Eg: The PLI scheme for textiles encourages firms to invest in UP and MP, helping spread jobs and reduce the west-south industrial skew.
4. Skill and R&D ecosystems: Developing regional talent pools through technical universities, skill hubs and R&D parks ensures long-term industrial sustainability.
   Eg: Skill India centres in Jharkhand train youth for steel and mining-based industries, aligning human resources with local resource strengths.
5. Decentralised urbanisation: Planned industrial townships in tier-2 and tier-3 cities can distribute growth and reduce metropolitan pressure.
   Eg: Integrated industrial townships at Dholera in Gujarat provide modern infrastructure and a replicable model for balanced industrial expansion.

Conclusion
India’s industrial landscape is shifting from resource-dependence to knowledge- and technology-orientation. If policy nudges are aligned with equitable regional development, industrialisation can serve as a lever not only for growth but also for inclusive and balanced national development.

Topic: Distribution of important resources in the world

Q2. “Resource abundance often leads to paradoxical underdevelopment”. Examine this phenomenon with reference to India. Compare situations across different resource-rich regions within the country. (10 M)

Difficulty Level: Medium

Reference: InsightsIAS

Why the question
India’s mineral-rich states paradoxically face high poverty and low HDI, raising concerns of governance, inclusivity, and regional disparity.

Key demand of the question
The question demands an analysis of how resource abundance leads to underdevelopment in India, and a comparison of different resource-rich regions to highlight this paradox.

Structure of the Answer

Introduction:

Define the idea of resource curse with Indian context and link it to underdevelopment paradox.

Body:

• Examine the paradox of underdevelopment in India’s mineral-rich states (poverty, governance deficit, displacement, environment, fiscal limits).
• Compare situations across different regions—eastern mineral belt, north-east, western success stories, and tribal belts.

Conclusion:

Suggest governance reforms and inclusive strategies to turn the resource curse into a developmental boon.

Introduction

Despite being home to 54% of India’s mineral wealth, states like Jharkhand, Odisha, and Chhattisgarh remain among the poorest in per capita income and HDI rankings (NITI Aayog SDG Index 2023). This illustrates the “resource curse” where abundance coexists with underdevelopment.

Body

Resource abundance and paradoxical underdevelopment in India

1. Poverty despite mineral wealth: Mineral-rich states contribute to GDP but lag in human development and poverty reduction.
   Eg: Jharkhand produces 27% of India’s coal, yet has one of the highest poverty ratios (NITI Aayog 2023).
2. Governance deficit and corruption: Resource rents often fuel corruption, leakages, and poor institutional accountability.
   Eg: Shah Commission (2013) exposed large-scale illegal iron ore mining in Odisha, showing weak governance.
3. Displacement and social unrest: Mining displaces tribal populations, worsening inequality and fuelling conflict.
   Eg: Bastar, Chhattisgarh, faces Maoist insurgency linked to iron ore mining and displacement (MHA Report 2023).
4. Environmental degradation: Intensive mining leads to deforestation, water pollution, and soil loss, undermining livelihoods.
   Eg: Coal mining in Singareni (Telangana) degraded agricultural land (MoEFCC Report 2022).
5. Low fiscal gains for locals: Royalties centralised under Union control limit resource benefits for local communities.
   Eg: 15th Finance Commission (2020) noted limited trickle-down from mining royalties in Jharkhand and Odisha.

Regional comparison within India

1. Eastern mineral belt underdevelopment: Odisha, Chhattisgarh, Jharkhand lag in HDI despite resource surpluses.
   Eg: Odisha holds 54% of bauxite, yet its per capita income is below national average (MoSPI 2023).
2. North-east underutilisation: Meghalaya (coal) and Assam (oil) struggle with ecological degradation, insurgency, and poor infrastructure.
   Eg: Assam has produced oil since 1867, yet lags in industrialisation (ONGC Report 2023).
3. Western success stories: Gujarat and Rajasthan leverage resources through value addition, infrastructure, and policy support.
   Eg: Rajasthan used limestone for cement hubs, boosting jobs and growth (Economic Survey 2022-23).
4. Maharashtra’s balanced growth: Mineral wealth used with diversified industry and urbanisation.
   Eg: Nagpur’s manganese and Chandrapur’s coal fuel industries without extreme poverty traps.
5. Contrast with tribal belts: Tribal-dominated mineral zones suffer from neglect, exclusion, and weak human capital.
   Eg: Dantewada (Chhattisgarh) rich in iron ore, remains an aspirational district under NITI Aayog.

Conclusion

India’s paradox of resource abundance stems from governance gaps, displacement, and poor local benefit-sharing. Converting this curse into a boon requires transparent mining regulation, local beneficiation, and tribal-inclusive development, ensuring resources uplift people rather than trap them in underdevelopment.

General Studies – 2

Topic: Parliament and State Legislatures – structure, functioning, conduct of business

Q3. Why are parliamentary committees regarded as ‘mini-parliaments’? Assess whether extending their tenure can enhance their effectiveness in reflecting the representative character of the legislature. (15 M)

Difficulty Level: Medium

Reference: TH

Why the question
Government is mulling extending the tenure of parliamentary standing committees to two years, after some lawmakers complained that the current one-year term was too short to make any meaningful contribution.

Key Demand of the question
The question requires explaining the basis for calling committees ‘mini-parliaments’, critically assessing the impact of longer tenure on their representative role, and suggesting reforms for strengthening their functioning.

Structure of the Answer:

Introduction:

Note the role of committees as extensions of Parliament that deepen scrutiny and ensure executive accountability.

Body:

• Mini-parliament nature: Show how committees mirror the composition of the House, deliberate across party lines, scrutinise bills, and ensure financial oversight.
• Longer tenure impact: Argue for continuity, expertise, and follow-up benefits, while also noting risks like stagnation, limited powers, and political constraints.
• Way forward: Suggest reforms like statutory backing, expert involvement, stronger reporting mechanisms, and transparency.

Conclusion:

End with a futuristic note that tenure reform must be coupled with systemic strengthening to make committees true guardians of parliamentary democracy.

Introduction

Parliamentary committees embody the essence of deliberative democracy, allowing detailed scrutiny of policies beyond the political divide of the House. By enabling cross-party dialogue and evidence-based oversight, they reinforce the principle of collective responsibility under Article 75.

Body

Why are parliamentary committees regarded as ‘mini-parliaments’?

1. Cross-party representation: Committees mirror the party composition of Parliament, ensuring proportionate representation of political opinion.
   Eg: Standing Committees are chaired in proportion to party strength, as per Rules of Procedure, Lok Sabha.
2. Detailed legislative scrutiny: They provide a forum for clause-by-clause examination of bills, similar to parliamentary debates.
   Eg: The 2021 IT Intermediary Rules were extensively discussed in the Standing Committee on IT.
3. Deliberative and consensus building: Members debate in a non-partisan atmosphere, often arriving at unanimous recommendations.
   Eg: The PAC (CAG 2G report, 2010) gave cross-party recommendations.
4. Accountability mechanism: Committees summon ministries, experts, and stakeholders, resembling the checks and balances of the legislature.
   Eg: The Public Accounts Committee (PAC) derives authority from Articles 148–151, scrutinising CAG reports.

Extending their tenure can enhance effectiveness

Yes, extension can help:

1. Continuity in work: A two-year term allows sustained engagement on complex subjects that require long-term analysis.
   Eg: The Standing Committee on Finance (2019–20) required continuity to review the Insolvency Code amendments.
2. Strengthened expertise: Longer tenure allows members to build subject knowledge, enhancing quality of deliberations.
   Eg: The National Commission to Review the Working of the Constitution (NCRWC, 2002) recommended subject specialisation.
3. Effective follow-up: Enables committees to track implementation of their recommendations over multiple sessions.
   Eg: PRS data (2023) shows only 55% of recommendations are acted upon—longer tenure may improve compliance.
4. Reduced disruption: Avoids frequent reshuffling of members and chairpersons, ensuring institutional memory.
   Eg: UK parliamentary select committees serve for full 5-year terms, enabling stability.

No, extension may not help much:

1. Political interference remains: Governments are not bound to accept recommendations, irrespective of tenure.
   Eg: Out of 3,500 recommendations (2015–20), only 40% were accepted by ministries (PRS India, 2021).
2. Risk of stagnation: Long tenure may reduce dynamism and fresh perspectives from rotating members.
   Eg: In Rajya Sabha committees, rotation ensures regional and political diversity every year.
3. Structural limitations: Committees lack powers to enforce decisions; tenure does not address this weakness.
   Eg: The K.T. Thomas Committee on parliamentary reforms (2002) noted absence of binding force.
4. Attendance and engagement: Low attendance and overburdened MPs dilute effectiveness, regardless of tenure.
   Eg: PRS data (2022) shows average attendance of 46% in standing committees.

Way forward

1. Legislative backing: Provide constitutional status or statutory backing to select committees for binding force.
   Eg: The Punchhi Commission suggested strengthening oversight powers of Parliament vis-à-vis executive.
2. Strengthen subject expertise: Train members and involve domain experts in advisory roles.
   Eg: OECD countries like Germany include academic experts in committee hearings.
3. Improve transparency: Publish reports, meeting minutes, and action-taken notes more proactively.
   Eg: Lok Sabha Secretariat (2024) initiated e-committee portals for real-time updates.
4. Accountability mechanism: Mandate ministries to table a time-bound Action Taken Report on recommendations.
   Eg: UK and US Congress committees have statutory mechanisms for government response.

Conclusion

Reform of parliamentary committees must go beyond tenure extension, focusing on powers, resources, and follow-up mechanisms. Strengthened committees can transform Parliament into a more deliberative and representative institution, ensuring effective oversight of an increasingly complex governance process.

Topic: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests

Q4. “BRICS must defend the multilateral trading system as a bulwark against economic fragmentation”. Comment. (10 M)

Difficulty Level: Medium

Reference: TH

Why the question
India’s call at the BRICS Foreign Ministers’ meet to defend the multilateral trading system comes amid U.S. tariff hikes and growing protectionism, raising concerns of global economic fragmentation.

Key Demand of the question
The question requires explaining the rationale for BRICS to defend multilateralism and then critically assessing how this defense can function as a safeguard against economic fragmentation.

Structure of the Answer:

Introduction:

Note how WTO-based multilateralism is under stress due to unilateral tariffs and sanctions.

Body:

• Why BRICS must defend multilateralism – its global trade weight, leadership for the Global South, and the need to revive a rules-based order.
• How this defence acts as bulwark – ensuring resilient supply chains, advancing WTO reform, promoting digital and inclusive trade, and reducing North–South asymmetry.

Conclusion:

Close with a futuristic line that BRICS can anchor a more stable and equitable global trade order if its economic leverage is matched with institutional reforms.

Introduction

The credibility of the multilateral trading system under WTO (1995) is under strain due to tariff wars, unilateral sanctions, and non-tariff barriers. At a time when economic fragmentation threatens global supply chains, BRICS — accounting for 32% of global GDP and 41% of population (IMF, 2024) — has a decisive role in upholding inclusive and rules-based trade.

Body

Why BRICS must defend the multilateral trading system

1. Global trade share: BRICS represents a major share of world GDP and exports, giving it systemic responsibility.
   Eg: IMF (2024) – BRICS+ accounts for 32% of global GDP and 25% of world exports.
2. Counter to protectionism: Unilateral tariffs and sanctions undermine predictable trade flows, disproportionately impacting BRICS.
   Eg: US imposed 50% tariff on Indian exports in 2025, in addition to penalties on Russian oil purchases (PTI, 2025).
3. Safeguarding Global South: Multilateralism ensures fairer access for smaller economies aligned with BRICS’ South-South solidarity.
   Eg: India’s Voice of Global South Summit (2023) demanded WTO reforms to protect developing countries.
4. Preserving rules-based order: WTO’s dispute settlement mechanism is essential to prevent arbitrary trade practices.
   Eg: The Appellate Body crisis (2019) crippled WTO enforcement; BRICS called for its restoration at Geneva.
5. Developmental mandate: Open trade supports growth, food security, and sustainable development—core BRICS priorities.
   Eg: BRICS Johannesburg Declaration (2023) linked trade to achieving Agenda 2030 SDGs.

BRICS defence of multilateralism acts as bulwark against economic fragmentation

1. Supply chain stability: BRICS cooperation cushions members against external shocks in food, energy, and technology flows.
   Eg: BRICS Energy Research Cooperation Platform (2022) enhances oil and gas security.
2. Multipolar balance: A united BRICS reduces overdependence on Western-led trade institutions, diversifying markets.
   Eg: BRICS+ expansion in 2023 (Saudi Arabia, UAE, Iran) created new energy-trade corridors.
3. Reform advocacy: Push for WTO reforms bridges the North–South divide and enhances fairness.
   Eg: G-20 New Delhi Declaration (2023) echoed BRICS call for transparent and inclusive trade rules.
4. Strengthening digital trade norms: Joint BRICS initiatives on e-commerce and technology reduce risks of fragmentation in emerging sectors.
   Eg: India’s proposed BRICS Digital Public Infrastructure initiative (2026) to integrate digital trade systems.
5. Promoting inclusive development: Multilateralism ensures equal participation and builds trust among developing economies.
   Eg: BRICS New Development Bank financed 90+ projects worth $30 bn for connectivity and trade (NDB Annual Report, 2024).

Conclusion

BRICS’ defense of multilateralism is not merely an economic safeguard but a strategic necessity to resist great-power unilateralism and tariff volatility. By championing WTO reforms, digital integration, and Global South inclusivity, BRICS can anchor a fair and resilient global trade order in an era of fragmentation.

General Studies – 3

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

Q5. “True self-reliance is not isolation but integration of local strengths with global opportunities”. Critically examine this idea in India’s economic strategy. (15 M)

Difficulty Level: Medium

Reference: TH

Why the question
The Prime Minister recently reiterated the vision of Atmanirbhar Bharat and Swadeshi, raising debates on whether self-reliance means isolation or integration with global supply chains.

Key demand of the question
The question asks you to critically examine India’s economic strategy of self-reliance, evaluate its contradictions, and suggest ways to balance domestic strengths with global opportunities.

Structure of the Answer

Introduction
Briefly explain the modern meaning of self-reliance as competitive integration, not autarky.

Body

• True meaning of self-reliance in India’s economic vision – Atmanirbhar Bharat with global linkages, export-led growth, green swadeshi, strategic autonomy, cultural economy.
• Challenges and contradictions – import dependence, risks of protectionism, weak infrastructure, low R&D, regional disparities.
• Pathways for balance – supply chain diversification, R&D push, trade diplomacy, MSME-digital integration, institutional reforms.

Conclusion
End with a futuristic note on glocalisation and building a resilient, export-driven, innovative economy.

Introduction

Self-reliance today is no longer about isolation but about building resilient domestic capacities that can integrate competitively with global markets. The Atmanirbhar Bharat Abhiyan (2020) reflects this balance of swadeshi strength and international opportunities.

Body

True meaning of self-reliance in India’s economic strategy

1. Atmanirbhar Bharat with global linkages: India is developing domestic industrial ecosystems while actively embedding them into global value chains.
   Eg: PLI scheme (2020) has enabled India to emerge as the world’s second-largest mobile manufacturer, directly supplying to global firms like Apple and Samsung
2. Export-driven growth model: Self-reliance does not mean import substitution alone but creating capacity to serve international demand through competitive exports.
   Eg: India’s merchandise exports touched $450 bn in FY24, the highest ever, proving that domestic production can complement global trade flows
3. Strategic autonomy in critical sectors: India is reducing excessive import reliance in sensitive industries while cooperating with trusted global partners.
   Eg: India-US-Japan semiconductor partnership (2023) seeks to develop chip fabs domestically while securing resilient international technology linkages
4. Sustainable swadeshi for green growth: India’s strategy links local resource strengths with global demand for sustainable solutions.
   Eg: National Green Hydrogen Mission (2023) aims to produce 5 MMT annually by 2030, positioning India as a global supplier of clean fuels
5. Cultural economy and global demand: Reviving traditional industries enhances local identity while tapping global markets for heritage products.
   Eg: Khadi sales exceeded ₹1.5 lakh crore in FY24, with exports reaching over 150 countries, making it both a cultural and economic brand

Challenges and contradictions in current path

1. Import dependence persists: Despite policies, India relies heavily on external suppliers for APIs, electronics and solar components.
   Eg: 65% of bulk drug APIs are imported from China, exposing India’s pharma industry to supply chain shocks
2. Risks of protectionism: High tariffs and localisation pushes sometimes increase input costs and reduce export competitiveness.
   Eg: US tariff hikes on Indian steel and aluminium in 2025 reduced India’s global market share, showing the backlash against protectionist tendencies.
3. Weak infrastructure and logistics: India’s logistics costs remain higher than global competitors, limiting supply chain efficiency.
   Eg: India ranked 38th in World Bank Logistics Index 2023, behind Vietnam and China, undermining trade competitiveness.
4. Low R&D expenditure: India’s innovation ecosystem remains shallow compared to peer economies, constraining value-addition.
   Eg: India’s GERD is just 0.7% of GDP against China’s 2.4%, restricting high-tech exports and global competitiveness
5. Unequal benefits of integration: Self-reliance dividends are concentrated in select regions and sectors, leaving others marginalised.
   Eg: Economic Survey 2023-24 highlighted that nearly 70% of FDI inflows go to five states, widening regional disparities.

Pathways for balancing local strengths with global opportunities

1. Diversified and resilient supply chains: India must avoid dependence on single sources while partnering with trusted nations.
   Eg: Indo-Pacific Economic Framework (IPEF, 2023) provides a platform for supply chain diversification in critical minerals and clean energy technologies.
2. R&D and technology upgrading: Boosting innovation through public-private collaboration will help Indian industries scale globally.
   Eg: National Research Foundation Act, 2023 established a ₹50,000 crore fund to connect industry with universities for high-value research.
3. Trade diplomacy and FTAs: Carefully designed agreements can open new markets while protecting vulnerable sectors.
   Eg: India-Australia ECTA (2022) eliminated tariffs on 96% of Indian exports, boosting competitiveness in textiles and gems.
4. MSME and digital integration: Local entrepreneurs need access to digital platforms to reach wider consumer bases.
   Eg: ONDC (2022) is connecting small retailers and artisans to e-commerce platforms, ensuring their integration into national and global markets.
5. Institutional and fiscal reforms: Competitive federalism and targeted grants can empower states to link local industry with global flows.
   Eg: 15th Finance Commission recommended performance-based grants to incentivise states in boosting exports and innovation capacity.

Conclusion

India’s self-reliance must evolve as integration without vulnerability—leveraging swadeshi strengths to compete globally. The future lies in building an export-driven, innovative and inclusive economy that shapes resilient global supply chains while uplifting domestic growth.

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

Q6. Discuss the macroeconomic factors behind the recent depreciation of the Indian rupee. What policy measures can be adopted to mitigate its adverse impacts? (10 M)

Difficulty Level: Medium

Reference: IE

Why the question
The rupee’s slide to ₹88.75/$ in Sept 2025 amidst FPI outflows and US policy shocks highlights the intersection of global pressures and domestic vulnerabilities, making it a critical macroeconomic concern.

Key Demand of the question
The question requires identifying macroeconomic drivers of rupee depreciation and recommending suitable policy interventions to mitigate its economic fallout.

Structure of the Answer:

Introduction
Contextualise rupee depreciation as a reflection of external headwinds and internal imbalances.

Body

• External factors driving depreciation such as global monetary tightening, trade tensions, and dollar strength.
• Domestic factors including inflation differential, CAD pressures, and capital market volatility.
• Policy measures across monetary, fiscal, trade, and structural dimensions to stabilise the rupee.

Conclusion
Suggest future-oriented solutions emphasising resilience and credibility of India’s macroeconomic framework.

Introduction
Currency depreciation in India is not just a reflection of domestic imbalances but also of global monetary shifts, with the rupee recently hitting ₹88.75/$ in Sept 2025, marking the lowest ever and exposing multiple vulnerabilities.

Body

Macroeconomic factors behind rupee depreciation

1. FPI outflows due to trade uncertainties: Large foreign portfolio investors pulled out over ₹61,522 crore in just three months, primarily due to tariff hikes and policy unpredictability, creating downward pressure on INR.
   Eg: NSDL (Sept 2025) reported sustained equity outflows that pushed India to the bottom among Asian peers in terms of currency performance.
2. Strong dollar index: The US dollar has appreciated sharply with the DXY hovering around 107, driven by higher Fed rates, making capital shift towards safer dollar assets and weakening emerging market currencies including the rupee.
   Eg: US Fed minutes (Aug 2025) suggested a “higher for longer” stance on rates, which redirected global funds towards US treasuries.
3. Rising import bill and current account deficit: A surge in crude and gold imports has widened the CAD beyond 2% of GDP in Q1 FY26, increasing demand for dollars and adding to rupee pressure.
   Eg: Petroleum Planning and Analysis Cell (2025) highlighted higher import bills due to elevated oil prices despite slower domestic demand growth.
4. Services export risk: The H-1B visa fee hike from $1,000 to $100,000 for new applicants has raised concerns of slowing IT services exports, potentially weakening India’s strong remittance inflows.
   Eg: NASSCOM (2025) warned that Indian IT firms may lose cost competitiveness in the US market, risking a decline in dollar earnings.
5. Persistent inflation differential: India’s inflation at 5.4% (Aug 2025, MOSPI) versus 2.5% in the US makes the rupee structurally weaker by eroding competitiveness, reinforcing long-term depreciation trends.
   Eg: Historical RBI analysis has shown that sustained inflation differentials of over 2% tend to create continuous depreciation pressure on INR.

Policy measures to mitigate adverse impacts

1. Calibrated RBI intervention: The RBI can utilise its $650 bn forex reserves (Aug 2025) for smoothing volatility, while avoiding excessive depletion that could undermine market confidence.
   Eg: RBI’s 2013 taper tantrum playbook demonstrated that measured intervention combined with monetary tightening helped stabilise the rupee.
2. Strengthening FDI inflows: Encouraging long-term FDI through easier norms in critical sectors can offset volatile FPI flows and ensure durable forex inflows.
   Eg: Arvind Mayaram Committee had recommended simplified FDI approvals, which if implemented widely, could attract stable capital.
3. Diversifying export markets: By actively pursuing FTAs with ASEAN, Africa and EU, India can reduce dependence on US-centric service exports and broaden dollar inflows.
   Eg: India-EU FTA (2025) is projected by Commerce Ministry to boost bilateral trade by nearly $100 bn over the next decade.
4. Fiscal prudence and credible policy signals: Maintaining fiscal deficit around 5.1% of GDP (Budget 2025-26) ensures global investors’ trust in India’s stability, reducing risk-premiums on rupee assets.
   Eg: FRBM Review Committee (2017, N.K. Singh) stressed fiscal credibility as a foundation for exchange rate stability and capital inflows.
5. Hedging and digital rupee adoption: Promoting hedging tools for corporates and expanding CBDC pilots can reduce external shocks while deepening forex markets.
   Eg: RBI digital rupee pilot (2025) covering 26 banks has already enhanced retail payment resilience and can ease dollar demand in cross-border flows.

Conclusion
A resilient rupee cannot be built by interventions alone; it requires structural reforms, diversified trade, and fiscal credibility, turning short-term volatility into an opportunity to enhance India’s global economic standing.

General Studies – 4

Q7. What does the given quotation convey to you in the present context? (10 M)

“There is no witness so dreadful, no accuser so terrible as the conscience that dwells in the heart of every man”. –Polybius

Difficulty Level: Medium

Reference: InsightsIAS

Why the question
To test the ethical understanding of conscience as a moral guide, its psychological and social dimensions, and its relevance in today’s governance, law, and personal conduct.

Key demand of the question
Explain the meaning of the quotation in terms of conscience as a regulator of human action, and analyze its significance in present-day contexts such as governance, corporate ethics, constitutional morality, and global responsibility.

Structure of the Answer

Introduction:

Briefly define conscience as an inner moral compass and link it to ethical behaviour.

Body

• Meaning of the quotation: Show how conscience works as an internal judge, causes guilt, ensures responsibility, prevents wrongdoing, and sustains integrity.
• Relevance in present context: Connect conscience with public service ethics, corporate governance, constitutional morality, crisis response, and global ethical duties.

Conclusion

End with a forward-looking note on nurturing conscience through education, constitutional morality, and value-based training for a just society.

Introduction

Conscience is the inner moral voice that constantly evaluates human actions. Unlike external punishments, it cannot be escaped, making it a powerful regulator of ethical behaviour in personal, professional, and public life.

Body

Meaning of the quotation

1. Conscience as inner judge: It acts as an unbiased witness that holds one accountable even in secrecy.
   Eg: Mahatma Gandhi often referred to his “inner voice” before making ethical decisions in political life.
2. Guilt as inescapable punishment: A guilty conscience causes psychological suffering stronger than legal penalties.
   Eg: Ashoka’s remorse after Kalinga war led him to adopt Dhamma over violence.
3. Conscience ensures true responsibility: It emphasizes moral obligation over mere legal compliance.
   Eg: Whistleblowers exposing scams like the 2G case acted on conscience beyond fear of repercussions.
4. Prevents corruption and wrongdoing: Even when not monitored, conscience stops individuals from abusing authority.
   Eg: Honest civil servants follow the CCS (Conduct) Rules, 1964 out of personal integrity, not fear of punishment.
5. Basis of integrity and trust: Conscience sustains truthfulness and transparency, essential for leadership.
   Eg: Second ARC report (2007) recommended ethics training for civil servants to strengthen conscience-driven behaviour.

Relevance in the present context

1. Public administration: For civil servants, conscience ensures probity in governance when institutions face pressure.
   Eg: SC in Vineet Narain (1997) highlighted integrity in investigative bodies like CBI.
2. Corporate governance: Conscience curbs profit-driven malpractice and promotes social responsibility.
   Eg: Infosys whistleblower framework empowers employees to act according to conscience.
3. Constitutional morality: Conscience strengthens adherence to justice, equality, and liberty beyond majority opinion.
   Eg: Navtej Johar case (2018) where SC invoked constitutional morality to decriminalize Section 377.
4. Crisis decision-making: Conscience guides ethical action during emergencies when laws are inadequate.
   Eg: COVID-19 frontline officials distributing relief despite rigid procedures showed conscience-driven service.
5. Global ethical responsibility: Conscience pushes nations to act beyond self-interest for climate justice and human rights.
   Eg: Paris Agreement (2015) reflects collective conscience for environmental sustainability.

Conclusion

Conscience is the ultimate moral tribunal that no law can override. In an age of rising institutional distrust, nurturing conscience through ethical education, civil service training, and constitutional morality is vital for building a just, accountable, and humane society.

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