Module 1

Q1. Bring out the important characteristics of the Indian economy.

Answer: Agro-Based Economy:
The Indian economy is absolutely agro-based. Close to 14.2 % of Indian
GDP is contributed by farming and unified areas, while 53% of the total
populace of the nation relies on the horticulture sector.

Overpopulation:
Overpopulation is one of the main pressing issues of the Indian economy.
The number of inhabitants in India expands by around 20% in every
decade consistently. Around 17.5% of the total populace is owned by India.

Incongruities in Income:
The most disturbing thing in the Indian economy is the convergence of
abundance. As per the most recent report, 1% of Indians own 53% of the
abundance of the country’s wealth. Among these, the top 10% claim a
portion of 76.30%. The report expresses that 90% of the nation claims
under a fourth of the nation’s wealth.

Destruction in Capital Formation:

The rate of capital development is emphatically associated with lower
levels of pay or income. There is a tremendous decrease in Gross
Domestic Capital contrasted with the earlier years.

Poor Infrastructural Development:

According to a new report, around 25% of Indian families can’t acquire
electricity, and 97 million individuals can’t acquire safe drinking water.
Sanitation administrations can’t be acquired by 840 million individuals.
India requires 100 million dollars to dispose of this infrastructural
abnormality.

Imperfect Market:
Indian markets are defective or imperfect in nature as it falls short in the
absence of portability, mobility, or movement, starting with one spot then
onto the next, which gets the ideal use of assets. Thus, fluctuations in
prices occur.

Endless Loop of Poverty:

India is an ideal illustration of the term ‘A nation is poor since it is poor’.
The endless loop of neediness or poverty traps these types of developing
countries.

Obsolete Technology:
Indian creation of work is labour-intensive in nature. There is an absence
of innovations and modern machinery.
Backward Society:
Indian social orders are caught in the scourge of communalism,
male-dominated society, odd notions, caste system framework, and so
forth. The above factors are the significant limitation of the development
of the Indian economy.

Low Per Capita Income:

The per capita pay of India is considerably less than that of the other
developing nations. As indicated by the assessments of the Central
Statistics Office (CSO), the per capita net public income of India at
present costs for the year 2020-21 (based on 2011-12 prices) was around Rs.
86,659.

Q2.Indian economy is regarded as an emerging market economy.

Answer: Today, India is considered as the world’s sixth-largest economy by
nominal GDP and the third-largest by purchasing power parity. According
to several studies, India’s growth rate should stabilise at 8% during the
next decades, ranking the country as the world’s fastest-growing
economy. Its GDP could overtake that of the US before 2050, turning India
into the strongest economy worldwide.
India’s key growth factors are:
a young and rapidly growing working-age population,
rising education and engineering skill levels, accentuating growth in the
manufacturing sector,
a rapidly growing middle-class, implementing a sustained growth of the
consumer market.

India’s economic strengths

India’s economy is distributed as followed:
Agriculture: 17,4% of GDP, 49% of employment;
Industry: 25,8% of GDP, 20% of employment;
Services: 56,9% of GDP, 31% of employment.

Agriculture
Today, India ranks second worldwide in farm output and seventh in
agricultural exports. The country is part of the world’s top 3 producers of
tea, coffee, sugar, cereals, spices and many other staple foods such as rice,
wheat and potatoes.

Industry
India’s economy today relies mainly on a few industry markets:
Telecommunication industry, which is now the world’s fastest growing
and which surpassed the US in 2017 to become the second largest
smartphone market in the world after China,
Automotive industry, which is now the world’s second fastest growing,
Pharmaceutical and biotechnology industry, which is among the world’s
most significant emerging markets (India is the world’s first generic drugs
producer and exporter yet).
Other major Indian industries include computer science, construction
industry, chemicals, food processing, steel, transport equipment, cement,
mining, petroleum, machinery, tourism and manufacturing industries
such as textile.

Exports and Imports

In 2006, the share of external trade in India’s GDP stood at 24%, up from
6% in 1985. Today, India ranks 10th worldwide in global exports. Main
exportation include:
Petroleum products (42% from total exports in 2011, against 14% in 2001),
Textile goods (2nd worldwide),
Jewellery,
Software,
Engineering goods,
Chemicals.
India is also the world’s 10th largest importer, with major imports
including crude oil, machinery, fertilisers and chemicals.

Spatial
Although India is not amongst the most evolved countries regarding
spatial activity, it eventually sent a first rocket in 2007 and now owns nine
operational geostationary satellites, which consequently helped improve
tele-education and medicine for the people.

Employment
The Indian labour force is the world’s second largest, with 513,7 million
workers, which is almost 40% of the population. Today, employment in
India is distributed as such:
Services : 31%
Industry : 20%
Agriculture: 49%
Unemployment rate: 8,8%
Q3. Write a note on structural changes in India since 1991.

Answer” India’s reform strategy launched in July 1991 provided a

combination of macroeconomic stability and structural adjustment. It is
guided by short-term and long-term goals. In order to restore the balance
of payments and curb inflation, stability is needed in the short term. At
the same time, changing the structure of the institution itself through
reform is equally important in the long run.
The new government took urgent action to implement a macroeconomic
stabilisation plan through fiscal adjustment. In addition, structural
reforms were initiated in the areas of trade, industry and the public sector
(public sector contraction).
Economic reform or structural adjustment is a multidimensional set of
different long-term policies (liberalisation, privatisation and globalisation)
directed towards rapid growth, productivity and creating a competitive
environment.

New Economic Policy

The Indian government implemented economic reforms in 1991:
Stabilisation Measures: These are short-term measures taken by the
government to curb rising prices, unfavourable balance of payments and
falling foreign exchange reserves.
Structural Adjustment: This is a long-term policy aimed at improving the
efficiency of the Indian economy and enhancing its international
competitiveness by removing rigidities in various sectors of the Indian
economy.
In the New Economic Policy of 1991, structural reforms can be treated with
respect.
Liberalisation: Liberalisation means removing all unnecessary controls
and restrictions such as permits, licences, protectionist rights quotas, etc.
In other words, it can be defined as relaxation of governmental rules. A
country’s regulations allow private sector companies to conduct business
transactions with fewer restrictions.
A by-product of this reform has been an increase in foreign exchange
reserves, which according to the RBI’s annual report, were largely the
result of earlier foreign direct investment.
Privatisation and Contraction of Public Sector: In the new economic policy
privatisation of the economy was given more emphasis. Privatisation is a
process by which the public sector undertakings are increasingly brought
under private ownership. It promotes consumer sovereignty. A high
degree of consumer sovereignty means wider choice and better quality of
goods and services. Increasing privatisation reduces the role of the public
sector in the economy.
Globalisation: Globalisation can be defined as a process that involves
increasing openness, increasing economic interdependence and
deepening economic integration into the global economy.
Policies which promoted globalisation:
Raising the foreign investment limit
Partial convertibility
Long-term trade policy
Tariff reduction

Major Steps in 1991 Reforms

The Government of India has taken the following major measures:
Fiscal Reform: An important part of stabilisation efforts is restoring fiscal
discipline. Data show that budget deficit in 1990-1991 was 8.4% of GDP.
The 1991-1992 budget took a bold step toward correcting fiscal
imbalances. It called for a nearly two percentage point reduction in the
budget deficit as the percentage of GDP decreased from 8.4% in
1990-1991 to 6.5% in 1991-1992.
Financial Sector and Monetary Reforms: Monetary reforms aimed at
removing interest rate distortions and rationalize the structure of lending
rates. The new policy attempts a variety of approaches to improve the
efficiency of the banking system.
Capital Market Reform: The Narasimham Committee recommended
reforms to capital markets aimed at removing direct government
oversight and replacing it with a regulatory framework based on
transparency and disclosure overseen by an independent regulator. The
Securities and Exchange Board of India (SEBI) was established in 1988 and
was legally recognized in 1992 on the recommendation of the
Narasimham Commission.
Industrial Sector Reforms: The industrial sector reforms include:
contraction of public sector; abolition of licensing; freedom to import
capital goods.
The new economic policy favoured the contraction of the scope of public
sector industries and simultaneously increasing the role of the private
sector. The number of public sector undertakings under the government
of India was reduced from 17 industries to 8, with the current status being
only 3.
Free entry of foreign investment
Many measures have been taken to attract foreign investment. Some of
them are:
51% of foreign investment in 34 high-priority industries was unsanctioned
by the government in 1991.
Non-Resident Indians (NRIs) are allowed to invest 100% in export houses,
hospitals, hotels, etc.
The establishment of the Foreign Investment Promotion Board (FIPB) to
rapidly approve foreign investment proposals.
The previous restrictions on the repatriation of dividends by foreign
investors have been removed. They can now take home the bonus.
Rationalization of Exchange Rate Policy: One of the important measures
taken to improve the balance of payments situation is the depreciation of
the rupee. In the first week of July 1991, the rupee depreciated by about
20%. Its purpose is to bridge the gap between real and nominal exchange
rates caused by rising inflation, thereby making exports competitive.

Conclusion
The economic reforms of 1991 focused on the formal sector, so we saw a
strong boom in liberalization. Sectors such as telecommunications and
civil aviation have benefited greatly from deregulation and subsequent
reforms. However, economic liberalization and reform still have a long way
to go, especially for the informal sector, including the urban poor who
work as street vendors or rickshaw drivers, the agricultural sector, micro,
small and medium enterprises (MSMEs) and indigenous peoples. The slow
growth and stagnation of these unreformed sectors emphasise the
important role of the 1991 reforms in helping India’s economy develop into
what it is today.

Q4. Highlight magnitude of poverty and income inequality in India.

Suggest causes and meaures for it.

Answer: Income inequality

Income Inequality In India

Context
Income inequality is at an all-time high and is growing unabated.
Rising inequality and unemployment are creating ruptures in the fragile
fabric of our society.
Background
In the global level where 82% of the wealth generated last year worldwide
went to the 1%, while 3.7 billion people that account for the poorest half of
the population saw no increase in their wealth, the survey said. Also,
Billionaire wealth has risen by an average of 13% a year since 2010 – six
times faster than the wages of ordinary workers, which have increased by
a yearly average of just 2%.
India’s richest 1% acquired 73% of the total wealth created in the country
in 2017, as per a new survey by international rights group Oxfam.
67 crore Indians, which comprises the population’s poorest half, saw their
wealth hike by only 1% in 2017 according to the same report.
World Inequality Lab report 2020, both India and China, income
inequality substantially grew after the economic liberalisation of the
1980s.
In India, the top 10% income share grew from 30% in the 1980s to over 56%
in 2019, while in China, the top 10% share grew from 28% in 1980 to 41% in
2019
In India, this is also more problematic due to the prevalence of caste
system and regional imbalances.
A study jointly conducted by a few Indian universities found that Only 22.3
per cent of the upper caste Hindus own 41 per cent of the country’s total
wealth and form the richest group, whereas 7.8 per cent of Hindu
Scheduled Tribes own the lowest share of the country’s assets at 3.7 per
cent.
The study also highlighted that five states — Maharashtra, Uttar Pradesh,
Kerala, Tamil Nadu and Haryana — owned about 50 per cent of the
country’s total wealth.
Reasons for Income Inequality
There a many reasons for the rise in income equality in India some of
them are as follows:
The rise of a rentier class that seeks to maximise its leverage in fixed
assets such as lands and property to extract as much as income as
possible
With a 2019 study by the Reserve Bank confirming that housing
affordability has significantly deteriorated over the last four years, it is
unsurprising how millennials now choose to rent rather than bear the
increasingly unaffordable burden of high EMIs.
Unemployment is also a major reason for the low productivity of labour
which can push many into poverty. It is a fact that inequality, poverty and
unemployment are related to each other. The lack of sufficient
employment not being created in time is the reason why there is an
income gap today between classes.
During inflation, less profit is made and wage earners are the ones who
bear the losses. While profits are on the rise, the wages have remained
more or less the same. Also, while money income rises, real income falls,
leading to a decrease in the overall standard of living.
High tax rates are re­sponsible for inequality in the distribution of in­come
and wealth. This is due to undue concentra­tion of incomes in a few hands
caused by large- scale tax evasion.

Way Forward
Government has to ensure that its policies address these causes and
ensure the creation of a free and fair market.
Quality of public services like health and education is also a great leveller
and the government must also focus in this regard.
The Central government and NITI Aayog should evolve policies to correct
inequalities between states and bring out cooperative federalism in its
true form.
A comprehensive plan to promote inclusive growth is the only solution to
address the income inequality problem in India.
Poverty
Poverty is a state or condition in which a person or community lacks the
financial resources and essentials for a minimum standard of living.
Poverty means that the income level from employment is so low that
basic human needs can't be met.
According to World Bank, Poverty is pronounced deprivation in
well-being, and comprises many dimensions. It includes low incomes and
the inability to acquire the basic goods and services necessary for survival
with dignity. Poverty also encompasses low levels of health and
education, poor access to clean water and sanitation, inadequate physical
security, lack of voice, and insufficient capacity and opportunity to better
one's life.
In India, 21.9% of the population lives below the national poverty line in
2011.
In 2018, almost 8% of the world’s workers and their families lived on less
than US$1.90 per person per day (international poverty line).

Causes of Poverty in India

Population Explosion: India’s population has steadily increased through
the years. During the past 45 years, it has risen at a rate of 2.2% per year,
which means, on average, about 17 million people are added to the
country’s population each year. This also increases the demand for
consumption goods tremendously.
Low Agricultural Productivity: A major reason for poverty in the low
productivity in the agriculture sector. The reason for low productivity is
manifold. Chiefly, it is because of fragmented and subdivided land
holdings, lack of capital, illiteracy about new technologies in farming, the
use of traditional methods of cultivation, wastage during storage, etc.
Inefficient Resource utilisation: There is underemployment and disguised
unemployment in the country, particularly in the farming sector. This has
resulted in low agricultural output and also led to a dip in the standard of
living.
Low Rate of Economic Development: Economic development has been
low in India especially in the first 40 years of independence before the
LPG reforms in 1991.
Price Rise: Price rise has been steady in the country and this has added to
the burden the poor carry. Although a few people have benefited from
this, the lower income groups have suffered because of it, and are not
even able to satisfy their basic minimum wants.
Unemployment: Unemployment is another factor causing poverty in
India. The ever-increasing population has led to a higher number of
job-seekers. However, there is not enough expansion in opportunities to
match this demand for jobs.
Lack of Capital and Entrepreneurship: The shortage of capital and
entrepreneurship results in low level of investment and job creation in the
economy.
Social Factors: Apart from economic factors, there are also social factors
hindering the eradication of poverty in India. Some of the hindrances in
this regard are the laws of inheritance, caste system, certain traditions,
etc.
Colonial Exploitation: The British colonisation and rule over India for about
two centuries de-industrialised india by ruining its traditional handicrafts
and textile industries. Colonial Policies transformed india to a mere
raw-material producer for european industries.
Climatic Factors: Most of india’s poor belong to the states of Bihar, UP, MP,
Chhattisgarh, odisha, Jharkhand, etc. Natural calamities such as frequent
floods, disasters, earthquake and cyclone cause heavy damage to
agriculture in these states.
Way Forward:
The government must provide transparency and accountability to various
organizations that are responsible for the implementation of the Welfare
Schemes.
Infrastructure development and skills development must be made a top
priority.
More govt expenditure in health, nutrition, and education.
The problem of the inability to determine the poverty line must be
resolved to help the target population.
Direct income transfer to the needy is an immediate solution. Universal
Basic Income should also be considered.
Investment in Agriculture by the government is necessary to decrease
rural poverty. Subsidies address only short-term issues. Also, there is a
need to develop technologies, with the help of which farmers can practice
all-weather agriculture.
Employment-oriented growth: create jobs in modern sectors and
promote labour-intensive industries.
Reduce corruption for efficient service delivery.
Resilience for poor households to withstand major shocks: through
holistic, multi-faceted intervention designed to help people lift
themselves from extreme poverty by providing them with the tools, skills,
and resources required to deal with the challenges that keep them
trapped in a state of destitution. In addition to providing assets such as
livestock, the government should also provide livelihood and financial
skills training to make these assets productive; personal coaching to instill
confidence and hope; basic health care for families, and more.
Module 2.
Q1. Write a note on non-conventional energy development of India
Answer: Non-Conventional Energy Resources in India
India is endowed with non-traditional energy sources such as sunlight,
water, wind, and biomass.
Furthermore, the growing demand for energy has led to the country's
reliance on fossil fuels such as oil, coal, and gas. In this regard, the
potential shortage of gases and oil has raised concerns as a result of rising
energy prices.
The growing demand for energy has made the country reliant on fossil
fuels such as coal, oil, and gas.
Potential oil and gas shortages due to price increases and
over-exploitation of energy, raising concerns about the future security of
energy supply.
Furthermore, the increased use of fossil fuels causes serious
environmental issues.
As a result, there is an urgent need to use renewable energy sources such
as solar energy, wind energy, tide energy, biomass, and waste energy.
These are referred to as non-conventional energy sources.
It has the most extensive programs for the development of renewable
energy resources.
Non-Conventional Energy Resources are:
Solar Energy
Wind power
Biogas
Tidal Energy
Geothermal Energy

Solar Energy
India is a tropical country. It has enormous potential for harnessing solar
energy. Photovoltaic technology directly converts sunlight into electricity.
Solar energy is quickly gaining popularity in rural and remote areas.
Madhapur, near Bhuj, is home to India's largest solar plant, where solar
energy is used to sterilise milk cans.
The use of solar energy is expected to reduce rural households' reliance
on firewood and dung cakes, contributing to environmental conservation
and an adequate supply of manure in agriculture.
The capacity of the National Thermal Power Corporation Limited (NTPC)
project would be nearly double that of Rajasthan's Bhadla solar park,
which is currently the country's largest single-location solar power plant.
NTPC hopes to have built 60 GW (gigawatts) of renewable energy
capacity by 2032.
Several solar-powered devices are available on the market and are widely
used in rural India.

Wind power
India is now regarded as a global "wind superpower."
Winds are formed when air moves from warmer to colder areas, and
these airflows are captured in windmills and wind turbines to generate
electricity.
Wind energy is not a new discovery; it has been used for millennia in the
form of traditional windmills to grind maize, pump water, and sail ships.
Wind power can now be used to generate energy on a larger scale thanks
to advances in technology.Tamil Nadu has the largest wind farm cluster,
stretching from Nagercoil to Madurai.
Apart from these, important wind farms can be found in Andhra Pradesh,
Karnataka, Gujarat, Kerala, Maharashtra, and Lakshadweep.
Nagarcoil and Jaisalmer are well-known in the country for their effective
use of wind energy.
According to the Indian Meteorological Department, the average annual
wind velocity in peninsular India is 6.5-8 m/s along the coastlines of
Gujarat, the Western Ghats, and some parts of central India.

Biogas
In rural areas, shrubs, farm waste, animal and human waste are used to
generate biogas for domestic consumption.
Organic matter decomposition produces gas, which has a higher thermal
efficiency than kerosene, dung cake, and charcoal.
Municipal, cooperative, and individual biogas plants exist. In rural India,
plants that use cattle dung are known as 'Gobar gas plants.'
These provide the farmer with two benefits: energy and improved
manure quality. By far the most efficient use of cattle dung is biogas.
It improves manure quality while reducing tree and manure loss from the
combustion of fuel wood and cow dung cakes.
The Indian government intended to build approximately 5,000
Compressed Biogas (CBG) plants across the country by 2023, with the
following feedstock.
Biogas is an excellent and effective way to promote rural development in
developing countries such as India.

Tidal Energy
Tides in the ocean can be used to generate electricity. Floodgate dams
are constructed across inlets.
Water flows into the inlet during high tide and becomes trapped when
the gate is closed.
When the tide falls outside the flood gate, the water retained by the
floodgate flows back to the sea via a pipe that passes through a turbine
that generates electricity.
The Gulf of Kachchh in India provides ideal conditions for utilising tidal
energy.
The National Hydropower Corporation is constructing a 900 MW tidal
energy power plant here.
According to a 2014 study conducted by the Indian government, India has
a tidal power potential of 12.5 gigatonnes spread across the coastlines of
Gujarat, Tamil Nadu, and West Bengal..

Geothermal Energy
Geothermal energy is the heat and electricity generated by using heat
from the Earth's interior.
Geothermal energy exists because the Earth's temperature increases with
depth. High temperatures are found at shallow depths where the
geothermal gradient is steep.
In such areas, groundwater absorbs heat from the rocks and becomes
hot. It's so hot that when it reaches the earth's surface, it condenses into
steam. This steam powers turbines and generates electricity.
In India, there are hundreds of hot springs that could be used to generate
electricity.
In India, two pilot projects to harness geothermal energy have been
established.
The first is in the Parvati Valley near Manikaran in Himachal Pradesh, and
the second is in the Puga Valley in Ladakh.
Q2. Bring out significance of social infrastructure in economic
development.
Answer: Well, social infrastructure has its own importance. It helps in the
development of the economy of the nation and also improves the quality
of life of the people. There are people who live in slums and are below the
poverty line. These social infrastructures help in providing facilities to
these people so that they can have a quality check-up in good hospitals.

In addition to this, various medical camps are also organized by the

government. These camps are held for free and people from different
areas come and get themselves checked up. Social infrastructures hence
play a vital role in the development of the economy.
Social infrastructures do help in the development of the economy but
they also play a crucial role in the education sector. The students from the
lower-middle-class sections study hard and gain admission in the
Government schools and colleges.
The fee of government colleges and schools are relatively very low as
compared to private schools and universities. Moreover, they get jobs
further in the government sector including the jobs of a clerk, park
organizer, sweeper, operator and many more.
Mid-day Meals were also initiated by the government in 1995 providing
lunch to the children in school. This is also a kind of social service of
providing food to the children of lower sections of the society. There are a
number of institutes that offer higher education to the students from
these sections of society thereby, increasing the literacy rate.
The literacy rate in India in the year 1991 was 52.2% which further
increased to 74.04% in the year 2012. The current literacy rate is 77.7%.
When the literacy rate goes up, the economy is automatically developed.
Thus, these social structures play a key role in educating the nation.
Everything is interconnected in terms of quality, the standard of living,
education and economic development. When people are educated, it
adds to the literacy rate of the nation. People get a good career and job
opportunity which in turn adds to economic development.
The economic development of the nation is directly proportional to the
quality of life the people live. Social infrastructures provide facilities to the
people who cannot afford quality education or medications. As a result,
with the help of these social infrastructures, there is an increase in
employment opportunities.
These infrastructures also play a crucial role in national defence activities.
With economic development the trade increases and improves. Thus,
these infrastructures are built for these kinds of people who can improve
their standard of living.There are some pointers that you can refer to if you
want to know the role of social and economic infrastructure.
1. Agriculture:
With the help of these social and economic infrastructures, there is a
development of agriculture in terms of irrigation machinery, power,
marketing, transport facilities and many more.
2. Industry:
The industrial sector also develops with the development of
infrastructures. Along with all the advancements and availability
equipments, there is an increase in manpower, management,
transportation, banking and many more.
3. Increase in Productivity:
The development in the transportation and education sectors leads to an
increase in productivity. Economic productivity is seen in terms of science
and technology along with extensive research work.
4. Development of Lower Classes:
The people residing in chawls and slums are in the dire need of these
infrastructures which leads to the development of the backward classes.
The social and economic infrastructures play a key role in the
development of these regions as quality services and facilities are
provided to these people at a very low rate or for free.
Q3. Explain how HDI is measured. Comment on recent debates on HDI.
Answer: The Human Development Index (HDI) is a composite statistics of
life expectancy, education, and income indices to rank countries into four
tiers of human development. It was created by economist
Mahbub-ul-Haq, followed by economist Amartya Sen in 1990, and
published by the United Nations Development Programme (UNDP).
In its 2010 Human Development Report, the UNDP began using a new
method of calculating the HDI. The following three indices are used:
1. Life Expectancy Index
2. Education Index: It includes
a. Mean Years of Schooling Index
b. Expected Years of Schooling Index
Indian Perspective:
Human Development Index: India’s HDI value stood at 0.633 in 2021,
which was lower than the world average of 0.732. In 2020, too, India
recorded a decline in its HDI value (0.642) in comparison to the pre-Covid
level of 2019 (0.645).
Life expectancy: In 2021, India’s life expectancy at birth was recorded at
67.2 years.
Schooling: Expected years of schooling at 11.9 years, mean years of
schooling at 6.7 years,
Gross National Income: The gross national income per capita stood at
USD 6,590.
Gender Inequality Index: India has been ranked 122 on the Gender
Inequality Index.
Other insights:
Humans are not prepared for climate change: It stated that humans were
unprepared for a world with climate crises like fires and storms and other
planetary-level changes brought about due to the Anthropocene in
recent years.
Population Decline of Insects: Without an abundance of insect pollinators,
humans face the mind-boggling challenge of growing food and other
agricultural products at scale.
As insects are important because of their diversity, ecological role and
influence on agriculture, human health and natural resources.
They create the biological foundation for all terrestrial ecosystems,
further, they cycle nutrients, pollinate plants, disperse seeds, maintain soil
structure and fertility, control populations of other organisms and provide
a major food source for other taxes.
Microplastic menace: Plastics are now everywhere, in country-sized
garbage patches in the ocean, in protected forests and distant
mountaintops and in people’s lungs and blood.
MODULE 3.
Q1. bring out the significance of MSME sector. State the problems faced
by MSME units and suggest way forward.
Answer: The MSME sector comprises micro, small and medium
enterprises that are classified according to certain parameters. Before
2018, MSMEs were categorised based on the amount invested. After a
change in regulations, they are classified based on their annual turnover,
whether they operate in the manufacturing or service sector. The new
conditions are as follows. Micro enterprise: When annual turnover is up to
Rs. 5 crore Small enterprise: When annual turnover is above Rs. 5 crore
and less than Rs. 75 crore Medium enterprise: When annual turnover is
above Rs. 75 crore and less than Rs. 250 crore
MSME has introduced in the year 2006 in India. There are still some
service sector that was not yet included in this sector was included in the
definition of the Micro, Small and Medium-sized Enterprises making a
historic change to this Act. Therefore leveraging the scope of the sector
even now government simplified the MSME Registration online with the
paperless work.
The further Importance of MSME in India has been described below:
It creates large-scale employment: Enterprises that are inclusive in this
sector require low capital to start up new business. Moreover, it creates a
vast opportunity for the unemployed people to avail. India produces
about 1.2 million graduates per year out of which the total number of
engineers are around 0.8 million. There is no economy so far that could
provide that large number of freshers in one year only. MSME is the boon
for the fresh talent in India.
Economic stability in terms of Growth and leverage Exports: It is the most
significant driver in India contributing to the tune of 8% to GDP.
Considering the contribution of MSME to manufacturing, exports, and
employment, other sectors are also benefitting from it. Nowadays, MNCs
are buying semi-finished, and auxiliary products from small enterprises,
for example, buying of clutches and brakes by automobile companies. It is
helpful in creating a linkage between MSME and big companies even
after the implementation of the GST 40% MSME sector also applied GST
Registration that plays an important role to increase the government
revenue by 11%.
Encourages Inclusive Growth: The inclusive growth is at the top of the
agenda of Ministry for Medium, and small and Medium-sized enterprises
for several years. On the other hand, poverty and deprivation are a
deterrent to the development of India. Besides, it includes marginalized
sections of a society which is a key challenge lying before the Ministry of
MSME.
Cheap Labor and minimum overhead: While in the large-scale
organizations, one of the main challenge is to retain the human resource
through an effective human resource management professional
manager. But, when it comes to MSME, the requirement of labour is less
and it does not need a highly skilled laborer. Therefore, the indirect
expenses incurred by the owner is also low.
Simple Management Structure for Enterprises: MSME can start with
limited resources within the control of the owner. From this decision
making gets easy and efficient. On the contrary, a large corporation
requires a specialist for every departmental functioning as it has a
complex organizational structure. Whereas a small enterprise does not
need to hire an external specialist for its management. The owner can
manage himself. Hence, it could run single-handedly.
The main role in the mission of “Make in India”: The signature initiative by
the Prime Minister of India “Make in India” has been made easy with
MSME. It is taken as a backbone in making this dream a possibility. In
addition, the government has directed the financial institution to lend
more credit to enterprises in the MSME sector.
PROBLEMS OF MSME`S IN INDIA Presently, the Indian MSME`S are
facing different types of problems. Most of the problems are controllable
while rests are uncontrollable. Based on data analysis and study of the
related literature the MSME`S problems can explain as follows:-
1. Lack of credit from banks-The MSME`S are presently facing the
problems of credit from the banks. The banks are not providing the
adequate amount of loan to the MSME`S. The loan providing process of
the banks is very long and formalistic. The owners of the MSME`S has to
produce different types of documents to prove their worthiness. The
banks are providing on an average 50% total capital employed in fixed
assets (TABLE- F). The cost of credit is also high.
2. Competition from multinational companies- In present era of
globalization, the MSME`S are facing the great from the international
manufacturing companies who are proving quality goods at cheapest
price. Therefore, it is very difficult to compete with the multinational
companies.
3. Poor infrastructure-Though, MSME`S are developing so rapidly but their
infrastructure is very poor. With poor infrastructure, their production
capacity is very low while production cost is very high.
4. Unavailability of raw material and other inputs- For MSME’s required
raw material skilled work force and other inputs, which are not available
in the market. Due to unavailability of these essentials, it is very difficult to
produce the products at affordable prices.
5. Lack of advanced technology-The owners of MSME`S are not aware of
advanced technologies of production. Their methodology of production is
outdated. The owners are using older method in the field of fabricated
metal and textile.
6. Lack of distribution of marketing channels-The MSME`S are not
adopting the innovative channels of marketing. Their advertisement and
sales promotion are comparatively weaker than the multinational
companies are. The ineffective advertisement and poor marketing
channels leads to a very poor selling.
7. Lack of training and skill development program- The training and
development programs in respect of MSME`S development concern is
very low .So, skilled manpower is not being available to MSME`S. The
owners are aware of the innovative methods of production. The skill
developmental schemes conducted by the government are not sufficient.
8. Complex labour laws and red-tape-All the laws related to the all aspects
of manufacturing and service concern are very complex and compliance
with these laws are practically difficult .The various decisions of factory’
are depend upon the factory commissioner and inspector, so there are so
many chances of red tape in the operation of MSME’S.
Solutions:
1. Mutual Supply of Technologies: A number of appropriate technologies
for the MSME sector have developed in various sectors. While each MSME
has its areas of strengths and weaknesses, therefore, it would be mutually
valuable if already developed technologies made available to each other.
A comprehensive list of all sorts of technologies should be prepared and
made available accordingly to the MSMEs requiring it.
2. Constitution of a Panel of Consultants: For the purpose of technological
advancement and guidance a panel of experts and consultants should be
prepared, who can help the MSMEs within the region for effectively
transfer the available technologies. The constitution of panel of these
consultants could be nature wise of the activities of the MSME .At the
time of constitution of panel of experts, there should be inclusion of the
owners of different sectors of MSME’S.
3. Determination of Technological Needs: There should be detailed survey
to assess the technical and financial needs of the MSME. So that, the
proper arrangement could be make to fulfill the needs of the MSME’S.
4. Training and development, awareness programs: There must be
conduction of training and development programs by the MSME ministry.
The currently running programs are not so effective and sufficient. One of
the important reasons for slow intake in the utilization of schemes is the
lack of knowledge about schemes and their likely benefits. The current
knowledge dissemination system is limited in its outreach. There is a
need to develop a better communication strategy and use of new age
media tools.
5. Sufficient availability of the credit- Our banking system does not
provide sufficient amount of credit to fulfill their requirement of
establishment of MSME and as well as not for the operational activities.
Therefore, there must be availability of credit according to the
requirement at cheaper rate.
6. Relaxation in labour laws and red tape-There should be relaxation in
complex labour laws to avoid the inconvenience in compliance. There
should not be uniform labour laws to each MSME. The must be sooth
running of the concern not to create a problem for them. Every effort
must do to avoid the unnecessary red tape.
7. Proper research and development: There should proper research and
development in respect of innovative method of production and service
rendering. The innovative products will provide the cheaper products and
the MSME’S will be able to cope up with the situation.

Q2. Public sector enterprises has become outdated in context of

globalisation. Comment with valid argument.
Answer: Financial Problems: Public sector enterprises are often
dependent on the government for their financial needs. This dependence
has led to a lack of autonomy and accountability. Unlike Private Global
companies that have access to funds from their parent companies and
can utilise the foreign markets to raise more investments.
Operational Problems: Public sector enterprises are often hampered by
outdated technology and processes. This has led to low productivity and
high costs. When compared to private companies that use better
technology and better machines because they have to stay competitive at
many markets. Global private companies strive towards better efficiency,
they do not fear to update their technology if they can reduce their
manpower and utilise them for better. That is why usually they have
outsourced nominal work to technology and machines.
Q3. Make an account of FDI in Indian economy. Discuss it's advantages n
disadvantages.
Answer: Any investment from an individual or firm that is located in a
foreign country into a country is called Foreign Direct Investment.
Generally, FDI is when a foreign entity acquires ownership or controlling
stake in the shares of a company in one country, or establishes businesses
there.
It is different from foreign portfolio investment where the foreign entity
merely buys equity shares of a company.
In FDI, the foreign entity has a say in the day-to-day operations of the
company.
FDI is not just the inflow of money, but also the inflow of technology,
knowledge, skills and expertise/know-how.
It is a major source of non-debt financial resources for the economic
development of a country.
FDI generally takes place in an economy which has the prospect of
growth and also a skilled workforce.
FDI has developed radically as a major form of international capital
transfer since the last many years.
The advantages of FDI are not evenly distributed. It depends on the host
country’s systems and infrastructure.

FDI in India
The investment climate in India has improved tremendously since 1991
when the government opened up the economy and initiated the LPG
strategies.
The improvement in this regard is commonly attributed to the easing of
FDI norms.
Many sectors have opened up for foreign investment partially or wholly
since the economic liberalization of the country.
Currently, India ranks in the list of the top 100 countries in ease of doing
business.
In 2019, India was among the top ten receivers of FDI, totalling $49 billion
inflows, as per a UN report. This is a 16% increase from 2018.
In February 2020, the DPIIT notifies policy to allow 100% FDI in insurance
intermediaries.
In April 2020, the DPIIT came out with a new rule, which stated that the
entity of nay company that shares a land border with India or where the
beneficial owner of investment into India is situated in or is a citizen of
such a country can invest only under the Government route. In other
words, such entities can only invest following the approval of the
Government of India
In early 2020, the government decided to sell a 100% stake in the national
airline’s Air India. Benefits of FDI
FDI brings in many advantages to the country. Some of them are
discussed below.
Brings in financial resources for economic development.
Brings in new technologies, skills, knowledge, etc.
Generates more employment opportunities for the people.
Brings in a more competitive business environment in the country.
Improves the quality of products and services in sectors.

Disadvantages of FDI
However, there are also some disadvantages associated with foreign
direct investment. Some of them are:
It can affect domestic investment, and domestic companies adversely.
Small companies in a country may not be able to withstand the
onslaught of MNCs in their sector. There is the risk of many domestic
firms shutting shop as a result of increased FDI.
FDI may also adversely affect the exchange rates of a country.
MODULE 4.
Q1. Low productivity is a key aspect of agriculture. Discuss with suitable
Arguments.
Answer: Despite improvements since independence, Indian agriculture
does not generally exhibit high production or efficiency.
Here are a few causes for this predicament:
First, population pressure
Since there is a limited amount of land, it is practically impossible to
expand the area that can be farmed. The demand for land is enormous as
a result of population growth. Even though India’s land-to-human ratio is
better than that of some developed nations, including China, Japan, the
Netherlands, and Belgium, the country still faces the issue of population
pressure on agricultural land due to other factors like extremely low yields
and low levels of industrialization.
Unprofitable Holdings:
Less than two hectares made up the average size of landholdings in India
in 2001. One-fourth of all rural households are landless, while another
one-fourth have an average land size of fewer than 0.4 hectares. This
makes it impossible to apply modern inputs, adopt scientific methods for
improving the soil, conserving water, protecting plants, and introducing
mechanized processes. These actions alone can guarantee and stabilize
high yields. This issue has been made worse by the slow pace of land
reforms in the majority of states. Land consolidation can increase
production.
Uncertain Monsoons and Poor Irrigation Infrastructure:
The failure or inadequacy of precipitation causes fluctuations in yields
because more than half of the gross cultivated area is rained. Around 86.5
MHA of gross cultivated land will continue to be rained even if the full
irrigation capacity is realized. This emphasizes the requirement for the
scientific development of rained agriculture.
The Subsistence Nature of Agriculture
Indian agriculture is distinguished by its subsistence nature, meaning
that most of the produce is consumed directly by the producers and that
any excess is often small. This is due to the fact that most Indian farmers,
who are often impoverished, employ out-of-date tools and technology
and cannot afford expensive inputs. Low levels of returns and meager
incomes, as a result, lead to low levels of savings and reinvestments. As a
result, a vicious spiral takes place, and agriculture is stagnant.
Soil fertility decline:
For an agricultural nation like India, the soil is a valuable resource, and soil
degradation is a major issue that contributes to the loss of soil fertility.
The primary kind of deterioration brought on by deforestation and
unreliable agricultural methods like shifting cropping is soil erosion.
Other causes of soil fertility loss include poor management and repetitive
use, which increases salt, alkalinity, and aridity.
Not Enough Support Services
The institutional support aspects, such as support price, promotion, and
lending facilities, are meant by this. By assuming the risks associated with
the agricultural industry, these services assist in fostering an environment
that encourages an entrepreneurial spirit among farmers. In the case of
coarse cereals and pulses, these services are especially deficient.
Poor resource management and a lack of initiative:
India’s agricultural institutions and infrastructure are underdeveloped.
The development of a class of agricultural entrepreneurs is hampered by
conditions of poverty, deprivation, and unequal distribution of land
resources.

Q2. Highlight technological innovation since 1991.

Answer:

Q3. Poor supply chain is one of the biggest challenges in India. Comment
with suitable examples.
Answer: Inadequate supply chain infrastructure, complex taxation laws,
high levels of intermediaries, product proliferation and lack of supply
chain visibility are a few supply chain challenges faced by the retail
industry in India
Though retail in India is making progress and is expected to grow more
than $879 billion by 2018, the country loses $65 billion every year due to
inefficient supply chain systems, says a study report.
According to the report published by industry body Confederation of
Indian Industry (CII) and Amarthi Consulting, India is ranked 47th on
logistics and is behind countries such as Japan, US, Germany and China.
The report titled, 'Global competitiveness of retail supply
chain-Challenges, Strategies and Recommendations', mentions that
supply chain costs in India, which deal with the procurement,
manufacture and distribution of products and services, and drive the
success of the retail sector, are about 12% to 13% of the gross domestic
product (GDP) compared with 7% to 8% of GDP in developed countries.
Currently, the retail industry in India is a $410 billion market and is
expected to grow to more than $879 billion by 2018. Food and groceries
account for 70% of the retailed items followed by textile and apparel at
7%. However, 95% of the retail sector is unorganised and fragmented. The
textiles & apparel segment represents about 40% of the organised sector.
According to the study report, inadequate supply chain infrastructure,
complex taxation laws, high levels of intermediaries, product proliferation
and lack of supply chain visibility are a few supply chain challenges faced
by the retail industry in India.
"Post Independence, there has been only 20% capacity addition to the
Indian rail network, while traffic has grown tenfold. Besides, due to the
complex taxation laws prevalent in the country, a product is taxed twice,
once by the Central government and then by the respective state
governments," the report said.
Improving supply chain infrastructure, implementation of goods and
services tax (GST), reducing intermediaries, and adopting green supply
chain practices are some of the recommendations of the report. (Green
supply chains involve integrating environmental thinking into the core
operations of a company, starting from material sourcing to delivery to
end-of-life recycling. It is expected that implementing green initiatives
along a company's supply chain can raise productivity, enhance customer
and supplier relations, support innovations, and enable growth).
The retail industry is facing challenges in the form of inadequate supply
chain infrastructure and the complex taxation laws prevalent in the
country. Investments in road infrastructure have not kept pace with the
growth in road traffic, the report states. Only 20% of the roads are in good
condition. The rail network is congested as freight moves on the same line
as the passenger line.
At the company level, retail in India is facing challenges like product
proliferation, high levels of intermediaries, fragmented and large number
of retail outlets, suboptimal supply chains and lack of supply chain
visibility. The report recommends - among other things - that companies
should optimise the supply chain network, reduce intermediaries,
improve supply chain visibilities and adopt green supply chain practises.

SHORT NOTES
Q1. India's demographic profile
Answer:
Total population Around 1.38 billion
Around 1.22 billion (as per census
2011)

World rank in population 2

Percentage of the world 17.71%

population

Population density 464 per sq. km

Growth rate 0.99%

Median age: Total Total: 28.1 years

Male: 27.5 years

Female: 28.9 years

Infant mortality rate 26.6 deaths per 1000 live births

Under – 5 mortality rate 32.9 deaths per 1000 live births

 Life expectancy at birth Total: 70.42 years

Male: 69.2 years

Female: 71.8 years

Rural population Around 65%

Urban population Around 35%

Q2. New education policy. ? ( give your views)

Answer: National Education Policy, 2020: A Critical Evaluation
The National Education Policy, 2o2o, also known as NEP 2020, is Indias
third education policy, was approved by the Union Cabinet of India in July,
2020 and is in line with Indias vision for a new and enhanced education
system that is more comprehensive and targets the growing young
population of India. It is based on the recommendations of the committee
led by Dr. K. Kasturirangan. This policy aims to bring about reforms in
both- schools and colleges and hopes to make India a global knowledge
superpower. Apart from introducing many changes in the system, this
policy has also renamed the Ministry of Human Resource Development to
Ministry of Education.
FOR Some salient features of the new education policy are as follows:
The government aims to achieve a Gross Enrolment Ratio (GRE) of 50% in
higher education by 2035 and 100% in primary and secondary education
by 2030- Though the goal itself is laudable, it remains a cause of concern
and many doubts linger with respect to the said target as the current
figures show Indian GRE in higher education at 26.3%2 and that for
secondary education at 73.79%3. These figures are worrisome and make
one wonder about how realistic they are. Besides this, it is also important
to acknowledge that many students drop out from schools either due to
gender disparity or financial issues. These issues are more evident in
some particular states like Bihar. This goal of high GRE does not take into
account these issues.
The policy proposes to increase the ambit of Right to Education to include
children in the age group of 3-18 years from the current age group of 6-14
years- Again, the goal is laudable, if achieved. But here too, we see issues
like students from more humble backgrounds being unable to get access
to private schools. Private schools are often reluctant to accept children
from poor families or even disabled children even though 25% seats are
reserved for such children in these schools. It remains unclear as to how
the government plans to encourage private schools to accept such
children and what incentives it intends to provide to these schools, if any.
NEP also states that wherever possible, students will be taught in their
mother tongue/regional language till Class 5- The move is based on the
idea drawn from various studies that show that young children
understand things best when they study them in their mother tongue.
However, this move is bound to create more problems as a single school
has many students speaking many different mother tongues and this
new policy will create problems in imparting education at the lower level
itself. Besides, Supreme Court in a case4 held the imposition of mother
tongue as a medium of instruction in schools as unconstitutional, going
against Article 19 (1)(a). Also, this policy totally disregards children whose
parents have transferable jobs.
The government aims to increase public investment in the education
sector to 6% of the GDP from the current 4.6%- Most of the developed
countries in the world spend somewhere around 6% of their GDPs on
education. These nations include- Norway (6.5%), New Zealand (6.4%),
United Kingdom (6.2%), USA (6%) etc.5 But when it comes to India, the
first question that comes to mind is- How India plans to invest so much in
education especially amidst the great economic crisis that our nation is
facing due to the COVID-19 pandemic? Where is the government
planning to get all this money from? Will the central government be able
to fund this investment or will the states bear the burden? Answers to
these questions remain unclear and unless they become clear, it is quite
early to say how effective this decision will prove to be.
NEP will establish a National Research Foundation (NRF) to promote a
strong research culture and build the research capacity among Indian
students- Research abilities is a prerequisite in any field or career. Modern
education relies heavily on the research abilities of students that
enhances their knowledge and skills. Promoting a strong research culture
is thus an important requirement in India. However, Indias spending in
terms of percentage of GDP has been stagnant at 0.6 to 0.7% in the last
20 years and is much lower than other nations like- US, China, South
Korea etc.6 India has 216.2 researchers per 1 million inhabitants as against
1200 in China and 4300 in the US, according to the report released by The
Brookings India. Such figures point towards overly ambitious goals.
The center has decided to continue with the three-language formula,
initially proposed in 1968, in NEP, 2020 as well- In the draft NEP released
in 2019, it was suggested that teaching and learning Hindi will be
mandatory in non-Hindi speaking states out of the three languages to be
taught in schools. But this clause was dropped after protests by some
states like Tamil Nadu. Now, the choice of the three languages is left to
the states and students but it is necessary that at least two out of these
three languages are native to India. Despite the removal of the previous
clause, there continues to be a fear among non-Hindi speaking states
about imposition of Hindi on them.
The emphasis on the setting up of Gender Inclusion Fund and Special
Education Zones to promote access to education to disadvantaged
groups- This move was long overdue. Access to education in India is
extremely unequal. It is not gender inclusive and we see a lot of
disparities in access to education in terms of gender and financial status.
This move by the government is aimed at solving this problem which is
one of the greatest setbacks in Indian education system. However, it
remains to be seen how effectively the government is able to implement
this policy as one of the greatest problems in India is implementation of
laws and policies.
The policy will replace the 10+2 structure with the new 5+3+3+4 structure-
The 10+2 structure followed the system of 10 years of primary and 2 years
of secondary education. This system will now be replaced by the new
5+3+3+4 structure which will involve 5 years of foundational stage, 3 years
of preparatory stage, 3 years of middle stage and 4 years of secondary
education. This structure will also involve more flexibility in a student's
choice of subjects and the clear distinction between streams- science,
commerce and arts/humanities- will be done away with. This is a good
move as it will stop the three streams from getting pitted against one
another and students will get a larger number of choices in subjects.
NEP has also brought changes in teacher hiring policy and has set up
national professional standards for teachers- By 2030, the minimum
qualification required for teachers will be a four-year B.Ed. Course. Also,
interviews will become an integral aspect for hiring teachers. Specifying
minimum qualification and making interviews necessary for hiring is a
great move to ensure that educational standards are maintained and are
not compromised in any way. It was found in the data7 compiled by
National University of Educational Planning and Administration (NUEPA),
Delhi, that 48.87% of school teachers in Karnataka were not even
graduates. This shows the poor condition of the teaching staff in Indian
schools. This new policy will hopefully bring about a positive change in
this regard.
NEP will set up national level bodies like National Higher Education
Regulatory Council (NHERC), National Accreditation Council (NAC),
National Educational Technology Forum (NETF), Higher Education Grants
Council (HEGC) etc.

AGAINST The new policy has tried to please all, and the layers are clearly
visible in the document. It says all the right things and tries to cover all
bases, often slipping off keel.
Lack of integration: In both the thinking, and in the document, there are
lags, such as the integration of technology and pedagogy. There are big
gaps such as lifelong learning, which should have been a key element of
upgrading to emerging sciences.
Language barrier: There is much in the document ripe for debate – such
as language. The NEP seeks to enable home language learning up to
class five, in order to improve learning outcomes. Sure, early
comprehension of concepts is better in the home language and is critical
for future progress. If the foundations are not sound, learning suffers,
even with the best of teaching and infrastructure. But it is also true that a
core goal of education is social and economic mobility, and the language
of mobility in India is English.
Multilingualism debate: Home language succeeds in places where the
ecosystem extends all the way through higher education and into
employment. Without such an ecosystem in place, this may not be good
enough. The NEP speaks of multilingualism and that must be
emphasised. Most classes in India are de facto bilingual. Some states are
blissfully considering this policy as a futile attempt to impose Hindi.
Lack of funds: According to Economic Survey 2019-2020, the public
spending (by the Centre and the State) on education was 3.1% of the GDP.
A shift in the cost structure of education is inevitable. While funding at 6%
of GDP remains doubtful, it is possible that parts of the transformation are
achievable at a lower cost for greater scale.
A move in haste: The country is grappled with months of COVID-induced
lockdowns. The policy had to have parliamentary discussions; it should
have undergone a decent parliamentary debate and deliberations
considering diverse opinions.
Overambitious: All aforesaid policy moves require enormous resources. An
ambitious target of public spending at 6% of GDP has been set. This is
certainly a tall order, given the current tax-to-GDP ratio and competing
claims on the national exchequer of healthcare, national security and
other key sectors. The exchequer itself is choked meeting the current
expenditure.
Pedagogical limitations: The document talks about flexibility, choice,
experimentation. In higher education, the document recognizes that
there is a diversity of pedagogical needs. If it is a mandated option within
single institutions, this will be a disaster, since structuring a curriculum
for a classroom that has both one-year diploma students and four-year
degree students’ takes away from the identity of the institution.
Institutional limitations: A healthy education system will comprise of a
diversity of institutions, not a forced multi-disciplinarily one. Students
should have a choice for different kinds of institutions. The policy risks
creating a new kind of institutional isomorphism mandated from the
Centre.
Issues with examinations: Exams are neurotic experiences because of
competition; the consequences of a slight slip in performance are huge in
terms of opportunities. So the answer to the exam conundrum lies in the
structure of opportunity. India is far from that condition. This will require a
less unequal society both in terms of access to quality institutions, and
income differentials consequent upon access to those institutions.

Q3. BIFR ( objectives, basic role, etc.)

ANSWER: The Board for Industrial and Financial Reconstruction was an
organization of the Govt. It incorporated some portion of the Department
of Financial Services of the Ministry of Finance. BIFR was set up in
January 1987 by the Rajiv Gandhi government, under the Sick Industrial
Companies (Special Provisions) Act, 1985. It aimed to rejuvenate and
recover wiped out associations and closing down or liquidation of the
ability to create or occurring of confinement later on or not beneficial
organizations. It offered proper renewal bundles relying upon the idea of
the emergency or inconvenience. The BIFR came to an end on 1st od
December 2016 by the government of India and all the proceeding were
then referred to the NLCT and NLCAT under the feeds of the Insolvency
and Bankruptcy Code.

Under the SICA, the Board of a sick industrial organization was

constitutionally compelled to report it to the BIFR, and the BIFR could
make whatever petitions were expected to decide, whether the
organization was sick or not.Among various targets, the policy was to give
an approach, to bring back to life sick industrial organizations and
discharge public assets. If an organization was seen as to be confined, the
BIFR could give the organization justifiable time to recover wellbeing, or it
could suggest various other measures. The board could take different
activities to perform, including changes to the authorities, the
amalgamation of the confined unit with a sound one, market or financial
remaking. The board could suggest the organization to shut down.The
BIFR was proposed to connect the constitutional break among sickness
and restoration. It would force-time plans for recovery related exercises to
be finished, administer their usage and lead occasional audits of sick
records. The BIFR would call a conference for sharing perspectives,
planning work and building up a consolidated resolution for dealing with
sick organizations, accelerating the beginning of reconstructing activities.
The BIFR was intended to turn sick organizations into profitable
organisations in a half year or to request winding-up of the organisations.

The Board has a Chairman and from two to fourteen other members, all
to be qualified as High Court judges or else to have at least fifteen years of
relevant professional experienceThe Board only handles large or
medium-sized sick industrial companies in which large amounts have
been sunk.Under the Sick Industrial Companies Act, the Board of a sick
industrial company is legally obliged to report it to the BIFR, and the BIFR
has the power to make whatever inquiries are needed to determine if the
company is in fact sick.
Among other objectives the act was to provide a way to revive sick
industrial companies and release public funds.If a company is found to be
sick, the BIFR can give the company reasonable time to regain health
(bring total assets above total liabilities) or it can recommend other
measuresThe board can take other actions including changes to
management, amalgamation of the sick unit with a healthy one, sale or
financial reconstructionThe Board can recommend a sick industrial
company for winding up
The BIFR was intended to bridge the legal gap between sickness and
revival. It would impose time schedules for revival related activities to be
completed, oversee their implementation and conduct periodic reviews
of sick accounts. The BIFR would provide a forum for sharing views,
coordinating effort and developing a unified approach to dealing with
sick companies, speeding up the start of corrective action The BIFR was
meant to either turn companies around within six months or order
closure.

Q4. Food security in India.

ANSWER: Food security is when all people at all times have physical and
economic access to sufficient, safe and nutritious food to meet their
dietary needs and food preferences for an active and healthy life.
Food security in India is a major challenge and there are several aspects
to it. With an ever-growing population and decreasing productive land,
food security is even harder to achieve than before. The foremost
challenge to food security in India is the unpredictable weather situation
In order to achieve food security in equitable manner to all the citizens of
India, Parliament enacted Food Security Act, 2013. It is responsible to
provide food security at rate of 75% in rural and 50% in Urban areas.
Antyodaya Yojana and Priority householders are the main beneficiaries of
these act. The Ministry of Consumer Affairs, Food, and Public Distribution
is the nodal ministry for the implementation of food subsidy. Allocation to
this Ministry accounts for 7% of the budget of the central government in
2021-22.
Silent features of Food Security act, 2013 are:
Foodgrains are distributed at subsidized rates.
Targeted Public Distribution System.
Food Security Allowance.
Transparency provisions are made available to avoid loop holes.
Significance of Act:
To boost the Agriculture sector.
Aids the Government to Regulate the Prices.
Enhance reduction in poverty.
Access to nutritious food.
Also important for global security and national stability.
Food Security Programs in India:
Constitutional Provision: Though the Indian Constitution does not have
any explicit provision regarding right to food, the fundamental right to life
enshrined in Article 21 of the Constitution can be interpreted to include
the right to live with human dignity, which may include the right to food
and other basic necessities.
Buffer Stock: Food Corporation of India (FCI) has the prime responsibility
of procuring the food grains at minimum support price (MSP) and stored
in its warehouses at different locations and from there it is supplied to the
state governments in terms of requirement.
Public Distribution System: Over the years, Public Distribution System has
become an important part of Government’s policy for management of
the food economy in the country. PDS is supplemental in nature and is
not intended to make available the entire requirement of any of the
commodity.
Under the PDS, presently the commodities namely wheat, rice, sugar and
kerosene are being allocated to the States/UTs for distribution.
Some States/UTs also distribute additional items of mass consumption
through the PDS outlets such as pulses, edible oils, iodized salt, spices,
etc.
National Food Security Act, 2013 (NFSA): It marks a paradigm shift in the
approach to food security from welfare to rights based approach.
NFSA covers 75% of the rural population and 50% of the urban population
under:
Antyodaya Anna Yojana: It constitutes the poorest-of-the-poor, and is
entitled to receive 35 kg of foodgrains per household per month.
Priority Households (PHH): Households covered under PHH category are
entitled to receive 5 kg of foodgrains per person per month.
The eldest woman of the household of age 18 years or above is mandated
to be the head of the household for the purpose of issuing ration cards.
In addition, the act lays down special provisions for children between the
ages of 6 months and 14 years old, which allows them to receive a
nutritious meal for free through a widespread network of Integrated Child
Development Services (ICDS) centres, known as Anganwadi Centres.
Challenges in achieving Food Security:
Implementing measures to improve agricultural productivity and food
storage
The government needs to adopt an integrated policy framework to
facilitate the increased use of irrigation and newer farming techniques.
The measures should focus mainly on rational distribution of cultivable
land, improving the size of the farms and providing security to the tenant
cultivators apart from providing the farmers with improved technology
for cultivation and improved inputs like irrigation facilities, availability of
better quality seeds, fertilisers and credits at lower interest rates. One
main reason why food is not distributed equitably is that a significant
amount is wasted.
It would be useful to adopt strategies for food storage which have been
implemented successfully in other countries.
Ensuring food availability and accessibility to below poverty line (BPL)
candidates
This can be done by more accurate targeting of the BPL population so
that they get food at substantially low price. There is a problem
associated with the identification of BPL. There is a debate about the
exact number of people falling under this category. Besides helping out
the BPL population, there should be a provision for subsidy on the sale of
food grains to above poverty line (APL) customers too. Also, all restrictions
on food grains regarding inter-State movement, stocking, exports and
trade financing should be removed. This will reduce the food prices and
increase affordability. The Public Distribution System must be made
transparent and reliable.
Improving purchasing power through employment generating schemes
The government should come up with more holistic schemes like
Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).
Poverty alleviation programmes like the Integrated Rural Development
Programme (IRDP) and employment generation schemes like Jawahar
Rozgar Yojana, Nehru Rozgar Yojana etc need to be re-oriented and up
scaled to make a positive impact on the purchasing power of the lower
socio-economic segment of the population. Also, it is equally important to
enhance the quantity and quality of wage-paid employment. Focus needs
to be shifted to the workers in the informal sector by providing decent
wages and healthy working conditions. In the urban areas, providing
assistance to the small scale enterprises will lead to expansion of
employment opportunities. It should be ensured that nutritional
objectives should be an integral part of all the poverty alleviation
programmes.
Crop diversification, establishing food grain banks and promoting
household gardening
Another area which needs to be explored is ‘crop diversification’. Higher
profitability and the stability in production highlight the importance of
crop diversification, e.g. legumes alternative with rice and wheat. Growing
of non-cereal crops such as oilseeds, fruits and vegetables etc need to be
encouraged. The creation of decentralised food grain banks in each
village or block of the district, from which people may get subsidised food
grains against food coupons, will be a good option. This concept will
improve the delivery of food grains and eliminate corruption.
One of the ways to ensure direct access to good quality food that can be
easily grown and prepared could be the concept of home gardening.
Community awareness through IEC activities and social marketing
Need based IEC and training materials should be developed for effective
dissemination of nutrition messages. Local community education on key
family health and nutrition practices using participatory and planned
communication methodologies will be helpful. Incorporating health and
nutrition education into formal school curriculum for girls and adult
literacy programmes could greatly improve women’s health and nutrition.
Social marketing of iodized salt, iron and folic acid and vitamin A
supplements, nutritious food mixes and other low cost vitamin/mineral
preparations will prove to be beneficial.
Monitoring and timely evaluation of nutritional programmes
A complete community based approach needs to be adopted. Focus on
even simple interventions like promoting exclusive breastfeeding, proper
complementary feeding and growth monitoring and promotion (GMP)
can be expected to give outstanding results. Efforts should be made by
the concerned health departments and authorities to initiate and
supervise the functioning of the nutrition related schemes in an efficient
way. Annual surveys and rapid assessments surveys could be some of the
ways through which program outcomes can be measured. Evaluations
must be timely performed and should provide relevant information
regarding the effectiveness of interventions. Use of information
technology to improve program monitoring can be thought of too.
Community participation and intersectoral coordination
Revamping of existing direct nutrition programmes to enable
management by women’s Self Help Groups (SHGs) and /or local bodies
along with orientation and training of community health workers,
Panchayati Raj Institution (PRI) members, other opinion leaders,
caregivers and other stakeholders can be another area, if addressed, can
give positive results. Delivering a very basic, well-targeted package of
nutrition services through a multi-sectoral approach will improve the
nutrition level of people. Attention needs to be given to school based
interventions including hygiene, sanitation and nutrition education.
Community based nutrition programs (CBNP) which create scope for
community participation, must be facilitated by effective policy
implementation.
Ethical Considerations
Ethical issue principles including plagiarism, informed consent,
misconduct, data fabrication and/or falsification, double publication
and/or submission, redundancy, etc. have been completely observed by
the authors.
Solutions:
Enhance food storage capacities like cold chain technology.
Increase Irrigation.
Fertiliser availability.
Focus should be kept on employment provisions through various sectors.
Community Participation.
Crop Diversification.
Enhance Renewable Energy generation speedily.

Extra questions
Q1. the 5th largest economy in the world is poor in HDI.
ANSWER: Recently, India became the world’s fifth largest economy by
overtaking the United Kingdom. Now, the United States, China, Japan,
and Germany are the only nations with economies larger than India's.
The real Gross Domestic product (GDP) growth of 6-6.5% in a world full of
uncertainties is the new normal and India is set to be the third largest
economy by 2029.
What are the Key Highlights of this Achievement?
New Milestone:
Moving past one of the biggest economies in the world, especially one
that ruled over the Indian sub-continent for two centuries, is a major
milestone.
Size of Economy:
The size of the Indian economy in ‘nominal’ cash terms in the quarter
through March, 2022 was USD 854.7 billion while for the UK was USD 816
billion.
Comparison with United Kingdom:
Population Size:
As of 2022, India has a population of 1.41 billion while the UK’s population
is 68.5 million.
GDP Per capita:
GDP per capita provides a more realistic comparison of income levels
because it divides a country’s GDP by the population of that country.
The per capita income in India remains very low, India is ranked 122 out of
190 countries in terms of per capita income in 2021.
Poverty:
The low per capita incomes often point to high levels of poverty.
At the start of the 19th century, the UK’s share in extreme poverty was
considerably higher than India’s.
However, the relative positions have reversed even though India has
made giant strides in curbing poverty.
Health:
The Universal Health Coverage (UHC) Index is measured on a scale from 0
(worst) to 100 (best) based on the average coverage of essential services
including reproductive, maternal, newborn and child health, infectious
diseases, non-communicable diseases and service capacity and access.
While faster economic growth and the government’s policy focus on
healthcare schemes since 2005 have made a distinct improvement for
India, there is still a long way to go.
Human development Index:
The end goal of higher GDP and faster economic growth is to have better
human development parameters.
According to HDI (2019), the UK score is 0.932 and India’s score is 0.645
which is comparatively far behind the UK.
Despite its secular improvement, India might still take a decade to be
where the UK was in 1980.
The 2019 HDI ranks India with a per capita income of $6,681 in the 131st
position, which is a notch lower than its 130th rank in 2018. The malefic
effects of deep-rooted societal and economic disadvantages account for a
low rank for an economy that is in the global top 6 by size. Following
factors can be dubbed as reasons for India’s dismal performance in HDI:
Increasing Income Inequalities: Income inequalities amplify failings on
other HDI indices of human development. Intergenerational income
mobility is lower in countries with high-income inequality.
It manifests at birth and determines access to quality healthcare,
education, and opportunities.
Further, there is an increasing trend in income inequality. In India, the
income growth of the bottom 40% between 2000 and 2018 (58%) was
significantly below the average income growth for the entire population
(122%).
Gender Inequality: Numbers show female per capita income in India was
only 21.8% of that of males, while it was more than double at 49% in other
developing countries.
The meagre per capita income of females in India is mainly because of
their exclusion from the labour force.
Only 20.5% of the women in the working-age group were in the labour
force, pointing to its dismal Female Labour Force Participation Rate
(LFPR).
Cumulative Impact: The cumulative impact of these factors spills over
across generations. It is this intergenerational cycle which denies
opportunities to those at the bottom of the pyramid.

Q2. Public sector enterprises have a role in the Indian economy.

ANSWER:ROLE OF PUBLIC SECTOR IN INDIAN ECONOMY
1. Generation of Income:
Public sector in India has been playing a definite positive role in
generating income in the economy. The share of the public sector in net
domestic product (NDP) at current prices has increased from 7.5 per cent
in 1950-51 to 21.7 per cent in 2003-04. Again the share of public sector
enterprises only (excluding public administration and defence) in NDP
was also increased from 3.5 per cent in 1950-51 to 11.12 per cent in 2005-06.

2. Capital Formation:
Public sector has been playing an important role in the gross domestic
capital formation of the country. The share of the public sector in gross
domestic capital formation has increased from 3.5 per cent during the
First Plan to 9.2 per cent during the Eighth Plan. The comparative shares
of public sector in the gross capital formation of the country also
recorded a change from 33.67 per cent during the First Plan to 50 per
cent during the Sixth Plan and then declined to 21.9 per cent in 2005-06.
But the Public sector is not playing a significant role in respect of
mobilisation of savings. The share of the public sector in gross domestic
savings increased from 1.7 percent of GNP during 1951-56 to only 3.6
percent during 1980-85. During the 1980s, the share of the public sector in
gross domestic savings declined from 16.2 per cent in 1980-81 to 7.7 per
cent in 1988-89.
In this connection Narottam Shah observed, “The failure of the public
sector contributes only 21 per cent of the nation’s savings; that also in
part, through heavy taxation and semi-fictitious profits of the Reserve
Bank. The remaining 79 per cent of the nation’s savings came from the
private sector.” Again the share of the public sector in gross domestic
savings increased from 4.78 per cent in 1990-91 to 6.61 per cent in 2005-06.

3. Employment:
Public sector is playing an important role in generating employment in
the country.
Public sector employments are of two categories, i.e:
(a) Public sector employment in government administration, defence and
other government services and
(b) Employment in public sector economic enterprises of both Centre,
State and Local bodies. In 1971, the public sector offered employment
opportunities to about 11 million persons but in 2003 their number rose to
18.6 million showing about 69 per cent increase during this period.
Again in 2003, the public sector offered employment opportunities to 18.6
million persons which was 69 per cent of the total employment generated
in the country as compared to 71 per cent employment generated in 1991.
However, there is considerable decline in the annual growth rate of
employment in the public sector from 1.53 per cent during 1983-1994 to
0.80 per cent during 1994- 2004.
Moreover, about 69.0 per cent of the total employment is generated in the
public sector. Moreover, at the end of March 2004, about 51.7 per cent of
the total employment (i.e. about 96 lakh) generated in public sector is
from Government administration, community, social and personal
services and the remaining 48.3 per cent (i.e., nearly 89.7 lakh) of the
employment in public sector is generated by economic enterprises run by
the Centre, State and Local Governments.
The maximum number of employment is derived from transport, storage
and communications (28.1 lakh). The public sector manufacturing is the
next industry which generated employment to the extent of 11.1 lakh
persons.

4. Infrastructure:
Without the development of infrastructural facilities, economic
development is impossible. Public sector investment on infrastructure
sectors like power, transportation, communication, basic and heavy
industries, irrigation, education and technical training etc. has paved the
way for agricultural and industrial development of the country leading to
the overall development of the economy as a whole. Private sector
investments are also dependent on these infrastructural facilities
developed by the public sector of the country.

5. Strong Industrial base:

Another important role of the public sector is that it has successfully built
a strong industrial base in the country. The industrial base of the
economy is now considerably strengthened with the development of
public sector industries in various fields like—iron and steel, coal, heavy
engineering, heavy electrical machinery, petroleum and natural gas,
fertilisers, chemicals, drugs etc.
The development of private sector industries is also solely dependent on
these industries. Thus by developing a strong industrial base, the public
sector has developed a suitable base for rapid industrialization in the
country. Moreover, the public sector has also been dominating in critical
areas such as petroleum products, coal, copper, lead, hydro and steam
turbines etc.
6. Export Promotion and Import Substitution:
Public sector enterprises have been contributing a lot for the promotion
of India’s exports. The foreign exchange earnings of the public enterprises
rose from Rs. 35 crore in 1965-66 to Rs. 5,831 crore in 1984-85 and then to
Rs. 34,893 crore in 2003- 04. Thus, the export performance of the public
sector enterprises in India is quite satisfactory.
The public sector enterprises which played an important role in this
regard include—Hindustan Steel Limited, Hindustan Machine Tools (HMT)
Limited, Bharat Electronics Ltd., State Trading Corporation (STC) and
Metals and Minerals Trading Corporation.
Some public sector enterprises have shown creditable records in
achieving import substitution and thereby saved precious foreign
exchange of the country. In this regard mention may be made of Bharat
Heavy Electricals Limited (BHEL), Bharat Electronics Ltd., Indian Oil
Corporations, Oil and Natural Gas Commission (ONGC). Hindustan
Antibiotics Ltd. (HAL) etc. which have paved a successful way to import
substitution in the country.

7. Contribution to Central Exchequer:

The public sector enterprises are contributing a good amount of
resources to the central exchequer regularly in the form of dividend,
excise duty, custom duty, corporate taxes etc. During the Sixth Plan, the
contribution of public enterprises to the central exchequer was to the
tune of Rs. 27,570 crore.
Again this contribution has increased from Rs. 7,610 crore in 1980-81 to Rs.
18,264 crore in 1989-90 and then to Rs. 85,445 crore in 2003-04. Out of this
total contribution, the amount of dividend contributed only 2 to 3 percent
of it.

8. Checking Concentration of Income and Wealth:

Expansion of public sector enterprises in India has been successfully
checking the concentration of economic power into the hands of a few
and thus are redressing the problem of inequalities of income and-wealth
of the economy. Thus, the public sector can reduce this problem of
inequalities through diversion of profits for the welfare of the poor people,
undertaking measures for labour welfare and also by producing
commodities for mass consumption.

9. Removal of Regional Disparities:

From the very beginning industrial development in India was very much
skewed towards certain big port cities like Mumbai, Kolkata and Chennai.
In order to remove regional disparities, the public sector tried to disperse
various units towards the backward states like Bihar, Orissa, and Madhya
Pradesh. Thus, considering all these foregoing aspects it can be observed
that in-spite of showing poor performance, the public sector is playing a
dominant role in all-round development of the economy of the country.
Q3. Attracting massive FDI in the Indian economy is a way for faster
economic growth. Comment.
ANSWER: It’s clear what India’s next step should be to achieve growth:
make foreign direct investment (FDI) a top priority. However, India offers
only a hesitant welcome to FDI. It seeks investment in several industries,
including manufacturing, construction, telecommunications and financial
services, but not in others like multi-brand retail.
Often, regulation allows only a minority investment for fear of losing
domestic management control. For example, FDI in insurance companies
is permitted up to 49% with restrictions on voting rights to ensure that
management control of an insurance firm doesn’t shift to a foreign entity.
Concern of loss of management control is of much less importance
compared to sacrifice of economic growth. Considering the potential of
FDI to spur growth, India’s ambivalence toward FDI is completely
misplaced. If India wants to accelerate growth, it is imperative that the
country attracts FDI in large, really large amounts.
Growth results from domestic investment from savings, from productivity
improvements and from foreign investments. Countries like China that
have grown rapidly in recent decades have taken advantage of all three
sources of economic growth. India, on the other hand, has trIed to
achieve growth without much FDI.
However, India’s approach to growth is like bringing a knife to a gunfight:
it’s destined to fail relative to other countries’ growth strategies, which
take advantage of FDI. To transcend from 5-7% growth to 10-12% growth,
FDI is essential.
To put India’s track record in attracting FDI in an international context, it’s
been at best a trickle compared to FDI into countries like Mexico and
China. In the last 10 years, Mexico has attracted $247 billion of FDI net
inflows and China $2 trillion, compared to India’s $229 billion.
From the standpoint of an average citizen, the comparison is worse
because Mexico is far less populous than India or China. What matters to
an average citizen is per-capita investment. On a per-capita basis, FDI net
inflows for Mexico, China and India are $2,017, $1,531 and $183, respectively.
No wonder the per-capita GDP of Mexico is $10,300, China $6,800 and
India $1,500.
So how much FDI would be needed to make a meaningful difference in
India’s economic growth rate? What is the effect of FDI on growth? Based
on analysis of data from the last 20 years for about 100 countries, I have
compared FDI as a percentage of GDP for each country against its annual
growth in GDP. Each 1% increase in FDI adds about 0.4% to a country’s
GDP growth. So, to boost GDP growth by about 2%, India will need FDI of
about 5% of GDP. Put another way, at the current level of GDP of almost
$2 trillion in India, about $100 billion of FDI is required to boost GDP
growth by 2%.
For a massive increase in the growth rate by 4% to GDP, $200 billion of
FDI would be needed — this is about eight times the level of GDP India
currently attracts in FDI. Also, as the economy expands, the dollar amount
of FDI will have to grow proportionately. Obviously, this becomes a
challenge. For China, it’s already a challenge to attract ever-growing sums
of FDI that would enable China to sustain a high rate of growth. China’s
growth rate should continue to taper off and become modest — a
life-cycle phenomenon.
In the case of India, if the government’s goal is to grow the economy
faster, then it’s important to recognise the necessity of FDI. There is no
point in being cagey in its efforts to attract FDI. The naysayers should
recognise that FDI hasn’t harmed other countries that have attracted FDI,
including Japan, South Korea, Mexico and China. For the last 10 years,
global FDI net inflows have totalled nearly $15 trillion, and even countries
with populations that are fractions of India’s are making noticeable
contributions to that figure. Brazil, with a population less than a fifth of
India’s, has seen $461 billion in FDI net inflows in the last decade, while
Turkey, nearly one-20th India’s size, has seen $135 billion in FDI.
Proclamations of a simplified or streamlined process for FDI into India are
not enough to attract investment. Real changes and commitment, as well
as incentives to states and bureaucrats for actually receiving FDI, are
needed. The mindset has to change to judging the success of FDI policies
on the basis of the amount of investment attracted.

Q4. Technological innovation can transform indian agriculture

ANSWER: Some technological advancements that have innovated
agriculture:
Improved productivity from mechanisation of agriculture – Manual labour
and hand tools used in agriculture have limitations in terms of energy and
output, especially in tropical environments. Resistance to agricultural
mechanisation, especially among smallholder farmers due to accessibility,
cost, and maintenance issues, often acts as a detrimental factor. To
reduce manual labour and make processes faster, combine harvesters are
finding greater use. Indian farming is characterised by small landholdings,
and the need is to partner with others to take advantage of modern
machines.
Capacity building of farmers through hand-holding, making modern
machines available especially to small farms, and tackling affordability
issues through policy will lead to a greater adoption of mechanisation
services going forward. Agricultural mechanisation has the potential to
directly and indirectly affect yields through reduction in post-harvest
losses and increase harvest gains.
Climate/ weather prediction through artificial intelligence – A major
advance in agriculture is the use of artificial intelligence (AI). Modern
equipment and tools based on AI enable data gathering and assist in
precision farming and informed decision-making. Drones, remote
sensors, and satellites gather 24/7 data on weather patterns in and
around the fields, providing farmers with vital information on
temperature, rainfall, soil, humidity, etc.
However, AI finds slow acceptance in a country like India where marginal
farming, fragmented landholdings, and other reasons act as
impediments. But there is no doubt that technologies based on AI can
bring precision to large-scale farming and lead to an exponential rise in
productivity.
Resilient crops developed via use of biotechnology – Agriculture refers to
a wide resource of methodologies that include traditional breeding
methods, genetic engineering, and development of microorganisms for
agriculture. Generally speaking, genetic engineering uses the
understanding of DNA to identify and work with genes to increase crop
resistance to pests, and the development of high-yielding varieties also
makes improvements to livestock.
The spinoff of biotechnology in agriculture has resulted in all-around
benefits for farmers and end consumers. Though some controversial
approaches have led to resistance in the adoption of biotechnology, there
is no doubt that the future of agriculture is heavily dependent on SAFE
biotechnology, given the changing climate and increase in population.
Agriculture Sensors – Communications technology has evolved rapidly in
India and made smart farming a possibility. Sensors are now being used
in agriculture to provide data to farmers to monitor and optimise crops
given the environmental conditions and challenges. These sensors are
based on wireless connectivity and find application in many areas such as
determining soil composition and moisture content, nutrient detection,
location for precision, airflow, etc. Sensors help farmers save on pesticides,
labour, and result in efficient fertiliser application. They allow farmers to
maximise yields using minimal natural resources.
Improving farm yields and supply chain management use Big Data – The
collection and compilation of data and its further processing to make it
useful for decision-making/problem-solving are expanding the way big
data functions. Big data is slated to play a major role in smart farming,
and the benefits percolate across the entire supply chain and the
markets. Agriculture is becoming larger, and it depends on a large
number of variables.
This is resulting in greater collection and use of complex data, which has
to be meaningfully interpreted and managed. Data can be from external
sources such as social media, supplier network, markets, or from
sensor/machine data from the fields. Transformation of agriculture from
using big data is taking place that affects crop yield, supply chain
management, yield prediction, etc.
Livestock monitoring – Use of chips and body sensors can help prevent
disease outbreaks and are crucial in large-scale livestock management.
Chips and body sensors measure vital parameters and indicators that
could detect illness early and prevent herd infection. Similarly,
ultrasounds are a useful tool to judge the quality of meat. This helps
control and improve the quality of the meat.
Q5. The Indian economy is poised to become the 3rd largest economy in
the world by 2030.
ANSWER: India is on course to be the third-largest economy by 2030,
trailing the US and China, and headlining emerging markets that are
poised to account for more than half the global gross domestic product
within the next decade, Capital Economics said.
India recently overtook the UK to become the world’s fifth-largest
economy at market exchange rates.
“Looking ahead, India looks set to continue its march up the global
rankings,” Shilan Shah, senior economist at Capital Economics said in a
note on September 6.
“We think India will overtake Germany and Japan to become the third
largest economy in the world within the next decade.”
While the Indian economy is likely to suffer long-term scarring from the
coronavirus pandemic, a relatively positive outlook for demographics and
productivity should ensure that GDP growth remains much stronger than
elsewhere, the economist added.
Capital Economics projects an average real GDP growth of six percent per
year for India from 2022 to 2030.
Emerging markets with rapid population growth, healthy manufacturing
sectors or those that stand to benefit from a greening of the global
economy will jump up the GDP league table over the next decade, the
house said.
India’s pandemic-hit economy has recovered but faces headwinds from
inflation, monetary tightening and global uncertainties.
The Reserve Bank of India is confident it will handle the monetary policy
without any major blips, finance minister Nirmala Sitharaman said on
September 7. The central bank has in recent months raised interest rates
sharply to curb red-hot inflation after keeping policy
ultra-accommodative for two years amid the coronavirus outbreak.
Prime minister Narendra Modi’s administration is striving to boost growth
by focusing on infrastructure, facilitating private investments and
economic reforms. Modi has aimed at making India a developed economy
in the next 25 years.
The finance minister has said that the government will focus on equitable
growth.
Capital Economics expects India’s nominal GDP per person to rise to
$5,160 by 2030 against an estimated $22,490 for China and $99,480 for the
US.
India’s GDP per person stands at $2,520, according to International
Monetary Fund (IMF) data.

Q6. There has been a paradigm shift in the structure of the Indian
economy since 1951. Comment your views.
ANSWER: 1. Quantitative Changes:
i. Rising trend of National Income and per Capita Income:
Economic growth of any country is measured by the increase in national
and per capita output.
During the plan period, the national income of the country has certainly
gone up. In 1950- 51, net national product at factor cost or national income
(at 1999-2000 prices) stood at Rs. 2,06,493 crore. It rose to Rs. 27,60,325
crore in 2007-08 (at 1999- 2000 prices).
This means that between 1950-51 and 2007-08 national income grew at
the compound rate of 4.7 percent per annum.
Compared to the pre-independence figure, this is really remarkable.
However, the performance of the Indian economy in this direction in the
1980s, 1990s was certainly praiseworthy since it recorded a growth rate of
more than 6 p.c. p.a. GDP growth rate in the 2000s is unprecedented.
It rose from 5.8 p.c. in 2001-02 to 9.2 p.c. in 2006-07. If the present trend
continues, the country will be able to achieve a double digit growth rate
within one or two years.
However, the better measure of economic development is the per capita
income. Per capita NNP rose to Rs 24,256 in 2007- 08 (at 1999-2000 prices)
as against Rs 6,122 of 1950-51 at 1999-2000 prices. This means that during
this period, the compound annual growth rate of net per capita income
rose by 2.5 p.c. p.a.

Historically, it exhibits a better growth rate. Yet, it is inadequate compared

to the needs of the country. The only encouraging aspect is that it shows
a rising trend.

ii. Increase in Agricultural and Industrial Output:

Over the plan period, the Indian economy experienced a higher growth
rate in agriculture as well as in industry. Pre-plan period recorded an
agricultural growth rate of 0.3 p.c. while the plan period showed a growth
rate of 2.66 p.a. Performance of the industrial sector is certainly better
one.
During the plan period, 1950-2007, the overall achievement in this sector
is more than 4.8 p.c. Trend growth of India’s exports shows Indian
agricultural and industry on the move.

2. Qualitative Changes or Structural Changes:

During the plan period, not only economic growth picked up, but also
economic development i.e., ‘growth plus change’ occurred in India. This
amounts to saying that the Indian economy witnessed structural
changes.
By economic structure we mean interrelationship among the different
productive sectors i.e., agriculture and allied activities (known as the
primary sector), manufacturing and industries (called the secondary
sector), and trade and services (or the tertiary sector).
At a low level of economic development, one finds predominance of the
primary sector. The predominance of any sector can be viewed from the
sectoral composition of national income and occupational structure.
When, in an economy, the primary sector is considered as the
predominant one then it means that the contribution of this sector
towards national income is the largest.
Not only this, the bulk of the population derives their livelihood from this
sector.
On the other hand, in the sectoral composition of national income as well
as in the occupational pattern, the importance of the secondary and
tertiary sectors gets reduced. As economic development proceeds, the
interrelationships among these sectors undergo a change.
As economic development takes place, the primary sector (from the
standpoint of sectoral composition of national income and occupational
pattern) loses its importance and secondary as well as tertiary sectors
gain in importance. Thus, structural changes indicate economic
development. This is what Colin Clark hypothesised.
We will see whether structural changes have taken place in India during
the Plan Period:

i. Sectoral Composition of National Income:

In 1950-51, the contribution of the primary sector towards India’s gross
domestic product or GDP was nearly 55.9 p.c., while it was 14.9 p.c. for the
secondary sector-Since then there has been a steady decline in the share
of the primary sector in GDP and it declined to 19.4 p.c. in 2007-08.
On the other hand, over the plan period, as the industrial sector
expanded, its contribution to GDP has been on the rise and it rose to 25
p.c. in 2007-08.
Along with the growth of the secondary sector, the services sector also
registered a higher growth rate. In 2007-08, its contribution was 55.7 p.c.
Thus, it is clear that as economic development took place during the last
five decades of planning, the primary sector lost its pre-eminence, as
against 29.2 p.c. in 1950. This, of course, is a sign of economic
development.
The GDP growth rate between 1950-51 and 1979-80 came to be known as
the ‘Hindu rate of Growth’ of 3.5 p.c. p.a. But this long-term trend has
been broken and in 2006-07 GDP growth rate went past 9 p.c. p.a. along
with the rising growth trend of especially the service sector and then
industry sector. But the primary sector’s performance is rather
unsatisfactory in the current year.
It is clear that despite the green revolution in agriculture, the share of the
primary sector to GDP has been continuously declining. However,
between 1980-81 and 1991-92, the primary sector displayed a better
growth rate. Variation in the performance of agriculture is always worth
noticing.
In the last three or four years, because of the good monsoon, the
agricultural growth rate was remarkable, but in the year 2007-08, its
performance has slackened to a larger degree.
Further, the secondary and tertiary sectors are continuously growing at a
double rate than that of the primary sector during the first decades. In the
subsequent periods, the tertiary sector outstripped the growth of the
secondary sector.
Unfortunately, between 1990-91 and 2007-08, there has been a fall in the
growth of the secondary sector from 25.2 p.c. to 24.9 p.c. Thus, the pattern
of structural changes that has taken place in India has deviated from
developed economies.
Present growth trend is dominated by the services sector. Very aptly, it is
called service-led growth. But what we see in India is the ‘excess growth
of the service sector’. Possibly, India may display a new paradigm of
development.
Another important aspect of sectoral composition of national income is
the contribution of the public sector towards GDP. As time progresses,
the contribution of this sector rises. In 1970-71, the public sector
contributed 14.9 p.c. towards GDP, but it rose to 24 p.c. in 2001-02.
However, following the introduction of new economic policy in 1991, the
contribution of public sector enterprises towards GDP is on the decline.
Their share in GDP at market prices declined from 11.68 p.c. in 2004-05 to
11.12 p.c. in 2005-06.
Finally, one can notice a structural change by studying the contribution of
the commodity sector and non-commodity or service sector in net
national product. Between 1950-51 and 1976- 77, the rate of growth of the
services sector (4.90 p.c.) was satisfactory as compared to the growth of
the commodity sector (2.90 p.c.).
Furthermore, between 1980-81 and 1995-96, growth rate of the
commodity sector came to 5.30 p.c., while that of the services sector rose
to 6.50 p.c. Same story has been repeated for the period 1991 -2008.
Expansion of the tertiary sector is tantamount to modernisation. Yet, we
must say that the growth of the services sector at the expense of the
commodity sector is undesirable. Though sectoral composition of national
income itself indicates economic development, the growth of the service
sector at the cost of the commodity sector reflects some sort of ‘structural
retrogression’.

ii. Occupational Pattern:

In the light of structural change, one finds India’s occupational structure
as a static one. But we know that as economic development takes place,
occupational structure also undergoes a change. The Clark- Fisher thesis
says that, in an expanding economy, the employment situation shifts
more and more in favour of secondary and tertiary sectors.
That is to say, the number of people engaged in the primary sector tends
to decline while it tends to rise in the other two sectors.
This sort of change in the occupational structure indicates economic
development. But, considering the development of the Indian economy
in the last six decades, recently one finds some favourable change in the
occupational structure of India. Throughout the 20th century, the
percentage of people engaged in agriculture has not fallen appreciably.
Even in 2001, 57 p.c. of the total population were engaged in the primary
sector, compared to 72.1 p.c. in 1951.
On the other hand, between 1951 and 1981, the percentage of the
population engaged in the secondary sector increased marginally from
10.6 p.c. to 13.5 p.c. but it declined to 12.7 p.c. in 1991 and then rose to 17.5
p.c. in 2001. The only sector that showed a steady rise in employment is
the tertiary sector. It rose from 17.3 p.c. in 1951 to 25.8 p.c. in 2000. This is
shown in Table 12.4.

Thus, it is clear that the occupational pattern is not only a static one but
also an unbalanced one. In view of this, V. K. R. V. Rao commented that
India’s occupational structure exhibits ‘structural retrogression.’ This, of
course, is not a healthy sign and it explains underdevelopment.
The reasons behind such static occupational structure are:
(i) Massive rise in population, and
(ii) Inadequate growth of both industries and services sector. Only in
recent years (2004-05), there has been a drop in the number of people
dependent on agriculture. It is around 52 p.c.
iii. Development of Basic and Heavy Industries:
Immediately after independence, India’s industrial structure was devoid
of any heavy and basic industries. In other words, India’s industrial
structure at that time tilted heavily in favour of consumer goods
industries. But under the impact of planning, especially the Second Five
Year Plan (1956-1961), industrial structure had been diversified and newer
and newer types of industries had been set up. This symbolises economic
development.
iv. Economic and Social Capital Formation:
By social capital we mean transport, irrigation, power, education, health,
etc. Building up social capital is one of the prerequisites of economic
development. Infrastructural development helps quicker economic
development. So, social capital formation is equivalent to economic
development. During the plan period, we have made rapid strides in
respect of construction of railway lines, irrigation, power, health and
sanitation, education, etc.
Q7. Energy security is a key aspect in India's development.
ANSWER: India imports 80 percent of its oil needs and is the third largest
oil consumer in the entire world.
India’s energy consumption is expected to grow 4.5 percent every year for
the next 25 years.
Recently due to high International Crude Oil Prices, Current Account
Deficit (CAD) inflated because of higher cost of oil import, raising
concerns about long term economic stability in India, highlighting
importance of energy security.
On account of rising CAD, Indian Rupee touched its lowest.

Energy security
It is defined as the uninterrupted availability of energy sources at an
affordable price.
Long-term energy security deals with timely investments to supply
energy in line with economic developments and environmental needs.
Short-term energy security focuses on the ability of the energy system to
respond promptly to sudden changes in the supply-demand balance.

Significance of Energy security

India aims to become a leading global economic power which will fuel
energy needs for providing infrastructure, provisioning of basic
necessities, developing human skill, employment generation and
manufacturing abilities.
India’s economic fortunes continue to be tied to the sharply fluctuating
international price of oil.

Measures to enhance energy security

Increasing accessibility to clean energy:
India has already committed to bring electricity to every household by
2022. An even more ambitious goal would be to provide electricity to all
households on a 24×7 basis.
To bring clean fuel in rural areas the Pradhan Mantri Ujjawala Yojana,
should be complemented by: Setting up of biomass pelletising units; and
distribution of ‘ efficient biomass chullahs’.
On the agricultural front, the solar irrigation pump distribution target
must be stepped up and financed through credit support from NABARD
and government subsidy.
The potential non-conventional energy sources must be explored and
researched to make them technologically economical and accessible, like
geothermal energy, tidal energy etc.
Enhancing efficiency:
The National Mission for Enhanced Energy Efficiency (NMEEE) should
conduct a thorough cost-benefit analysis of the available energy-efficient
technologies and products across all sectors, especially agriculture,
housing and transportation.
At the institutional level, the national and state designated agencies
working in the area of energy efficiency should be strengthened.
To enhance vehicle fuel efficiency gains, the auto fuel quality should be
upgraded to BS VI norms for nation-wide launch in 2020.
Policy changes:
Around three-quarters of our power comes from coal powered plants. It is
important that India increases its domestic coal to reduce its dependence
on imports. There is a need to fast track the regulatory clearances,
improve labour productivity, increase coal production and enhance
efficiency of distribution.
Hydrocarbon Exploration and Licensing Policy (HELP) intends to minimise
government's discretion in decision making, reduce disputes, reduce
administrative delays and introduce the concept of revenue sharing,
freedom of marketing to stimulate growth in the oil and gas sector in
India.
The tax structure should be rationalised in import and sale of energy on
thermal value basis with a view to enhance the competitiveness of the
economy.
The INDIA ENERGY SECURITY SCENARIOS, 2047(IESS) has been
developed as an energy scenario building tool. The guiding ambition of
this is to develop energy pathways leading up to the year 2047,
comprising likely energy demand and supply scenarios.
NITI Aayog launched the India Energy Security Scenarios 2047
calculator (IESS 2047), as an open source web based tool.
The tool aims to explore a range of potential future energy scenarios
for India, for diverse energy demand and supply sectors leading up
to 2047.
It explores India’s possible energy scenarios across energy supply
sectors such as solar, wind, bio fuels, oil, gas, coal and nuclear and
energy demand sectors such as transport, industry, agriculture,
cooking and lighting appliances. The model allows users to
interactively make energy choices, and explore a range of outcomes
for the country-from carbon dioxide emissions and import
dependence to land use.
Infrastructure:
Augment refining and distribution of oil and gas. India should sustain its
export capacity of refined products by setting up new refineries.
At present, 31 companies are developing City Gas Distribution (CGD)
networks in 21 states for transportation or distribution of natural gas to
consumers in domestic, commercial or industrial and transport sectors
through a network of pipelines.
For the hydro projects, the government will need to make efforts to
expedite progress on capacity under construction through satisfactory
Rehabilitation & Resettlement implementation.
India has also built its strategic petroleum reserves in order to meet any
supply shocks due to any external exigencies like wars, natural disasters
etc. Indian Strategic Petroleum Reserves Ltd, a special purpose vehicle
under the Oil and Gas Ministry, has constructed three strategic petroleum
reserves in huge underground rock caverns at Visakhapatnam on the
East Coast, and at Mangalore and Padur on the West Coast.
These facilities, with a total capacity of 5.33 million tonnes, can meet
about 10 days of India’s crude oil requirements. India now plans to build
another 6.5 million tonnes of storage at Padur and Chandikhol in Odisha
which will augment its supply to 22 days.
India’s Energy diplomacy:
India is setting up a web of energy relationships in the extended
neighbourhood covering Myanmar, Vietnam in the east, with Central
Asian countries like Kazakhstan and Gulf countries in the west.
The Indo-US Nuclear deal opened new vistas for India in the field of
Nuclear energy facilitating cutting edge technology and nuclear fuel.
India has started to engage with China, Kazakhstan and Australia for
nuclear fuel.
India's SCO membership could now play a bigger role in ensuring greater
energy cooperation between energy producers and consumers by linking
Central Asia and South Asia.
Promotion of Renewable Energy
A renewable energy capacity of 100 GW should be achieved by 2019-20 so
as to contribute to the achievement of the 175 GW target by 2022.
Solar Energy Corporation of India Limited (SECI) should develop storage
solutions within the next three years to help bring down prices through
demand aggregation of both household and grid scale batteries.
A large programme should be launched to tap at least 50% of the biogas
potential in the country by supporting technology and credit support
through NABARD by 2020.