SECURE SYNOPSIS: 21 January 2017
NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.
General Studies – 1;
Topic: Social empowerment; poverty and developmental issues
Economic inequality is the difference found in various measures of economic well-being among individuals in a group, among groups in a population, or among countries. Economic inequality sometimes refers to income inequality, wealth inequality,
Oxfam is an international confederation of charitable organizations focused on the alleviation of global poverty. Oxfam was founded at 17 Broad Street in Oxford, Oxfords hire, in 1942 as the Oxford Committee for Famine Relief by a group of Quakers, social activists, and Oxford academics; this is now Oxfam Great Britain, still based in Oxford. It was one of several local committees formed in support of the National Famine Relief Committee. Their mission was to persuade the British government to allow food relief through the Allied blockade for the starving citizens of occupied Greece or the wealth gap.
- In 2016, the richest 1 per cent in India owned nearly 60 per cent of the country’s total wealth; in contrast, the equivalent figure for most western European nations is between 20 per cent to 30 per cent.
- The top 20 per cent commanded a staggering 80 per cent, while the entire bottom half of the country owned a pathetic 2 per cent. In the past six years, this share of wealth has shot up by an astounding 45 per cent.
- The real income growth for the rich has increased 300 times in the last 3 decades but for the most of the people, the real growth has been zero.
- A Credit Suisse Report of October 2015 had already found that the richest 1% of the world’s population had the same amount of wealth as the other 99%. But Oxfam reveals that the wealth of the bottom 50% of the global population is actually lower than was previously estimated so it takes just 8 people to equal the total wealth of half of the world’s people.
THE CAUSES OF HUGE INEQUALITY:-
- Historical Causes: Imperialism is one of the major causes of the inequality among the developed and developing nations. The imperialist countries looted the other countries to generate wealth for themselves.
- Cultural Causes: Due to cultural reasons where people of different race and class were seen differently and hence, given less opportunities. In the same way, women were not given opportunities who forms 50% of the population.
- Geographical Causes: One of the reasons of inequality is geographical reasons where few regions have more natural resources which help in economic terms. Some areas with better weather also help work conditions more than the extreme weather places.
- Political Causes: The ultra-rich who buy the government bonds are able to influence government policies for themselves. Political divide and Imperilaism in previous centuries which brought class and divided people in such a way that supported deep inequality
- Economic Causes: a) Powerful management set their own compensation b) The already rich has money and the money works through investment which is way faster than a labor working somewhere. Even when the rich sleeps, his money works 24*7
- Environmental Causes: Through industrial revolution, the developed countries polluted the whole world and now they are working towards cleaner environment. This forces the other countries to follow the norm but they are still not able to handle technologies of the renewable energy. Thus, this keeps them confused in a way.
- Anthropological Causes: The way society has developed over time, the poor society is different from the modern one and it takes time to develop with the same rate as the rich ones. Gender inequalityhas been a reason for economic inequality as well.
SOLUTIONS TO END INEQUALIY:-
- Acceptance of common but differential role in environmental forum.
- larger voice to third world in institution like IMF,UN
- Humanistic capitalism : innovation and surplus used to generate more employment
- Sustainable growth model
- Resource distribution: land, credit, skills via quality education and healthcare
- Pro poor reform model
- Gendered budget emphasizing on skilling and providing employment
- Striking roots of social evil eg patriarchy, caste, and communalism
- Bringing in the wealthy people within thetax-net through inheritance tax, income tax, etc.
- Promotingskill development and vocational training through schemes like Skill India, Stand up India, etc.
- Eliminating gender-based discriminationby ensuring equal pay for equal work, higher minimum wages, greater participation of women in workforce.
- Providinguniversal social protection schemes.
- Production shouldnot be pushed to such an extent that it totally exploits the workers.
- Sustainable Production: Rather than focusing on GDP, it should focus on improving the conditions of lower strata of society
General Studies – 2
Topic: Salient features of the Representation of People’s Act.
2) It is said that the Supreme Court’s judgment on sectarian appeals during election campaigns interprets the Representation of the People Act, 1951 correctly and to its intended effect. Do you agree? Justify. (200 Words)
In a judgment which could have significant impact on electoral politics, the Supreme Court of India has held by a razor thin majority that Section 123(3) of the Representation of People Act, 1951 has to be given a broad and purposive interpretation.
Section 123(3) of the Representation of Peoples Act states that the promotion of, or attempt to promote, feelings hatred between different classes of the citizens of India on grounds of religion, caste, community, by a candidate is legally banned.
It’s an important verdict with positive fallouts like:-
- It will be very useful in preventing communal violence and sectarian clashes in election time.
- Decision provides a fair and level playing field for the candidates as it prohibits identity politics.
- It underlines the principle that representatives must be chosen on the basis of rational decision which could put efforts on development rather than on emotional basis of caste, religion appeal.
Recent judgment doesn’t underscore the interpretation to its intended effect:
- The judgment doesn’t stop politics on religious and caste basis. It’s also silent about vote bank politics.
- The verdict implies that caste and religious politics can be played for rest of the term of political period restricting it for 6 months only.
- It is silent about the political parties which are formed on basis of religious and sectarian names, symbols etc.
- Sectarian identities are closely linked to socio-economic issues. To address the legitimate demands of a community, sectarian mobilization is necessary eg. OBC mobilization before Mandal Commission.
- Enforcement of the provision will become a major challenge especially given limited powers of Election Commission of India and individual subjectivity
- Sectarian identity is often resorted when person’s socio economic position is inadequate for his self-identity. Therefor without inclusive development, it will continue.
- It also ignores that Indian Constitution also recognizes the basis of religion, caste and hence mobilization for historical un-justice on caste lines shouldn’t be banned.
Religion, caste and language are as much a symbol of social discrimination imposed on large segments of our society. They are part of the central theme of the Constitution to produce a just social order. Electoral politics in a democratic polity is about social mobilization and hence though intended to regulate elections the verdict may run into practical errors while implementing.
Topic: mechanisms, laws, institutions and Bodies constituted for the protection and betterment of these vulnerable sections
In a landmark decision, the Supreme Court bench comprising Justices Kurian Joseph and Rohinton Fali Nariman, directed the Gujarat Government to deposit Rs.3 lakhs each to the kin of 238 workers from Madhya Pradesh, who lost their lives due Silicosis, an occupational disease, which they contracted while working in stone crushing in Gujarat’s Godhra district.
Significance of judgment:
- It holds theaccountability of the state government and regulatory bodies like CPCB discharge their duties honestly & to look after the health of hazardous factory workers, especially in the unorganized sector.
- Enforced the FRguaranteed in Art.21(b) of the Indian constitution, Right to descent pollution free environment including air.
- Worker’s organizations might learn todemand for protection from occupational diseases apart from wages, working hours, jobs etc.
- Would make the factory owners and employers to takeprecautionary steps and to improve working standards in the hazardous industries.
- May help inproper implementation of the Employees’ State Insurance (ESI) Act of 1948 thereby helping workers or their families claim for benefit or injury death.
- Moreover, it might force the government at the national and state level toaddress the migrant workers issues through legislative and executive measures.
About 10 million workers are exposed to silica/quarts dust in India and most of them are in engaged in unorganized sectors. So, at this time this judgment becomes even more significant because it took in its purview the insecure unorganized sector.
What has already been lost cannot be compensated with money but it can be hoped that it will ensure a better future for many coming generations.
General Studies – 3
Topic: Effects of liberalization on the economy, changes in industrial policy and their effects on industrial growth.
A special economic zone (SEZ) is an area in which business and trade laws are different from rest of the country. SEZs are located within a country’s national borders, and their aims include: increased trade, increased investment, job creation and effective administration. To encourage businesses to set up in the zone, financial policies are introduced. These policies typically regard investing, taxation, trading, quotas, customs and labour regulations. Additionally, companies may be offered tax holidays, where upon establishing in a zone they are granted a period of lower taxation.The creation of special economic zones by the host country may be motivated by the desire to attract foreign direct investment (FDI).
India was one of the earliest Asian countries to establish a manufacturing- oriented SEZ. The first SEZ in India Was developed by the Central Government under the ‘export processing zone’ (EPZ) scheme in the port city of Kandla in Gujarat in 1965. Since then, SEZs have been an integral part of India’s export promotion policy. Subsequent to theKandla EPZ, the central Government established five more zones by the late 1980s and a seventh zone in 1994.
- ECONOMIC COST: the industrial development of the region will provide jobs to youth, support to local entrepreneurs, better infrastructure like roads, electricity housing etc, less migration, and thus promote literacy and skills up gradation. Therefore providing economic growth at local and national level.
- SOCIAL COST: helps in upward mobility of socially deprived classes, Outer world contact promote awareness about their rights, consciousness against the social evils like gender inequality, untouchability, etc
Social costs include:
- Loss of livelihood of farmers of farmers whose agricultural land is allocated for such non-agricultural purposes.
- Lower education standards in such families due to low income, hamper the regional growth
- Loss of forest land to set up industries and increasing diseases in the nearby region due to high pollution, leads to further degradation of social life
- Degradation of Rural empowerment: The rural population of the region is not consulted before setting up industries in the region, leading to more urbanization, with increasing pressure on cities
Economic costs include:
- SEZs are mostly concentrated in the more developed states of the country, leading to unbalanced regional growth
- The fertile agricultural land is transferred for such non-agricultural purposes and due to low agricultural output from the remaining land, farmers are not able to pay-off debts, leading to increase of NPAs
- SEZs tend to compete with the MSMEs in the country, leading to decreased viability of such small factories and increased unemployment.
- Revenue foregone – RF is having massive fiscal implications and further shrinks the tax to GDP ratio which is already hovering at dismal 17%
- Paltry compensations given to the farmers in exchange of the fertile agricultural land and not able to sustain a healthy livelihood for long, leading to more demands for loan waivers and subsidies
Although the SEZs do help in increasing the economic growth of the country in affiliated sectors, the govt does need to minimise the negative externalities of setting up such industries. The SEZs to be set up under Make in India project should be spread evenly over the country and help in carrying out a sustainable development of the region, while keeping in view all the environmental and social costs and helping in furtherance of inclusive growth.
Topic: Effects of liberalization on the economy,
5) The “reforms” in 1991 laid out a new trajectory in which federalism was dichotomised into two parts—political and fiscal. Critically analyse the changing nature of fiscal federalism since 1991 reforms. (200 Words)
Widening regional disparity has been a feature of India’s social and economic trajectory at least since the 1960s. The process of economic reforms since 1991 has certainly accentuated it—both between and within states— in sectoral as well as social dimensions. This intensification of regional disparity is also characterized by wider sectoral disparities, especially between agriculture and non-agriculture, among different regions, and widening social disparity along with wider rural–urban disparities. The relative ranks of different states in terms of their per capita income levels have remained practically unchanged in the last three decades, with very moderate changes in the ranks of middle- or high-income states within their respective groups.
Changing nature of fiscal federalism since 1991-
Positive effects on politics and economy-
- The economic reforms have also contributed to the rise in competition among states to attract private investment.
- Further states have begun to rise their own resources to become fiscally sustainable though most of the stares are still dependent on the aid from central government.
- Since beginning of liberalization a parallel process of regional representation in national government began (since 11th Lok Sabha representation of regional parties increased).
- More discretion to States through 73rd and 74th amendment act provided as state has to pass bill to give effect to amendment and hence state enjoys wide discretion over local bodies.
- 80th and 88th Constitutional amendment came as alternative scheme of devolution. Recent 14th FC’s recommendation to devolve 42% share from central pool to state government has potential to strengthen fiscal federalism.
India’s regional states now enjoy considerable political and economic autonomy but also faces intense pressure on their fragile economy as:
- Economist Lawrence Saez has noted that economic liberalization policies in the 1991 prompted a change in federal relation from inter-government cooperation towards inter-jurisdictional competition among States.
- Replaced politics of conflict negotiations with that of techno-managerial.
- FDI attracted towards industrially developed States like Gujarat, Maharashtra more than under-developed States like Jharkhand, Orissa.
Fiscal federalism in India has certainly undergone irreversible changes after the economic reforms. The duty of central government is to strive for equitable distribution of the dividends of this process.
Topic: Economic growth and development
6) Manufacturing output grew 7%–8% annually since 1991, with a marked improvement in the variety and quality of goods produced. Yet, its share in gross domestic product has practically stagnated, with a sharp rise in import intensity. Examine why. (200 Words)
India’s industrial production has diversified with perceptible improvements in the quality and variety of goods produced with growing domestic competition. Yet, the manufacturing (or industrial) sector’s share has stagnated at about 14%–16% of gross domestic product (GDP) after the reforms. Though India has avoided deindustrialization— defined as a decline in the manufacturing (industrial) sector’s share in GDP, or share in workforce—it stares at a quarter century of stagnation, in contrast to many Asian economies that have moved up the technology ladder with a rising share of manufacturing in domestic output and global trade.
- Lack of investment- Manufacturing industries requires huge investments from the state as well as private investors. Indian manufacturing sector did not get as much capital in the form of investment as required.
- Rise of services sector– Indian services sector, which mainly revolves around IT and banking, grew at a much faster pace. This led to diversion of people’s interest from secondary to tertiary sector.
- Ineffective labor laws- The labor laws became stringent and fair much later than expected. This acted as a discouragement for entrepreneurs to establish manufacturing industries which are generally labor intensive.
- Impacts of other economies- Despite being a stable economy, the rise and fall of consumption of other countries affected the Indian production.
- Poor growth of the primary sector- The primary sector which mainly includes agriculture and mining did not grow as expected due to lack of technological advancements. This sector feeds the manufacturing sector and thus, in spite of growth, the share remained constant.
- High input cost- need of importing raw materials, cascading effect of indirect taxes, labor wages, transportation cost have lower down the profitability.
- Poor infrastructure- lack of electricity, roads, water supply etc have hampered the growth of manufacturing sector in tier II and III cities particularly.
- Government Policies- delay in land acquisition, fluctuating market prices, lack of coherent policies, interference in functioning and management, inherent nepotism, corruption etc are creating challenges for the new players.
The National Manufacturing Policy of 2011 aims at increasing the share of manufacturing sector in GDP to 25% by 2022. Initiatives like ‘Make in India’ would also prove effective in increasing the share of manufacturing industries in the GDP. The state is busy publicizing the same as it would not only create a lot of jobs but would also result in increased exports and long term stability of the economy.
Topic: Effects of liberalization on the economy,
7) “The 1991 liberalisation was shaped largely by the economic problems of the government rather than by the economic priorities of the people or by long-term development objectives.” Discuss. (200 Words)
For the economy of independent India, 1991 was a tumultuous and momentous year that witnessed radical departures from the past. The accentuated political uncertainties that surfaced were juxtaposed with an already formidable macroeconomic crisis. This needed long-term and sustainable solution.
The process of economic reforms was shaped largely by economic problems of the government because:
- Populist policies of spending were followed in 1980s due to competitive politics.
- The government was facing a balance of payment (BoP) crisis with foreign exchange reserves severely depleted and lasting only two weeks.
- Rising fiscal and current account deficit.
- Inflation and rise of prices of essential commodities.
- PSUs were running under heavy losses.
- The economy was starved of investment and businesses.
- The remittances from the gulf region had decreased due to 2nd gulf war.
Though the process of economic reforms was accentuated by the economic problems of the government, the problems were result of inherent faults of the economic system and the reforms were carried out with both the objectives of short term and long term solutions. This included-
- Removal of Industrial licensing and registration.
- Freedom for expansion and production to industries.
- Free determination of interest rates by commercial banks.
- Increase in the investment limits for the small and micro scale industries.
- Freedom to import capital goods.
- Steps for disinvestment of PSUs.
- Selling of shares of PSUs
- Increased space for private businesses through liberalizing efforts.
- Reductions in custom duties.
- Partial convertibility.
- Increase in Equity limits for foreign capital.
Thus the reforms reflected the desire to meet both short term and long term problems of the economy and were instrumental in making one of the leading powers in the world.
Topic: Land reforms
Model Agricultural Land Leasing Act, 2016 provisions-
- ‘Lease’ is defined as a contract between the land owner and cultivator, who uses the land owner’s land for agriculture and allied activities for a mutually agreed specified period
- The lease period and lease amount will be based on a mutual agreement between the land owner and cultivator. Additionally, the lease agreement will not confer any protected tenancy right on a cultivator. The lease agreement may or may not be registered (as mutually agreed), and will also not be entered into any record of rights.
- The tahsildar or a revenue officer of equal rank will be responsible for, (i) enforcement of terms of lease, and (ii) facilitating return of the leased out agricultural land to the owner on expiry of the lease period.
- The cultivator, to whom the land has been leased out, will be entitled to an undisturbed possession and use of this land. He can use the land only for agriculture and allied activities. Further, he cannot sub-lease or mortgage the land. He will be eligible to raise loans from banks and other financial institutions without mortgaging the leased in land
- The lease agreement may be terminated on grounds including: (i) failure of cultivator to pay the lease amount after a grace period of three months, (ii) use of land for purposes other than those specified in the agreement, (iii) sub-leasing of land or damage caused to it by the cultivator.
- The cultivator and the owner can settle disputes between them using third party mediation, or gram panchayat, or gram sabha. If the dispute cannot be settled by third party mediation, either the landowner or the cultivator can file a petition before the Tahsildar, or an equal rank revenue officer.
- State governments will constitute a special Land Tribunal, which will be the final authority to adjudicate disputes under the model Act. It will be headed by a retired high court or district court judge. No civil courts will have jurisdiction over disputes under the model Act.
- It specifies that the lessor and the lessee shall enter into a written lease agreement for which it even provides a model agreement. But, at the same time, it also provides for an oral lease to be legal to protect the landowner. This is contradictory, as if an oral lease can be legal, then why should a written lease agreement be prescribed?
- It recommends the government not to fix a minimum or maximum lease amount in fixed cash or kind or share of produce to be given to the landowner as this is to be mutually agreed upon by the two parties. This again is not well founded as there have been cases of excessive lease rates being charged in many parts of India in the recent years which are not justified by the crops grown and incomes expected.
- The Niti Aayog report claims that with the spread of PRIs and other democratic institutions, the tenancy cannot be exploitative anymore. But, if the lease rates in Punjab or the bhagidari system in Gujarat are any indication, the exploitation of the tenant/lessee still exists in the form of excessive lease rates or low output share of the bhagidar for his labour though he does take much less production risk as he does not share input costs.
- The pledging of tenant’s share of produce for availing farm credit is unlikely to happen as the landowner exercises control over the produce in practice, especially under input and output sharing tenancy and bhagidari arrangement. He may not cooperate with the tenant, as seen in the experience of the Andhra Pradesh Licenced Cultivators Act 2011.
- The standard lease agreement provided by the committee provides for—besides farm input obligations of lease and lessor—only fixed quantity or share of harvested crop as the two types of tenancy. It ignores many other forms and systems of payment such as labour tenancy in many parts of India.
The agrarian conditions in different parts of India are different and hence need to modify as per them. The states should take initiative and make required changes so that interests of both owner and cultivator are maintained.