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SECURE SYNOPSIS: 05 APRIL 2019


SECURE SYNOPSIS: 05 APRIL 2019


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.


Topic: Distribution of key natural resources across the world (including South Asia and the Indian subcontinent); factors responsible for the location of primary, secondary, and tertiary sector industries in various parts of the world (including India).

1) What are the challenges faced by the silk industry in India? Discuss the government initiatives to revive the same.(250 words)

 

Why this question:

The question is in the context of Silk Industry and the issues facing it. The question requires to evaluate the government initiatives to revive the same.

Key demands of the question:

The answer must provide for a brief discussion on location and distribution of Silk Industry, the issues and concerns associated and significant policy initiatives by the Government in this direction.

Directive word

DiscussThis is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction

In a few introductory lines explain the significance of Silk Industry with respect to India – Indian Sericuluture has the distinction of being the only country in the world producing all Five major types of silk.

Body

Discuss the following aspects in the answer:

  • common problems faced by the Indian silk industry are – Price fluctuation, Absence of proper market, Lack of transport facilities, Absence of storage facilities, Poor information on market trend, Lack of finance, High cost of production and low productivity, lack of technology penetration, prevalent rural nature of the industry etc., competition from synthetic fibers.
  • Government initiatives – Introduction of high-yielding mulberry varieties, boost to cocoons productivity, Tasar reeling technology package, Developed pest-management measures against various pests of mulberry and silkworms, increase in non-mulberry silk production, Adopt clusters of villages for better marketing conditions, Impose anti-dumping duty. List down initiatives such as – Integrated Scheme for Development of Silk Industry, role of Central silk board etc.
  • Discuss however the piece meal approach of the government has not been very successful thus suggest way forward – Establishment of close linkage between forward and backward sub-systems for greater efficiency and synergy as sericulture and silk industry is highly scattered and unorganized. Adequate thrust on non-traditional uses of silk such as use for artificial skin and other medical applications could create a positive pressure for high value addition. Protection to some extent of Indian silk market from Chinese cheap raw silk and fabrics by implementation of anti-dumping duty. Identification and promotion of potential clusters for silk production in potential traditional and nontraditional areas. Skill up-gradation through structured and specially designed training programme.  Evolution of appropriate cost-effective technologies through focused research projects for the development of superior and hybrid breeds.

Conclusion

Conclude with significance of sericulture and its potential.

Introduction:

Silk,  a  highly  priced  agricultural  commodity,  accounts  for  about  0.2%  of  the  total  world  production  of textile  fibre.  Since  sericulture  stands  next  to  agriculture  for  rural  employment  in  India,  it  becomes  a matter  of  concern  to  examine  the  sericulture  production  trend  over  the  years  and  reasons  for  slow growth. Sericulture is an important agro industry in Indian economy

Body:

The strengths of Indian silk industry are:

  • The 2nd largest producer of silk in the world after China;
  • The largest consumer of silk in the world;
  • The only country in the world that produces all 5 varieties of silk on a commercial scale;
  • Holds the global monopoly for production of the famed golden ‘Muga’ silk;
  • Has abundant arable land for sericulture expansion;
  • Has developed world class research organization with highly qualified and experienced Scientists and Technicians;
  • Posses enough skilled man power.

Challenges faced by Silk Industry in India:

  • Urbanization in Traditional Sericulture Areas:
    • Along with the rapid economic development in the traditional areas of the country, the industrialization and urbanization process has accelerated significantly.
    • This, clubbed with the rising land and labour costs, are hampering the horizontal expansion of sericulture there.
  • Augmentation of Bivoltine Raw Silk Production:
    • Tropicalisation and popularization of bivoltine sericulture in our country is a big challenge.
    • The bivoltine breeds alone can produce the gradable raw silk with the strength and tenacity required for our power looms.
    • However, we are unable to produce appreciable quantity of import substitute bivoltine raw silk, even to meet our own domestic demand.
    • We are dependent on imports to cater to the needs of our power looms.
  • Depleting Water Table:
    • Sericulture in India is practiced in select areas that depend largely on rain.
    • Hence, water resource for irrigation has been a major concern and depleting water table is a big threat for the industry.
  • Degrading Genetic Base:
    • India has a very narrow genetic base required for developing the high yielding, disease tolerant breeds with better survival under fluctuating tropical conditions.
  • Unorganized nature of Sericulture:
    • The Indian sericulture continues to remain with small, marginal farmers and small reelers, unlike China which has small producers but large converters.
  • Poor Credit Flow:
    • Adequate institutional credit to the needy farmers, reelers, weavers etc., would help to improve the quality and productivity, thereby increasing the net income.
  • Low export earnings:
    • Due to global recession and reduced demand in western countries for silk goods. A weaker rupee is also hurting exports.
    • However, the silk exports are finding non-traditional/new markets in UAE, Nigeria, Thailand etc.
  • No Quality Protection:
    • It leads to inadequate returns on hardwork of handloom workers since powerloom is much cheaper
  • Declining inclination of youth towards weaving:
    • The younger generations are losing interest as one can earn the same money working at a powerloom with less stress
  • Competitive pricing:
    • The blending of cheap imported Chinese silk or artificial/synthetic silk yarns putting the natural silk traders on the verge of distress sales.
  • Decline in area of Cultivation:
    • Mulberry silk in the country has seen a steady decline in its area of mulberry cultivation because of rapid urbanization, industrialization and a shortage of agricultural labour.
  • Piece meal approach of government
    • In terms of banning foreign silk, lack of integrated market and inadequate knowledge of sericulture amongst the traders.

Government initiatives through Central Silk Board (CSB) to revive Silk industry in India:

  • Integrated Scheme for the Development of Silk Industry (CSS)
    • Central Silk Board (CSB) has been implementing a rationalized restructured Central Sector Scheme “Integrated Scheme for Development of Silk Industry” for development of sericulture in the Country.
    • It is an umbrella scheme consisting of following four components for the development of Sericulture and Silk industry.
    • The focus and emphasis are on improving production, quality and productivity of domestic silk thereby reducing the country’s dependence on imported silk.
    • The Scheme has four components –
      • Research & Development (R&D), Training, Transfer of Technology and IT Initiatives
      • Seed Organizations and farmers extension centres
      • Coordination and Market Development for seed, yarn and silk products and
      • Quality Certification System (QCS) by creating amongst others a chain of Silk Testing facilities, Farm based & post-cocoon Technology Up-gradation, and Export Brand Promotion.
    • North East Region Textile Promotion Scheme (NERTPS)
      • Under “North East Region Textile Promotion Scheme” (NERTPS), 24 sericulture projects are being implemented under two broad categories viz., Integrated Sericulture Development Project (ISDP) and Intensive Bivoltine Sericulture Development Project [IBSDP] covering Mulberry, Eri and Muga sectors in all North Eastern States.
      • The projects aim at holistic development of sericulture in all its spheres from plantation development to production of fabrics with value addition at every stage of production chain.
    • Sericulture is included as agriculture allied activity under RKVY. This enables the sericulturists to avail the benefits of the scheme for the entire sericulture activities up to reeling.
    • The CSB (Amendment) Act, Rules and Regulations have been notified by the Govt. of India to bring quality standards in silkworm seed production.
    • Forest Conservation Act has been amended to treat non mulberry sericulture as forest based activity enabling the farmers to undertake Vanya silkworm rearing in the natural host plantation in the forests.
    • Anti dumping duty on Chinese raw silk – The Director General of Antidumping & Allied Duties (DGAD), New Delhi has recommended imposition of antidumping duty on Chinese raw silk of 3A Grade & Below in the form of fixed duty of US$ 1.85 per Kg on the landed cost of imported raw silk
    • CDP-MGMREGA convergence guideline have been finalized and issued jointly by the MOT and MORD. These guidelines will help sericulture farmers to avail assistance from MGNREGA scheme.

Conclusion:

High Labour Force Participation Rate (LFPR) with potential to generate huge employment involving women, augmenting income of farmers, eco-friendly options which help in preserving the biodiversity makes Sericulture a viable option in India.


Topic: Distribution of key natural resources across the world (including South Asia and the Indian subcontinent); factors responsible for the location of primary, secondary, and tertiary sector industries in various parts of the world (including India).

2) With mounting scarcity of fossil fuels, Solar energy is gaining more and more significance in India. Discuss the availability of raw material required for the generation of Solar energy in India and in the world.(250 words)

Reference

Why this question:

Amidst growing Global fossil fuel consumption over the long-term and consequent scarcity it is essential for us to evaluate options of renewable resources and in this context Solar energy.

Demand of the question:

The steady increase in energy consumption coupled with environmental pollution has promoted research activities in alternative and renewable energy fuels. Many countries in the world are continuously developing materials and methods for effectively utilizing the alternative fuel resources available in their region. Thus one must discuss the potential Solar energy has for us to  overcome the energy shortages of present and future. Your discussion should focus on availability of raw material required for the generation of Solar energy in India and in the world.

Directive word:

DiscussThis is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction

Start with brief highlight of the current energy consumption patterns across the world, the crisis World is facing.

Body

Discuss the following points in detail:

  • Explain how the world is gradually marching towards a severe energy crisis, with an ever-increasing demand of energy overstepping its supply and that the energy we use every day is not unlimited, yet we take it for granted.
  • Discuss the causes of energy crisis
  • Then move on to discuss potential of Solar energy as a renewable source of fuels.
  • Discuss the factors associated such as – availability of raw material required for the generation of Solar energy in India and in the world – Tropical nature of the country, technology  – PV solar cells, capacity in terms of skills etc.

Conclusion

Conclude with inevitableness of exploring newer and renewable resources given the conditions of present global energy crisis.

Introduction:

Fossil fuels (coal, oil, gas) have, and continue to, play a dominant role in global energy systems. Fossil energy was a fundamental driver of the Industrial Revolution, and the technological, social, economic and development progress which has followed. Energy has played a strongly positive role in global change.

Body:

India and fossil fuels:

  • As Indian population continues to grow and the limited amount of fossil fuels begins to diminish, it may not be possible to provide the amount of energy demanded by the world by only using fossil fuels to convert energy.
  • India’s current energy use is unsustainable.
  • India has been dependent to a large extent on energy imports to meet its national energy requirements.
  • India imports almost 80% of her oil needs, generates 60% of her electricity from coal-based thermal power plants.
  • However, these being fossil fuels, they are dwindling at quick rates.
  • The geo-political scenario is volatile leading to energy insecurity of India
  • It is estimated that at current rates of production, oil will run out in 53 years, natural gas in 54, and coal in 110.
  • Nearly 300 million people in rural India lack access to grid-connected power, promoting use of archaic sources of energy such as kerosene, diesel, wood-fired chulhas, etc.
  • It not only results in huge government subsidies, but also substantial health and environmental hazards.

Solar energy in India:

  • National Solar Mission envisages establishing India as a global leader in solar energy.
  • The Mission has set the ambitious target of deploying 100GW of grid connected solar power by 2022. (40 GW Rooftop and 60 GW through Large and Medium Scale Grid Connected Solar Power Projects).
  • The country’s solar installed capacity reached 21 GW as of 31 December 2018.
  • India along with Paris, on the sidelines of UNFCCC’s CoP 21 at Paris (2015) decided to set up International Solar Alliance.
  • The ISA’s major objectives include global deployment of over 1,000GW of solar generation capacity and mobilisation of investment of over US$ 1000 billion into solar energy by 2030.

Raw Material for Solar Energy in India and world:

  • A solar cell, or photovoltaic cell, is an electrical device that converts the energy of light directly into electricity by the photovoltaic effect, which is a physical and chemical phenomenon.
  • The basic component of a solar cell is pure silicon, which is not pure in its natural state.
  • Pure silicon is derived from such silicon dioxides as quartzite gravel (the purest silica) or crushed quartz.
  • The resulting pure silicon is then doped (treated with) with phosphorous and boron to produce an excess of electrons and a deficiency of electrons respectively to make a semiconductor capable of conducting electricity.
  • The silicon disks are shiny and require an anti-reflective coating, usually titanium dioxide.
  • copper, silver, silicon, indium, etc. are also vital to produce existing and future solar technologies.
  • As domestic manufacturing of solar cells and panels was limited, the country is dependent on imports from China and other countries, including Germany.

Distribution of raw materials in India and world:

  • The silicon that you’ll now find in a solar cell is highly processed. The material is sourced in silica mines, which are often found in regions with heavy quartz concentrations.
  • Silicon is not produced in the India, we are totally import-dependent for it. Though we have plenty of sand as raw material, we don’t have the technology to process it into silicon wafers for solar cells or panels
  • Quartz reserves in India are found in Rajasthan, Behror, Haryana, Himachal Pradesh, Andhra Pradesh, and Madhya Pradesh. Deposits in Rajasthan are spread over the districts of Alwar, Ajmer, Bharatpur, Tonk, Sawai Madhopur, Pali, Udaipur, Churu, and Chittorgarh.
  • Rare earth minerals in India mainly exist in the form of monazite and monazite distributed in coastal placers and inland placers.
  • China is by far the world’s largest producer of silicon, including thereby silicon content for ferrosilicon and silicon metal.
  • Globally, more than 90% of the rare earth metals are located in China.

Conclusion:

India although has more than 300 days of sunny weather and the technology to manufacture PV cells to harness solar energy, we lack raw materials. Thus, it is imperative to sign bilateral treaties with countries which have the raw materials to push our solar industries and achieve our target of 100 GW of solar energy.


Topic: Government policies and interventions for development in various sectors and issues arising out of their design and implementation.

3) Discuss the highlights of proposed Nyuntam Aay Yojana (NYAY). Do you think this  redistributive mechanism will facilitate macroeconomic drivers of growth in India and promise trickle-down economics? Critically analyse. (250 words)

Indianexpress

Indianexpress

Why this question:

The question is in the light of the recently announced election agenda by the Congress party of – Nyuntam Aay Yojana (NYAY).  

Key demand of the question:

The answer must  discuss in detail the highlights of the scheme and critically analyse its relevance with respect to the trickle down theory of economics.

Directive word:

DiscussThis is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Critically analyzeWhen asked to analyze, you  have to examine methodically the structure or nature of the topic by separating it into component parts and present them as a whole in a summary. When ‘critically’ is suffixed or prefixed to a directive, one needs to look at the good and bad of the topic and give a fair judgement.

Structure of the answer

Introduction:

write a few introductory lines bring out the highlights of the newly announced scheme.

Body:

Answers must discuss the following aspects :

  • Discuss the Nyuntam Aay Yojana’ (NYAY) or minimum income guarantee (MIG) — it proposes a cash transfer of Rs 6,000 a month (or Rs 72,000 a year) to the bottom 20% of the poor. Why it is often being described as a ‘dole’, bad for fiscal health and worse — bad for the beneficiaries themselves because it would apparently make them lazy and dependent.
  • Why is NYAY a redistributive mechanism?
  • Discuss the logic of trickle-down economics.
  • Critically analyse one-size-fits-all fiscal management – NYAY.
  • What needs to be done – India’s policymakers need to take changes in global thinking into consideration while framing their policies to fight poverty and inequality..

Conclusion –

Conclude with way forward.

Introduction:

The idea of a minimum income guarantee (MIG) has caught up with political parties. A MIG requires the government to pay the targeted set of citizens a fixed amount of money on a regular basis. Congress party recently promised MIG programme called Nyuntam Aay Yojana (NYAY), if the party was voted to power. A limited version of the MIG in the form of the PM KISAN Yojana is already being implemented by the NDA government at the Centre. State governments in Odisha and Telangana have their own versions of the MIG.

Body:

Highlights of NYAY:

  • The Nyay scheme is targeted towards 5 crore families who are the poorest 20 per cent in India.
  • Nyay scheme guarantees each family a cash transfer of Rs. 72,000 a year and as far as possible the money will be transferred to a bank account of a woman in the family.
  • There will a design phase (3 months), followed by pilot and testing phases (6-9 months) before the rollout of the plan.
  • The scheme will be implemented in phases and the estimated cost will be less than 1 per cent of the GDP in the first year, and less than 2 per cent of the GDP in the second year and thereafter
  • As the nominal GDP grows and the families move out of poverty, the cost will decline as a proportion of the GDP.
  • If brought to power, Congress announces the appointment of an independent panel of economists, social scientists and statisticians to oversee the design, testing, rollout and implementation of the programme. The programme will move from one stage to the other only after a go-ahead from the panel.
  • The Nyay scheme would be a joint scheme of the central and state governments.
  • Nyay scheme will be funded through new revenues and rationalisation of expenditure. Current merit subsidy schemes that are intended to achieve specific objectives will be continued.

NYAY a redistributive mechanism:

  • Guaranteed minimum income is a powerful idea that has already made some headway in various countries. Some European countries, for instance, guarantee a minimum income to their citizens.
  • NYAY is a targeted cash-transfer scheme that guarantees Rs 6,000 per month to the recipients — nothing more, nothing less. It can also be thought of as a massive non-contributory pension scheme.
  • Fights Poverty and vulnerability: Poverty and vulnerability will be reduced in one fell swoop. It increases equality among citizens as envisaged in our DPSP.
  • Choice: A UBI treats beneficiaries as agents and entrusts citizens with the responsibility of using welfare spending as they see best; this may not be the case with in-kind transfers. Nobel laureate Amartya Sen had also propounded that choice should be given to people, which will lead to development.
  • Better targeting of poor: As all individuals are targeted, exclusion error (poor being left out) is zero though inclusion error (rich gaining access to the scheme) is 60 percent.
    • Example: The India Human Development Survey found that in 2011-12 about half of the officially poor did not have the BPL card, while about one-third of the non-poor had it.
  • Fighting technological unemployment: With 0 on the rise, there is an increase in the automation leading to loss of many white and blue collared jobs. MIG can act as a sort of security net for the millions of people who will be left jobless by the tech revolution.
  • Supporting unpaid care workers: Those with ill or differently abled relatives are often forced to quit their jobs and look after them full-time. MIG would allow care-workers to support themselves, encouraging care work and taking pressure off public services that provide care to the sick and elderly.

Challenges posed by NYAY:

  • The first puzzle is whether the scheme would identify all those families with monthly income below Rs 12,000 and uniformly transfer Rs 6,000 a month to them. If yes, then for families with incomes exceeding Rs 6,000, the scheme would overshoot the target income. This would subject the taxpayer to extra burden.
  • An alternative would be that the scheme would give each identified beneficiary family the difference between Rs 12,000 and its actual income.
  • This gives rise to the second puzzle. Any future increases in income will attract equivalent reductions in transfers. So, families will have no incentive to increase their future incomes. Indeed, once included in NYAY, they would have the incentive to stop working altogether and let cash transfers ‘do the work’ to the full extent of Rs 12,000.
  • The third puzzle is that the scheme also fixes the proportion of beneficiary families at 20% of the total. But fixing this proportion arbitrarily conflicts with the goal of minimum income of Rs 12,000 for all families. The 2011-12 National Sample Survey Office’s (NSSO) expenditure survey gives us the latest estimates ranging from the poorest to the richest families.
  • Calculations show that in 2018-19, a solid 40% of rural and 10% urban families had expenditures below Rs 12,000 a month. Evidently, targeting only 20% families is inconsistent with the goal of ensuring a minimum income of Rs 12,000 for all. The net will have to be widened quite considerably.
  • An income of Rs 12,000 a month translates into Rs 1, 44,000 a year. Adding numerous other existing in-kind transfers such as subsidised food, house, crop insurance, education and health insurance would likely bring this annual figure to Rs 2, 00,000. In contrast, a hard-working family that earns Rs 3, 00,000 must pay a tax of Rs 2,500. This tax is now covered by a tax credit, but this may change in the future
  • The final issue concerns financial feasibility. Based on coverage of 20% families and Rs 6,000 a family, proponents of NYAY have placed the cost at Rs 3.6 trillion – 13% of total GoI expenditures in the 2019-20 budget. But many families currently earn less than Rs 6,000 a month, and so will require a transfer of more than Rs 6,000 to cross the threshold of Rs 12,000. Also, a lot more than 20% families will have to be covered by the scheme, thereby making NYAY’s true cost significantly higher than Rs 3.6 trillion.

 

Way Forward:

 

  • QUBRI (quasi-universal basic rural income):
  • It is targeted only at poorer people in the rural areas.
  • The scheme is no longer universal.
  • It excludes the not-so-poor in rural areas as morally it should.
  • All the schemes, rural and urban, could be cash transfer schemes, which Aadhar and the digitisation of financial services will facilitate.
  • Strengthening of institutions of the state to deliver the services the state must (public safety, justice, and basic education and health), which should be available to all citizens regardless of their ability to pay for them.
  • The institutions of the state must be strengthened also to regulate delivery of services by the private sector and ensure fair competition in the market.
  • A better solution to structural inequality is universal basic capital (UBC). People own the wealth they generate as shareholders of their collective enterprises. Amul, SEWA, Grameen, and others have shown a way.

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

4) The current conditions of Indian Economy requires to strengthen domestic growth impulses by spurring private investment, that have remained inactive. Comment. (250 words)

Livemint

Why this question:

The article is in the backdrop of RBI’s recent second successive repo rate cut, and retainment of neutral policy stance along with lowers projections for both GDP growth and inflation.

Key demand of the question:

In such a context it is necessary for us to evaluate steps required to strengthen the domestic growth and in this question special emphasis needs to be given to discuss role of private investment.

Directive word:

Commenthere we have to express our knowledge and understanding of the issue and form an overall opinion thereupon.

Structure of the answer:

Introduction:

Begin with brief introduction of recent measures taken by RBI to boost growth .

Body:

Discussion should have the following dimensions :

  • The highlights of the RBI policies recently taken.
  • Importance private investment in boosting Indian economy – In the conditions of RBI looking to use monetary tools to stimulate economic growth wherein a benign inflationary environment has helped the central bank edge into an expansionary monetary space it is essential and crucial for private investors to aid the growth.
  • Discuss in detail role of private investment , provide for a comparison with that of public investment.
  • What are the challenges faced by the private investors ?
  • What needs to be done to stimulate them.

Conclusion:

Conclude with significance of such steps.

Introduction:

The Reserve Bank of India (RBI) recently carried out a second successive interest rate cut in a span of two months while maintaining a neutral monetary policy stance, reflecting the central bank’s concerns about sluggish economic growth in India and abroad. The central bank cut its benchmark repo rate by 25 basis points (bps) to 6% in first week of April 2019.

Body:

RBIs measures to spur economy:

  • Coupled with a 25 bps rate cut in February, RBI is clearly looking to use monetary tools to stimulate economic growth.
  • RBI has been increasing systemic liquidity through a combination of tools, including buying government securities from the market through its open market operations (OMO) and conducting three-year dollar-rupee currency swaps.
  • In addition, a benign inflationary environment has helped the central bank edge into an expansionary monetary space.
  • RBI’s concerns about the slowing Indian economy are echoed in its revised macroeconomic projections.
  • The central bank has revised its retail inflation projections downwards from its February estimates: 2.4% for Q4 of 2018-19 (against 2.8% in February) and 2.9-3% for the first six months of 2019-20 (3.2-3.4% earlier).
  • RBI has also eased its liquidity coverage ratio norms that is expected to release more liquidity and help banks boost their lending activity
  • There is now a clear shift in RBI’s actions—from inflation targeting to growth stimulation.

Importance of private investment in boosting Indian economy:

  • Achieving infrastructure investment of 5% of GDP requires considerably more private sector contribution.
  • Private sector participation in infrastructure delivery helps deliver tangible benefits.
  • The private sector has also delivered efficiently—both on project execution as well as operations.
  • Private participation enhances public accountabili
  • Public private partnership (PPP) bring back trust in public utilities that execute them, improve service delivery and bridge resource gaps.
  • Reviving the stalling private sector investments is crucial to accelerate the infrastructure build-up that India needs, aspires for, and deserves.

Challenges faced by the private investors:

  • Investments in the corporate sector also witnessed a fall post-GFC from 16% in 2008 to around 10% in 2016, due to debt burdens, slowdown in private credit and twin balance sheets problems in the banking and corporate sectors.
  • The investment ratio slowed down to around 30% after the global financial crisis (GFC) from 38% in 2007.
  • Public investment can play a significant role as they have access to funds from multilateral institution, tax sources etc.
  • The new investment realisation rate in transport infrastructure sector is falling since 2008 mostly due to issues like land acquisition, environmental clearances and other market conditions.
  • Falling exports also seriously affected investment. Both Special Economic Zones (SEZs) and Exports Oriented Units (EOUs) have failed to deliver in terms of exports, investment and employment generation.

Way forward:

  • Broad-basing private investment in infrastructure requires commitment and holistic efforts from both the Centre and the states.
  • Empower public institutions to drive transformation:
    • Capable creditworthy public institutions are an essential prerequisite to attract private investment.
  • Rewire contracting frameworks:
    • Expediting creation of a PPP think-tank institution as recommended by the Kelkar committee could help.
    • We should look beyond conventional build-operate-transfer models to annuity and investment-lite performance-contracting models.
    • This would require recalibrating risk-sharing, and reworking contracts with clear performance metrics.
  • There is a pressing need for enhanced recapitalisation of public sector banks (PSUs) and also divesting the ownership.
  • The government must revise these specific schemes, designed to augment production for exports, to suit the changing global environment and ensure proper functioning.
  • Create supply-side enablers to deepen the infrastructure financing ecosystem:
    • Stalled projects need to be dealt with steadfastly to attract private developers.
    • Building capacity to implement the Insolvency and Bankruptcy Code will be crucial.
    • Creating a diversified and resilient financing ecosystem to facilitate a shift from overreliance on bank-led financing.
    • Strengthening bond markets and expeditious deployment of capital under the National Investment and Infrastructure Fund can help.
  • CRISIL said that the problem of stressed assets in the banking system to push the investment cycle.
  • India would need to find innovative mechanisms to attract investments into infrastructure to sustain its growth.

Conclusion:

There is an urgent need to activate stalled projects and clean up balance sheets of corporate firms and the banking sector to revive the investment cycle. It is important to revive overall investment — especially in infrastructure —- for balanced growth.


Topic:  Infrastructure: Energy, Ports, Roads, Airports, Railways etc. and related issues.

5) Discuss the significance of National Investment and Infrastructure Fund (NIIF) and the need for Infrastructure funding in India.(250 words)

Financialexpress

Why this question:

Roadis, a private investor and operator of transport infrastructure worldwide and the National Investment and Infrastructure Fund (NIIF) have jointly set up a platform to invest in road projects in India. The platform would invest up to $2 billion of equity targeting toll-operate-transfer models, acquisitions of existing road concessions and investment opportunities in the road sector with an aim to create a large roads platform in the country.

Key demand of the question:

The answer must discuss National Investment and Infrastructure Fund (NIIF) and need for infrastructure funding in India.

Directive:

DiscussThis is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction:

Briefly discuss  the context of recent initiative – platform to invest in road projects in India.

Body:

  • The question is straight forward, one must establish the details of National Investment and Infrastructure Fund (NIIF); composition, mandate and other important details.
  • About NIIF: The government had set up the ₹40,000 crore NIIF in 2015 as an investment vehicle for funding commercially viable greenfield, brownfield and stalled infrastructure projects. The Indian government is investing 49% and the rest of the corpus is to be raised from third-party investors such as sovereign wealth funds, insurance and pension funds, endowments, etc. NIIF’s mandate includes investing in areas such as energy, transportation, housing, water, waste management and other infrastructure-related sectors in India.
  • NIIF currently manages three funds each with its distinctive investment mandate. The funds are registered as Alternative Investment Fund (AIF) with the Securities and Exchange Board of India (SEBI).
  • Discuss the three associated funds – Master Fund, Fund of Funds, Strategic Investment Fund etc.
  • Discuss the importance of infrastructure funding in India.

Conclusion:

Conclude with significance of NIIF and importance of infrastructure funding.

Introduction:

National Investment and Infrastructure Fund (NIIF) is a fund created by the Government of India for enhancing infrastructure financing in the country. NIIF was proposed to be set up as a Trust, to raise debt to invest in the equity of infrastructure finance companies such as Indian Rail Finance Corporation (IRFC) and National Housing Bank (NHB). The idea is that these infrastructure finance companies can then leverage this extra equity, manifold. In that sense, NIIF is a banker of the banker of the banker. NIIF is envisaged as a fund of funds with the ability to make direct investments as required. As a fund of fund it may invest in other SEBI registered funds.

Body:

Objectives of NIIF:

  • The objective of NIIF is to maximise economic impact through infrastructure development in viable projects both greenfield and brownfield, including stalled projects, mainly in the core infra sector.
  • NIIF has been structured as a fund of funds and set up as Category II Alternate Investment Fund (AIF) under the Securities and Exchange Board of India (SEBI) Regulations. Total corpus of the fund is Rs. 40000 Crore.
  • The government will invest Rs.20, 000 crores into it from budget while the remaining Rs. 20,000 crores are expected to come from private investors. Government stake has been fixed at 49%.
  • Fund of funds: A fund focused on anchoring and investing in credible and reputed third party managers with a strong track record across diversified sectors within infrastructure services and allied sectors.
  • This implies that there would be multiple alternative investment funds underneath the main fund. Examples of such funds include stressed-assets fund, renewable energy fund, brownfield projects fund etc
  • Master fund: A fund focused on creating scalable sectoral platforms in core infrastructure and in collaboration with strong and reputed operating and financial partners.
  • Strategic fund: A fund focused on investing in strategic assets and projects with longer term horizon across various stages of development.

Significance of NIIF:

  • Provides equity / quasi-equity support to those Non Banking Financial Companies (NBFCs)/Financial Institutions (FIs) that are engaged mainly in infrastructure financing. These institutions will be able to leverage this equity support and provide debt to the projects selected.
  • Invest in funds engaged mainly in infrastructure sectors and managed by Asset Management Companies (AMCs) for equity / quasi-equity funding of listed / unlisted companies.
  • Provides Equity/ quasi-equity support / debt to projects, to commercially viable projects, both greenfield and brownfield, including stalled projects.
  • Fund raising through suitable instruments including off-shore credit enhanced bonds, and attracting anchor investors to participate as partners in NIIF;
  • Servicing of the investors of NIIF.
  • Considering and approving candidate companies/institutions/ projects (including state entities) for investments and periodic monitoring of investments.
  • Investing in the corpus created by Asset Management Companies (AMCs) for investing in private equity.
  • Preparing a shelf of infrastructure projects and providing advisory services.

Need for infrastructure funding in India:

  • There is a clear need for big money to finance the burgeoning infrastructure sector in the country.
  • Large and continuous capital infusions are needed across both old and new infrastructure projects and across the spectrum, in roads, railways, ports, airports, energy et al.
  • Given the sector’s long-gestation periods, these projects need long-term patient money. NIIF can play a key role in this.
  • Especially so in the current challenging circumstances when the bad loan problem at many banks and the IL&FS mess have made traditional infrastructure financiers tight-fisted.
  • Starting off on a clean slate, NIIF, with government backing, professional fund managers with wide experience in infrastructure financing, and renowned international investors, is in a good position to raise funds and bridge the financing gap.
  • It can also bankroll other financiers such as IRFC and NHB, thus helping capital outlays grow manifold.
  • Rapid infrastructure development can give a major boost to the country’s economic prospects and employment generation. NIIF as a potential major financier can be a game changer.

Conclusion:

NIIF has investments held by marquee foreign and domestic investors such as Abu Dhabi Investment Authority, Temasek and HDFC Group. With the Centre’s significant stake, NIIF is considered India’s quasi sovereign wealth fund. Its portfolio now includes investments in ports and logistics, real estate and renewables. It is also said to have put in bids for four airports — Jaipur, Lucknow, Ahmedabad and Mangaluru — in the recent auctions.


Topic:  Ethics and Human Interface: Essence, determinants and consequences of Ethics in human actions; dimensions of ethics; ethics in private and public relationships. Human Values – lessons from the lives and teachings of great leaders, reformers and administrators; role of family, society and educational institutions in inculcating values.

6) Exemplary leadership is critical to encouraging ethical behaviour in government organizations. Discuss.(250 words)

 

Why this question:

The question is about discussing the importance of leadership as a quality essential in encouraging the ethical behaviour and conduct in governmental organizations.

Key demand of the question:

The answer must discuss the significance of Leadership as an essential quality and its relevance to Public services.

Directive word:

DiscussThis is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.

Structure of the answer:

Introduction:

In a few introductory lines define what you understand by leadership.

Body:

In brief discuss –

  • What is leadership ? – Leadership is an important function of management which helps to maximize efficiency and to achieve organizational goals; Initiates action, Motivation, Providing guidance, creating confidence, Building morale etc.
  • Why is leadership important in life? – Leaders have great discipline and they want and inspire others to follow the same path. Such skills and qualities are really important in our daily life. It’s because our future and success depend on.
  • Why is leadership important in governmental organizations? – effective managerial skills enable employees to take on leadership roles in the workplace and gives them an opportunity to manage exciting projects. The qualities of a good leader are demonstrated through their efficiency in supervising assignments and ability to work with their team to achieve positive results.
  • Justify the above points using suitable examples.

Conclusion:

Re assert the significance of leadership in organizations.  

Introduction:

Leadership can be defined as the ability of the management to make sound decisions and inspire others to perform well. It is the process of directing the behavior of others towards achieving a common goal. In short, leadership is getting things done through others.

Ethical leadership is a form of leadership in which individuals demonstrate conduct for the common good that is acceptable and appropriate in every area of their life. It is directed by respect for ethical beliefs and values and for the dignity and rights of others.

Body:

Governance is faced by ethical dilemmas, from where to direct scarce resources to serving the local community. Every leader will make ethical decisions, whether or not they acknowledge them at the time. But the decisions they do make can determine whether their leadership is based on an ethical framework or not. Exemplary leadership influences the people by

  • Leading by example: A noble quality of a leader is leading by example. As an ethical leader, it’s important to remember that actions often speak louder than words. By practicing and demonstrating the use of ethical, honest and unselfish behaviour to subordinates, ethical leaders may begin to earn the respect of their peers. Example: Gandhiji,
  • Champion the Importance of Ethics: One role of an ethical leader is focusing on the overall importance of ethics, including ethical standards and other ethical issues, and how these factors can influence society. As an ethical leader, it’s important to teach peers about ethics, especially in cases where they are faced with an ethical issue in the workplace. Example: Nelson Mandela.
  • Communication and Accountability: Successful ethical leaders tend to be good communicators. It’s an ethical leader’s job to communicate with each member of the team, but also allow for open conversation. It’s important for leaders to build camaraderie with their team. Quality relationships tend to be built on trust, fairness, integrity, openness, compassion and respect. Example: Martin Luther King
  • Encouragement and Motivation: Maintaining a positive working atmosphere is an important responsibility of a strong ethical leader. Ethical leaders who lead by example may influence others to do the same. Positive communication among co-workers may help influence job productivity and attitude. Example: Anna Hazare
  • Fostering Stronger bonds: Ethical leadership can also involve the management of conduct and collaboration within a team. Typically, morale is higher in the workplace when people are getting along with each other. When co-workers are working as a team, it can help build relationships in the workplace and help the overall performance of the group.
  • Health of the Organization: The importance of maintaining a positive attitude in the workplace has a lot to do with improving the overall health of the organization. An ethical organization can occur when communities of people work together in an environment of mutual respect, where they can grow personally, build friendships and contribute to the overall goal.

Conclusion:

A strong ethical leader has four important characteristics – Values, Vision, Voice and Virtue. The main goal of an exemplary leader is to tread the path of ethical behaviour and inspire his/her peers, co-workers also to cultivate and use ethical behaviour.


Topic:  Aptitude and foundational values for Civil Service , integrity, impartiality and non-partisanship, objectivity, dedication to public service, empathy, tolerance and compassion towards the weaker sections.

7) Delineate role of integrity and impartiality in public administration.(250 words)

Ethics by Lexicon

Why this question:

The question is intended to evaluate the importance of of integrity and impartiality in public administration.

Key demand of the question:

The answer must discuss the importance of of integrity and impartiality in public administration, how they are different from each other.

Structure of the answer:

Introduction:

In a few introductory lines define what you understand by Integrity and impartiality, In what context they apply to public services.

Body:

Discuss –

  • What is integrity in public service? – Integrity means earning and sustaining public trust by: serving the public interest, using powers responsibly, for the purpose and in the manner for which they were intended, acting with honesty and transparency, making reasoned decisions without bias by following fair and objective processes preventing and addressing improper conduct, disclosing facts without hiding or distorting them, not allowing decisions or actions to be influenced by personal or private interests.
  • How is it different from Impartiality ?  – Impartiality means that, regardless of a public servants personal beliefs and preferences, and personal relationships with other servants or with members of the community; he or she must impartially serve the government of the day and treat members of the public and other public servants fairly and impartially. Impartiality implies tolerance and restraint, particularly in dealing with political or religious convictions.
  • Explain their importance in public administration.

Conclusion:

Conclude with importance of such traits and their necessity in public administration.

Introduction:

Aptitude and foundational values for civil services like integrity, impartiality and non partisanship, objectivity are needed to bring the attitudinal and behavioural reforms in them.

Body:

Integrity: It is the practice of synchronisation of thought, words and actions. It can be correlated to honesty but unlike honesty it’s more a professional value. It’s related to institution. It advocates sacrifice of personal gains in favour of organisational objectives. In conflict between personal and organisational objectives organisation must be given importance. Financial integrity is important component. Civil servants are handling public assets they are the custodians of public money. Integrity ensures the economy of expenditure, reduction in unproductive expenditure, minimisation of corruption. Hence integrity is utmost required value.

Example: Not accepting praise of acclaim for someone else’s work. That includes stealing someone’s idea or pretending to have worked on a successful project.

When your senior asks you to do something against your personal code of conduct, refuse. If it means losing a good paying job, so be it. Find a more ethical option to use.

Impartiality: Impartiality (also called even handedness or fair-mindedness) is a principle of justice holding that decisions should be based on objective criteria, rather than on the basis of bias, prejudice, or preferring the benefit to one person over another for improper reasons. A civil servant should never show any kind of prejudices, biases, and preferences into their functioning. Impartiality lies at the heart of public service and is the core of the commitments of a public servant. A public servant must not act on the basis of nationality, race, religion, or political point of view. His / her service must be based on the principle of non-partisan.

Example: making decisions and providing advice on merit and without bias, caprice, favouritism or self-interest; implementing Government policies and programs equitably.

Conclusion:

Present day civil servants needs to perform multiple functions of giving suggestions to political representatives, addressing public grievances, institutionalisation of the socio economic changes, delivering goods and services. Hence a value committed bureaucracy is need of hour.