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Wednesday, June 27, 2012

India’s slowdown--Farewell to Incredible India

Bereft of leaders, an Asian giant is destined for a period of lower growth. The human cost will be immense



In a world economy as troubled as today’s, news that India’s growth rate has fallen to 5.3% may not seem important. But the rate is the lowest in seven years, and the sputtering of India’s economic miracle carries social costs that could surpass the pain in the euro zone. The near double-digit pace of growth that India enjoyed in 2004-08, if sustained, promised to lift hundreds of millions of Indians out of poverty—and quickly. Jobs would be created for all the young people who will reach working age in the coming decades, one of the biggest, and potentially scariest, demographic bulges the world has seen.
But now, after a slump in the currency, a drying up of private investment and those GDP figures, the miracle feels like a mirage. Whether India can return to a path of high growth depends on its politicians—and, in the end, its voters. The omens, frankly, are not good.
 
In office but not in power Some of this crunch reflects the rest of the world’s woes. The Congress-led coalition government, with Brezhnev-grade complacency, insists things will bounce back. But India’s slowdown is due mainly to problems at home and has been looming for a while. The state is borrowing too much, crowding out private firms and keeping inflation high. It has not passed a big reform for years. Graft, confusion and red tape have infuriated domestic businesses and harmed investment. A high-handed view of foreign investors has made a big current-account deficit harder to finance, and the rupee has plunged.

The remedies, agreed on not just by foreign investors and liberal newspapers but also by Manmohan Singh’s government, are blindingly obvious. A combined budget deficit of nearly a tenth of GDP must be tamed, particularly by cutting wasteful fuel subsidies. India must reform tax and foreign-investment rules. It must speed up big industrial and infrastructure projects. It must confront corruption. None of these tasks is insurmountable. Most are supposedly government policy.

Why, then, does Mr Singh not act? Vacillation plays a role. But so do two deeper political problems. First, the state machine has still not been modernised. It is neither capable of overcoming red tape and vested interests nor keen to relax its grip over the bits of the economy it still controls. The things that do work in India—a corruption-busting supreme court, the leading IT firms, a scheme to give electronic identities to all—are often independent of, or bypass, the decrepit state.

Second, as the bureaucracy has degenerated, politics has fragmented. The two big parties, the ruling Congress and the opposition Bharatiya Janata Party (BJP), are losing support to regional ones. For all the talk of aspirations, voters do not seem to connect reform with progress. India’s liberalisers over the past two decades, including Mr Singh himself, have reformed by stealth. That now looks like a liability. No popular consensus exists in favour of change or tough decisions.

As a result, when the government tries to clear bottlenecks, feuding and overlapping bureaucracies can get in the way. When it suggests raising fuel prices, it faces protests and backs down. When it tries to pass reforms on foreign investment, its populist coalition partners threaten to pull the plug. It does not help that the ageing Mr Singh has little clout of his own: he reports to the ailing Sonia Gandhi, the dynastic chief of Congress. With a packed electoral timetable before general elections in 2014, Congress does not want to take risks.

Is it time for a change at the top? Mr Singh has plainly run out of steam, but there are no appealing candidates to replace him. Mrs Gandhi’s son, Rahul, has been a disappointment. What about a change of government? The opposition BJP is split and has been wildly inconsistent about reform. Its best administrator, Narendra Modi, chief minister of Gujarat, is divisive and authoritarian. If it formed a government tomorrow, the BJP would also have to rely on fickle smaller parties.

Some reformers pray for a financial crisis that will shake the politicians from their stupor, as happened in 1991, allowing Mr Singh to sneak through his changes. Though India’s banks face bad debts, its cloistered financial system, high foreign-exchange reserves and capable central bank mean it is not about to keel over. A short, sharp shock would indeed be useful, but a full-blown crisis should not be wished for, because of the harm that it would do to the poor.

Instead the dreary conclusion is that India’s feeble politics are now ushering in several years of feebler economic growth. Indeed, the politicians’ most complacent belief is that voters will just put up with lower growth—because they supposedly care only about state handouts, the next meal, cricket and religion. But as Indians discover that slower growth means fewer jobs and more poverty, they will become angry. Perhaps that might be no bad thing, if it makes them vote for change.

(From: The Economist, Jun 9th 2012)

Tuesday, June 12, 2012

Model Answers to GS(Mains) Questions within strict word limit

 1.What is deficit financing?
Deficit financing refers to financing the excess of government expenditure over its revenue through printing of currency notes or through borrowings.
2. Define poverty line.
An income level that is considered necessary to satisfy a minimum nutritional requirements of a person is called poverty line.
3. What is PDS?
The Public Distribution System is a system of management of scarcity and for distribution of food grains at affordable prices.
4. Differentiate between plan and non-plan expenditure.
The expenditure in developing ‘planned’ projects is plan expenditure while that on maintenance and running of the existing projects is known as non-plan expenditure.
5. What do you mean by democratic planning?
Planning is ‘democratic’ if people are associated at both formulation and implementation stages and it is finalized through debate among people’s representatives.
6. What is regional planning?
Regional planning is a sort of spatial planning at various territorial levels (such as block/district/state) for achieving sustainable development for the region.
7. Define recession.
A recession is a decline in a country's gross domestic product growth for two or more consecutive quarters of a year.

Friday, June 8, 2012

IAS Success Secrets --A Lecture by Prof.S.Maitra at CII – Suresh Neotia Centre of Excellence for Leadership

Hard work:
Remember that there is no substitute to hard work. All successful candidates say the hard work is one of the first pre-requisites for the success. There is no short cut to success and hard work never goes unrewarded.
Planning and systematic study:
Proper planning right from the stage of selection of optional subjects and selection of text books is absolutely necessary. Though there is no one way of studying, there are ways to study more effectively and with less stress and more enjoyment. It is important to know how to make use of the sources available to you in the best possible way. It is wise to take a three pronged approach to preparation, reading to learn, making effective notes and able to write answers to various kinds of questions.
Time management:
Effective time management is another requirement. If we spend our time in a frenzy of activity, we can achieve very little because we are not concentrating on the right things. We keep hearing the word "Busy" a lot. There are two kinds of ‘busy’(ness): chaotic, disorganized busy and calm, effective busy. It goes without saying that being the latter helps to pack in more productivity in your work. Improving our "effectiveness quotient" calls for mastery of basic time management skills.
Self-confidence:
Your self-confidence can make the difference. Your self-confidence should be at an all time high - always. You should be in the company of people, who can increase your motivational levels high and can inspire you. Form a group of close friends, who are as determined as you are to make it to the Civil Services Examination.
Dedication:
Be totally dedicated and focused in your studies. You have to sacrifice something like movies, parties, and entertainments etc at this stage of your life to achieve bigger things.
Patience:
As the CSE preparation spans a minimum of one year, right from the Preliminary stage to the interview state, it requires a lot of patience to maintain your tempo. One should not lose patience and the tempo throughout the preparation period till success.

Tips for answering questions at the Prelims:
( I am indebted to Mr. Parvez Dewan, IAS for giving me some of these tips.)
Don’t waste time:
Start answering the questions from the minute you get them. The time allotted is very limited, so waste no time on reading the entire question paper first. First answer all the question you are sure you know the answers to. Skip all the difficult questions in the first round: in this round if you find yourself stuck in a question for more than 10 seconds, just skip it.
However, keep making a small mark on the question paper to indicate that you have skipped that question in the first round. This will enable you to save time in the next rounds. If you answer a question in the second round, cancel this mark, so that in third round you know which questions still remain unanswered. Three rounds should be sufficient, bur you could break the process into a fourth round too.
Allocate time for each answer:
In GS Prelims, if are to answer 150 questions in two hours, you have an average of 48 seconds for each questions. So on pro rata basis you should answer 25 questions every 20 minutes. But be harsh with yourself in the first hour. .
Thus if in the first 20 minutes you haven’t answered 35-40 questions, you should tell yourself that you are not doing well. This is because in the first hour you will be answering the easiest questions and in the last half-hour you will need plenty of spare time for “logic and guesswork”. Even bright candidates sometimes find themselves slower than the pro-rata speed in the first half-hour. So unless you consciously try to be faster than that speed, you will run into trouble later.
Negative marking:
There will be penalty for wrong answers marked by a candidate in the objective type question papers. There will be four alternatives for the answer to every question. For each question for which a wrong answer has been given by the candidate, one-third (0.33) of the marks assigned to that question will be deducted as penalty. If a candidate gives more than one answer, it will be treated as a wrong even if one of the given answers happens to be correct and there will be same penalty. But if a question is left blank, i.e. no answer is given by the candidate, there will be no penalty for that question. Hence you need be very cautious in the second and third rounds when you are attempting those questions you are fairly, but not absolutely, certain about or those questions that you know absolutely nothing about.

Saturday, June 2, 2012

IAS Main Previous Year Question Papers

2009
1. Answer any one of the following questions (in about 250 words each) 30
a) Comment on the salient features of the Integrated Energy Policy recently approved by the government and its implication on the energy security needs of the country.
b) How far has impact of the global meltdown been reflected in the Economic Survey 2008-09? Identify some of the core areas given priority to neutralize the adverse effects of the global downturn.
2. Comment critically on any one of the following statements in not more than 200 words: 20
(a) “Foreign investment is far from being critical to India’s economic growth.”
(b) “The lesion of the current global financial crisis is that India should halt and may be even reverse financial liberalization.”
3. Answer any one of the following in about 200 words: 20
(a) “In the WTO negotiations over the years of the DOHA Round, India appears to be diluting its stand on agriculture issues to pursue perceived gains in services.” Critically examine the statement.
(b) Discuss the Indo-US knowledge initiative in Agriculture.
4. Answer any two of the following questions (in about 150 words each) 15×2=30
a) Evaluate the prospects for greater economic cooperation between India & China.
b) Does India need the World Bank ?
c) Critically assesses the recent Free Trade Agreement entered into by India with ASEAN.

2008
1. Answer any one of the following questions (in about 250 words each) 30
(a) “Globalisation has brought about a distinct class divide in India instead of ushering in a classless society.” Critically examine this argument.
(b) “The conditions of urban poor are more deplorable than that of their rural counterparts.” Give your views.
2. Answer any one of the following (in about 250 words): 30
(a) Discuss India’s stand on agricultureal issues in WTO’s Ministerial Conferences since Doha Round.
(b) Assess the performance of India in attracting Foreign Direct Investment (FDI).
3. Answer any two of the following (answer to each question should be in about 150 words) 15x2=30
(a) Assistance to the States for Development of Export Infrastructure and other Activities (ASIDE).
(b) Convertibility of Indian Rupee.
(c) India on Global Competitiveness Index-2007.
4. Write about the following (answer to each question in about 20 words):
5x2=10
(a) Special Drawing Rights (SDRs)
(b) NAMA
(c) Non-tariff barriers
(d) Current Account Balance
(e) Free Trade Area

2007
1. Answer anyone of the following (in about 250 words): 30
(a). What is Dumping? Evaluate the remedial measures taken by Government of India vis-à-vis WTO provision regarding dumping.
(b) Comment on the relationship between credit availability and agricultural growth in India.
2. Answer any two of the following (answer to each question should be in about 150 words) 15x2=30
(a). What is the meaning and aim of social forestry ? What are the main weaknesses noticed in social forestry programme?
(b). Bring out the main objective of Rastriya Krishi Bima Yojana. The scheme is being implemented by which agency.
(c). Explain Mega Food park Scheme of Government of India.
3. Write about the following (answer to each question should be in about 20 words): 2x15 = 30
(a) Explain the term Merit Goods
(b) What is Cheap Money?
(c) What is Countervailing Duty?
(d) What is Hot Money?
(e). Explain the Concept Trickle Down Theory
(f) What is Stagflation?
(g) What is Engel's Law?
(h) Meaning of CCIL
(i) What is Administered Price?
(j) What is Venture Capital?
(k) Explain the term Balance on Current Account
(I) What is Consolidated Fund?
(m) What is Budget Deficit?
(n) Explain the term Most Favoured Nations.
(0) Meaning of Capital-Output Ratio.

2006
1. Answer any one of the following (in about 250 words each) : 30
(a) Discuss the importance of World Trade Organisation of Indian Economy in the light of various
opportunity and challenges at the global level.
(b) Describe the main sources of industrial finance in India. How India could be benefited from recent developments in international finance?
2. Answer any two of the following (in about 150 words each): 15x2=30
(a) Discuss the role of public sector during the post-reform period of Indian economy.
(b) Examine the effects of globalisation on poverty removal in India.
(c) What are the implications of gender disparities in India.
3. Answer the following (in about 20 words each) : 2x10=20
(a) What is Philips curve ?
(b) What is Hundi?
(c) What is twin deficit?
(d) What is the main difference between free trade area and common market?
(e) What is forward currency market?
(f) What is Laffer curve?
(g) What is Eurobonds?
(h) What is disguised unemployment?
(i) What are nifty junior?
(j) What is Agri-Trade?
(k) What is CEMA bloc ?
(l) What is rolling settlement ?
(m) What is Difference between Green Box subsidies and Blue Box subsidies?
(o) What are non factor services in India’s Balance of payment?

2005
1. Answer anyone of the following (in about 250 words): 30
(a) Discuss the causes and ramifications of hunger in Africa.
(b) What are the reasons for industrial sickness in India? Suggest suitable remedies.
2. Answer any two of the following (answer to each question should be in about 150 words): 2 x 15 = 30
(a) What is the role of external financial assistance in Indian economy?
(b) Enumerate the objectives of Latin American Reserve Fund. Do you favour such a fund for Asian countries?
(c) Examine the functions of the European Free Trade Association.
3. Answer or write about the following (in about 20 words each): 15x2=30
(a) What is Mekong - Ganga Co-operation?
(b) What is IFC?
(c) Crude oil price and Indian economy
(d) What is Gandhian economy?
(e) Second Green Revolution
(f) Kasturba Gandhi Balika Vidyalaya Yojana
(g) What is Euro-control?
(h) Dow Jones
(i) 'Bluetooth
(j) MFN status to India: Pakistan
(k) The notion of development of under-development
(I) Cost-push inflation
(m) What is Green GDP?
(n) What were the terms of reference of the Abid Hussain Committee?
(0)What is structural unemployment?

2004
1. Answer any ONE of the following (in about 250 words): 30
(a) State the comprehensive structural reforms under-taken to improve the Indian economy since 1991.
(b) How is poverty level measured? Evaluate poverty eradication programmes in India.
2. Answer any TWO of the following (in about 150 words each): 15x2= 30
(a) Describe the recommendations of Narasimham Committee regarding the banking sector in India.
(b) Examine the effect of economic development on environmental degradation in India.
(c) What ails India's road transport economy? Suggest measures of remedy.
3. Answer the following (in about 20 words each): 2 x 15 = 30
(a) What are the major provisions of Agreements on Agriculture in the context of World Trade Organisation?
(b) Elucidate Special Drawing Rights.
(c) What is Cash Reserve Ratio?
(d) What does "priority sector lending" mean?
(e) What is Minimum Alternative Tax (MAT)?
(f) What is Business Process Outsourcing (BPO)?
(g) What is 'social justice' in the context of Indian economy?
(h) Explain the objectives of Plant Varieties Right Act, 2002.
(i) How is human development index for life expectancy measured?
(j) What are the objectives of the Twelfth Finance Commission?
(k) Explain the necessity and role of controls in a mixed economy like India.
(i) Distinguish between primary sector, secondary sector and tertiary sector. What is the change in the share of each sector in Gross Domestic Product (GDP) during period of 1950--2000?
(m) What is the main objective of Security and Exchange Board of India (SEBI)?
(n) What has been the policy of agricultural development during last two decades in India?
(0) What is deficit financing?

2003
1. Answer any one of the following (about 250 words) 30
a) Write a note on the strategy of planning in India since 1951.
b) What were the major recommendations of the Task Force on direct taxes appointed under the Chairmanship of Shri Vijay L. Kelkar?
2. Answer any two of the following (about 150 words) 15X2=30
a) Outline the important objectives of the Tenth Five Year Plan.
b) What is a Finance Commission?
c) Point out the measures undertaken towards flexibility in capital account transactions during the recent past.
3. Answer the following (about 20 words) 2X15=30
a) What is Plan Holiday?
b) Why did India have a surplus in current account balance in 2001-02 after a gap of 24 years?
c) What is Value Added Tax?
d) What is the main objective of the Competition Act, 2002?
e) Name the two agencies that have helped to promote Foreign Direct Investment in India.
f) What is the main thrust of the Fiscal Responsibility and Budget Management Bill?
g) Highlight the main features of the policy relating to buy-back of shares.
h) Why was Janashree Bima Yojana introduced?
i) When was the idea of Agriculture Insurance Corporation mooted?
j) What is the policy of the Government with respect to child labour?
k) Explain the objectives of the National Health Policy, 2002.
l) What was the main objective of the ‘Operation Blackboard’ scheme?
m) Explain the essential feature of differential rate of interest scheme.
n) Which are the three major items of expenditure of the Government of India on revenue account?
o) What was the essential feature of the Pradhan Mantri Gram Sadak Yojana?

2002
1. Answer any one of the following (about 250 words) : 30
(a) Outline the main targets fixed in the National Population policy 2000. What have been the follow up
measures to this policy?
(b) The main thrust of the EXIM Policy 2002-07 is on creating a framework for enhancing India’s export
capability. In the light of this statement outline the salient features of EXIM Policy 2002-07.
2. Answer any two of the following (about 150 words) : 15x2=30
(a) What are ‘Minimum Support Prices’ in agricultural products? What are their objectives?
(b) Outline the main objectives and achievements of the policy of disinvestment in India?
(c) With what objectives was ‘Essential Commodities Act 1955’ amended last year?
3. Answer the following (about 20 words) 2x15=30
(a) What is the peak rate of Custom duty? What are its objectives in India?
(b) Define fiscal deficit.
(c) Explain the provision of OGL.
(d) Elucidate ‘Special Economic Zones’
(e) Highlight the salient feature of ‘National Highway Development Project’
(f) What is the role of SEBI
(g) Explain RBI’s Automatic Route in FDIs.
(h) With what objectives was the ‘Annapurna’ scheme launched?
(i) Elucidate ‘Sampoorna Gramin Rozgar Yojana’
(j) The union budget 2002-03 recommended some services to be taxed. Name any 4 of these services.
(k) What is dumping? What is its objective?
(l) What do you understand by ‘Capital account Convertibility’ of Rupee?
(m) Define Sex ration in the population of India. What is its present status?
(n) Distinguish between ad-valorem and specific duties.
(o) Define zero-based budget.

2001
1. Answer anyone of the following.(Answer should be in about 250 words) 30
(a) What is the incidence of poverty in India ? How should poverty alleviation programme be constructed?
(b) Indian Economy presents a paradox of high saving rate with low income and high saving rate with low growth rate. Analyze.
2. Answer any two of the following. (Answer to each question should be in about 150 words): 2 x 15 =30
a). Liberalization of Indian Economy since 1991 has led to excessive consumerism and over production of white goods’ Elucidate.
b). What are the hurdle faced by finance Ministers of India in keeping the fiscal deficit below 3-4 percent of the GDP ? Suggest steps to lower the fiscal deficit?
c). Discuss the nature and causes of the UTI Crisis with particular reference of US 64. How does this UTI fiasco affect the investment climate in India?
3. Answer the following. (Answer to each question should be in about 20 words) : 2 x 15 = 30
a) What is “ CRISIL” ? What does it do ?
b) What do you understand by “Current Account Convertibility of Rupee” ?
c) What do you mean by proving industry status to agriculture in India ?
d) Elucidate “ Operation Flood “
e) Expand the Term “ Nasdaq “
f) Differentiate between “ Galloping Inflation “ and “ Running away inflation”
g) What is meant by “ couple protection Ratio”
h) Distinguish between “ Human development Index “ and “ Gender related development Index”.
i) What is Green GNP
j) Distinguish between a “ Hard “ currency and a “ soft “ currency.
k) Explain “ rolling plan “ .
l) Illustrate Lorenz curve
m) What is meant by “ Trickle Down “ theory of development.
n) What is “ misery index “.
o) What is meant by “ Most favoured Nation” policy?

2000
1. Answer anyone of the following. (Answer should be in about 250 words) 30
(a) India is rapidly emerging as an Information Technology (IT) Superpower. Discuss some aspects of the growth of this Sector in the Indian economy. What role can public policy play in further enhancing growth prospects in this Sector?
(b) Control over growth of population in India is an essential condition for the country's rapid economic development. Discuss.
2. Answer any two of the following. (Answer to each question should be in about 150 words): 2 x 15 =30
(a) Discuss the reasons for the failure of the Seattle Millennium talks on the WTO (World Trade Organisation). Discuss some implications of this failure for the Indian economy.
(b) What is (Revised) Targeted Public Distribution System? What are its main features?
(c) Discuss the economic effects of Black money (Parallel economy) in Indian economy.
3. Answer the following. (Answer to each question should be in about 20 words) : 2 x 15 = 30
(a) What are the main objectives of the 9th Five-Year Plan of the Government of India?
(b) Write a note on MODVAT Scheme of 1986.
(c) Explain per capita income as a measurement of economic growth.
(d) What are the objectives of Social Security?
(e) What do you mean by 'Parallel Economy’?
(f) Describe the use of 'Command Area Development' in India.
(g) What is ICOR (Incremental Capital Output Ratio)?
(h) What are the main objectives of NABARD?
(i) What do you know about 11th Finance Commission?
(j) What do you mean by revenue deficit in the Central Government's Budget?
(k) How has the Census (1991) defined the Urban Areas?
(l) What are the objectives of New Economic Policy of the Government of India?
(m) Write a note on Rao-Manmohan model of development.
(n) What is the rational for 'Mid-day Meal' Scheme?
(o) What has been the impact of the recent economic reforms programme on the incidence of poverty in India?

Strategic subdivision of syllabus for comprehensive and better coverage:(done and followed by Prof.S.Maitra)
 Structure of the Indian Economy
 Aspects of Indian Economy
 Planning and Indian Economy
 India and the World (only economic aspects)
 Globalisation and Indian Economic Reforms

IAS Mains GS Indian Economics Syllabus 2012

Paper: I
(i) The Indian economy and issues relating to planning, mobilization of resources, growth, development and employment.
(ii) Issues arising from the social and economic exclusion of large sections from the benefits of development.
(iii) Other issues relating to the development and management of human resource.
Paper: II
2. India’s Economic Interaction with the World
In this part, questions will be on economic and trade issues such as foreign trade, foreign investment; economic and diplomacy issues relating to oil, gas and energy flows; the role and functions of I.M.F., World Bank, W.T.O., WIPO etc. which influence India’s economic interaction with other countries and international institutions.