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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: Population and associated issues. Poverty and developmental issues.

1) Briefly explain the pattern of internal migration in India? Discuss the challenges encountered by migrant workers to avail various government benefits. Suggest your own measures to improve the delivery of services to migrant workers.(250 words)

The hindu



Migration is defined as the movement of people from one place to another across the political boundaries- national (internal) or international. It is an integral part and an important factor in redistributing the population over time and space. Migrants who move within the boundaries of their own country are known as internal migrants.


Pattern of internal migration in India: There are four streams of internal migration viz.

  • Rural to urban (R-U) – 18%
  • Rural to Rural (R-R) – 50%
  • Urban to Rural (U-R) – 5%
  • Urban to Urban (U-U) – 17%
  • The Economic Survey of India 2017 estimates that the magnitude of inter-state migration in India was close to 9 million annually between 2011 and 2016
  • The 2001 census estimated the total number of internal migrants at 314 million based on place of last residence, representing nearly 30% of the total population. According to 2011 Census, the number of internal migrants rose to 453.6 million.
  • The decadal growth in migration has gone up from 35.5% during 1991-2001to 44.2% during 2001-11.
  • Uttar Pradesh and Bihar are the biggest source states (states from which people migrate), followed closely by Madhya Pradesh, Punjab, Rajasthan, Uttarakhand, Jammu and Kashmir and West Bengal
  • The major destination states (states to where people migrate) are Delhi, Maharashtra, Tamil Nadu, Gujarat, Andhra Pradesh and Kerala.

Challenges encountered by migrant workers:

  • Employment in informal economy: Migrants dominate the urban informal economy which is marked by high poverty and vulnerabilities. In an unorganized and chaotic labour market, migrant workers regularly face conflicts and disputes at worksites. The common issues they face are non-payment of wages, physical abuse, accidents and even death at work.
  • Issue of Identification documents: Proving their identity is one of the core issues faced by poor migrant labourers at destination areas. The basic problem of establishing identity results in a loss of access to entitlements and social services, such as subsidized food, fuel, health services, or education that are meant for the economically vulnerable sections of the population.
  • Housing: Lack of affordable housing in Indian cities force migrants to live in slums. Many seasonal migrants are not even able to afford rents in slums force them to live at their workplaces (such as construction sites and hotel dining rooms), shop pavements, or in open areas in the city
  • Financial Access: Migrant workers have limited access to formal financial services and remain unbanked
  • Access to healthcare: Migrant workers have poor access to health services, which results in very poor occupational health.
  • Education of children: UNESCO’s 2019 Global Education Monitoring Report (GEM Report) shows that children left behind by migrating parents and seasonal migrants face fewer educational opportunities overall. According to the report, 80% of migrant children across seven Indian cities did not have access to education near worksites. Among youth aged 15 to 19 who have grown up in a rural household with a seasonal migrant, 28% were identified as illiterate or had an incomplete primary education.
  • Social exclusion: There is a growing hostility of urban governments, as well as middle-class citizens, towards the urban poor, especially migrants to the cities.
  • Political exclusion: Migrant workers are deprived of many opportunities to exercise their political rights. A 2011 study pointed out that 22% of seasonal migrant workers in India did not possess voter IDs or have their names in the voter list.
  • At policy level the major challenge is to formulate migration policies which must be linked with employment and social services, to enhance the well-being of the migrant living in urban area.

Measures to improve the delivery of services to migrant worker:

  • There is an urgent need to develop a coherent legal and policy framework on migration. Policy can have two dimensions: reducing distress-induced migration and address conditions of work, terms of employment and access to basic necessities.
  • Development strategies in backward rural areas should be strengthened to provide sustainable livelihood opportunities, food security programmes and creating opportunities for access to credit.
  • Further, focus should be given on improving rural infrastructure- health, education and connectivity.
  • A concerted national strategy that ensures access to entitlements and basic work conditions is necessary to address the plight of migrant workers.
  • Internal migrants should be able to access legal aid and counselling to protect them from work and wage-related malpractice, and to ensure they have access to grievance handling and dispute resolution mechanisms.
  • There is an urgent need to ensure that internal migrants are issued with a universally recognised and portable proof of identity that can form the basis on which to claim other socio-economic entitlements anywhere in the country.
  • Overall processes of governance need to be democratized in order to include internal migrants in decision making processes and planning
  • Education provisions should be sufficiently flexible to ensure that mobile populations are not left out.
  • Initiatives should be taken to foster social inclusion of migrants and reduce discrimination.

Way forward:   

  • A national policy on migration should facilitate the integration of migrants into the local urban fabric, and building city plans with a regular migration forecast assumed.
  • Lowering the cost of migration, along with eliminating discrimination against migrants, while protecting their rights will help raise development across the board.
  • It should distinguish between the interventions aimed at ‘migrants for survival’ and ‘migrants for employment’.
  • It should provide more space to local bodies and NGOs which bring about structural changes in local regions.
  • It should focus on measures enhancing skill development would enable easier entry into the labour market.
  • It should also distinguish between individual and household migrants, because household migration necessitates access to infrastructure such as housing, sanitation and health care more than individual migration does.
  • The policy should improve financial infrastructure to enable the smooth flow of remittances and their effective use require more attention from India’s growing financial sector.

Topic: Structure, organisation and functioning of the Executive, Judiciary and Ministries of the government.

2) It is often said that ‘Justice delayed is justice denied’, why do Indian courts take so long time to deliver justice?  Do you agree that Indian justice system is too slow, too complex and too costly? Critically Analyze.(250 words)

The hindubuisnessline



The justice system in any democracy is set up, under the Constitution to serve the public without “fear or favour, affection or ill-will” as far as judges are concerned. The Indian Judiciary plays an increasingly important role in the life and the governance of this country. Pendency of cases across courts in India has increased in the last decade.


Present Status of pendency in Indian Judiciary:

  • As per the National Judicial Data Grid (NJDG), in 2018, 93 crore cases are pending in the subordinate courts, 49 lakhs in High Courts and 57,987 cases in Supreme Court.
  • In the Supreme Court, more than 30% of pending cases are more than five years old while in the Allahabad High Court, 15% of the appeals have been pending since 1980s.
  • A Law Commission report in 2009 had quoted that it would require 464 years to clear the arrears with the present strength of judges
  • Eighteen months after the crime, a special court in Pathankot delivered its verdict on the Kathua case.
  • Most cases in India, because of delays at both the police and judiciary level take far longer.
  • Across India’s subordinate courts — the first port-of-call for most cases — more than a third of the 31 million cases have been pending for more than three years.
  • In the High Courts, the pendency is even higher: half of all the 8 million cases in the High Courts have been pending for more than three years.
  • The lower courts in West Bengal, Odisha and Bihar, in particular, struggle to dispose their cases. In all three states, nearly 50% of cases in the lower courts have been pending for more than three years. 
  • On many occasions, the pendency at lower courts translates to pendency at the state’s higher courts. In both Calcutta High Court and Odisha High Court, nearly 70% of cases have been waiting for a resolution for more than three years.
  • However, some state courts, though, dispose of cases more quickly.
  • In Punjab and Haryana for instance, less than 6% of all cases have been pending for more than three years.
  • Overall, eastern states have much higher pendency rates compared to the western states of the country.
  • The eastern half of the country is also much poorer than the western half

Reasons for delay in solving the Cases:

  • Shortage of judges: around 5,580 or 25% of posts are lying empty in the subordinate courts. It leads to poor Judges to Population Ratio, as India has only 20 judges per million population. Earlier, Law Commission had recommended 50 judges per million.
  • Frequent adjournments: The laid down procedure of allowing a maximum of three adjournments per case is not followed in over 50 per cent of the matters being heard by courts, leading to rising pendency of cases.
  • Low budgetary allocation leading to poor infrastructure: India spends only about 0.09% of its GDP to maintain the judicial infrastructure. Infrastructure status of lower courts of the country is miserably grim due to which they fail to deliver quality judgements. A 2016 report published by the Supreme Court showed that existing infrastructure could accommodate only 15,540 judicial officers against the all-India sanctioned strength of 20,558.
  • Burden of government cases: Statistics provided by LIMBS shows that the Centre and the States were responsible for over 46% of the pending cases in Indian courts.
  • Special leave petition: cases in the Supreme Court, currently comprises to 40% of the court’s pendency. Which eventually leads to reduced time for the cases related to constitutional issues.
  • Judges Vacation: Supreme Court’s works on average for 188 days a year, while apex court rules specify minimum of 225 days of work.
  • Lack of court management systems: Courts have created dedicated posts for court managers to help improve court operations, optimise case movement and judicial time. However only few courts have filled up such posts so far.
  • Inefficient investigation: Police are quite often handicapped in undertaking effective investigation for want of modern and scientific tools to collect evidences.
  • Increasing Literacy: With people becoming more aware of their rights and the obligations of the State towards them, they approach the courts more frequently in case of any violation

Impacts of Judicial Delay:

  • Denial of ‘timely justice’ amounts to denial of ‘justice’ itself: Timely disposal of cases is essential to maintain rule of law and provide access to justice. Speedy trial is a part of right to life and liberty guaranteed under Article 21 of the Constitution.
  • Erodes social infrastructure: a weak judiciary has a negative effect on social development, which leads to: lower per capita income; higher poverty rates; poorer public infrastructure; and, higher crime rates.
  • Affects human rights: Overcrowding of the prisons, already infrastructure deficient, in some cases beyond 150% of the capacity, results in “violation of human rights”.
  • Affects the economy of the country as it was estimated that judicial delays cost India around 1.5% of its Gross Domestic Product annually.
  • As per the Economic Survey 2017-18 pendency hampers dispute resolution, contract enforcement, discourage investments, stall projects, hamper tax collection and escalate legal costs which leads to Increasing cost of doing business.

Measures needed:

  • Improving infrastructure for quality justice: The Parliamentary Standing Committee which presented its report on Infrastructure Development and Strengthening of Subordinate Courts, suggested:
  • States should provide suitable land for construction of court buildings etc. It should undertake vertical construction in light of shortage of land.
  • Timeline set out for computerisation of all the courts, as a necessary step towards setting up of e- courts.
  • Addressing the Issue of Vacancies: Ensure the appointments of the judges be done in an efficient way by arriving at an optimal judge strength to handle the cases pending in the system. The 120th Law Commission of India report for the first time, suggested a judge strength fixation formula.
  • Supreme Court and High Courts should appoint efficient and experienced judges as Ad-hoc judges in accordance with the Constitution.
  • All India Judicial Service, which would benefit the subordinate judiciary by increasing quality of judges and help reduce the pendency.
  • Having a definite time frame to dispose the cases by setting annual targets and action plans for the subordinate judiciary and the High Courts. The judicial officers could be issued a strict code of conduct, to ensure that the duties are adequately performed by the officials.
  • Strict regulation of adjournments and imposition of exemplary costs for seeking it on flimsy grounds especially at the trial stage and not permitting dilution of time frames specified in Civil Procedure Code.
  • Better Court Management System & Reliable Data Collection: For this categorization of cases on the basis of urgency and priority along with bunching of cases should be done.
  • Use of Information technology (IT) solutions: The use of technology for tracking and monitoring cases and in providing relevant information to make justice litigant friendly. A greater impetus should be given to
  • Process reengineering: Involves redesigning of core business processes to achieve dramatic improvements in productivity and quality by incorporating the use of technology in court rules. It will include:
  • Electronic filing of cases: e-Courts are a welcome step in this direction, as they give case status and case history of all the pending cases across High courts and Subordinate courts bringing ease of access to information.
  • Revamping of National Judicial Data Grid by introducing a new type of search known as elastic search, which is closer to the artificial intelligence.
  • Alternate dispute resolution (ADR): As stated in the Conference on National Initiative to Reduce Pendency and Delay in Judicial System- Legal Services Authorities should undertake pre-litigation mediation so that the inflow of cases into courts can be regulated.
    • The Lok Adalat should be organized regularly for settling civil and family matters.
    • Gram Nyayalayas, as an effective way to manage small claim disputes from rural areas which will help in decreasing the workload of the judicial institution.
    • Village Legal Care & Support Centre can also be established by the High Courts to work at grass root level to make the State litigation friendly.


The fundamental requirement of a good judicial administration is accessibility, affordability and speedy justice, which will not be realized until and unless the justice delivery system is made within the reach of the individual in a time bound manner and within a reasonable cost. Therefore, continuous formative assessment is the key to strengthen and reinforce the justice delivery system in India

Topic: Effect of policies and politics of developed and developing countries on India’s Interests, Indian Diaspora

3) Discuss the implication of U.S.’s maximum pressure tactics with Iran on India? What measures must India take to secure its energy supply?(250 words)

The hindu



The Joint Comprehensive Plan of Action, commonly known as the Iran deal, was signed on July 14, 2015 between Iran, the U.S., China, France, Russia, the U.K., Germany and the European Union. It was considered a landmark deal which would eventually bring peace and harmony to the turmoil-stricken Middle East. However, President Donald Trump recently decided to unilaterally pull the U.S. out of the Iran nuclear deal and to re-imposing nuclear sanctions against that country


Recent Incidents:

  • In a recent incident, four commercial vessels were sabotaged near Fujairah (an emirate of the UAE), one of the world’s largest bunkering hubs lying just outside the Strait of Hormuz.
  • The incident has come at a time of heightened tensions in the Gulf.
  • The US has deployed an aircraft carrier, bomber planes and defence missiles to the region amid rising tensions with Iran, which has threatened to block oil shipments through the Strait of Hormuz if the US succeeds in halting its energy exports

Implications for India:

  • Oil and Gas:
    • The impact on world oil prices will be the immediately visible impact of the U.S. decision.
    • Iran is presently India’s third biggest supplier (after Iraq and Saudi Arabia), and any increase in prices will hit both inflation levels as well as the Indian rupee.
    • The negotiations on the Farzad-B gas field remain stuck, with both sides blaming the other for shifting the goalposts. It was remained on paper because of Iranian unhappiness over India’s stand in the IAEA.
  • Chahbahar port:
    • India’s moves over the last few years to develop berths at the Shahid Beheshti port in Chahbahar was a key part of its plans to circumvent Pakistan’s blocks on trade with Afghanistan.
    • India has already committed about $85 million to Chabahar development with plans for a total of $500 million on the port, while a railway line to Afghanistan could cost as much as $1.6 billion.
  • INSTC:
    • Beyond Chahbahar, India has been a founder of the International North South Transport Corridor (INSTC) since it was ratified in 2002.
    • It starts from Iran and aims to cut right across Central Asia to Russia over a 7,200-km multi-mode network, cutting down transportation and time taken by trade by about 30%.
    • New U.S. sanctions will affect these plans immediately, especially if any of the countries along the route or banking and insurance companies dealing with the INSTC plan also decide to adhere to U.S. restrictions on trade with Iran.
  • Shanghai Cooperation Organisation:
    • India joined the SCO along with Pakistan last year, and both were formally admitted in June 2018, when Prime Minister travelled to the Chinese city of Qingdao for the SCO summit.
    • Chinese officials say they will consider inducting Iran into the 8-member Eurasian security organisation.
    • If the proposal is accepted by the SCO, which is led by China and Russia, India will become a member of a bloc that will be seen as anti-American, and will run counter to some of the government’s other initiatives like the Indo-Pacific quadrilateral with the U.S., Australia and Japan.
    • The move may also rile other adversaries of Iran, like Saudi Arabia, UAE and Israel, with whom the government has strengthened ties in an effort to balance its West Asia policy.
  • Rules-based order:
    • India has long been a proponent of a “rules-based order” that depends on multilateral consensus and an adherence to commitments made by countries on the international stage.
    • By walking out of the JCPOA, the U.S. government has overturned the precept that such international agreements are made by “States” not just with prevailing governments or regimes.

Measures to enhance energy security for India:

  • Policy measures:
    • Around three-quarters of our power comes from coal powered plants. It is important that India increases its domestic coal to reduce its dependence on imports. There is need to fast track the regulatory clearances, improve labour productivity, increase coal production and enhance efficiency of distribution.
    • Hydrocarbon Exploration and Licensing Policy (HELP) intends to minimize government’s discretion in decision making, reduce disputes, reduce administrative delays and introduce concept of revenue sharing, freedom of marketing to stimulate growth in the oil and gas sector in India.
    • The tax structure should be rationalized in import and sale of energy on thermal value basis with a view to enhance the competitiveness of the economy.
    • The INDIA ENERGY SECURITY SCENARIOS, 2047(IESS) has been developed as an energy scenario building tool. The guiding ambition of this is to develop energy pathways leading up to the year 2047, comprising of likely energy demand and supply scenarios.
    • NITI Aayog launched the India Energy Security Scenarios 2047 calculator (IESS 2047), as an open source web based tool.
  • Energy diplomacy:
    • India is setting up a web of energy relationships in the extended neighbourhood covering Myanmar, Vietnam in the east, with Central Asian countries like Kazakhstan and Gulf countries in the west.
    • Indo-US Nuclear deal opened new vistas for India in field of Nuclear energy facilitating cutting edge technology and nuclear fuel. India has started to engage with China, Kazakhstan and Australia for nuclear fuel.
    • India’s SCO membership could now play a bigger role in ensuring greater energy cooperation between energy producers and consumers by linking Central Asia and South Asia.
  • Promotion of Renewable Energy:
    • A renewable energy capacity of 100 GW should be achieved by 2019-20 so as to contribute to achievement of 175 GW target by 2022.
    • Solar Energy Corporation of India Limited (SECI) should develop storage solutions within next three years to help bring down prices through demand aggregation of both household and grid scale batteries.
    • A large programme should be launched to tap at least 50% of the bio-gas potential in the country by supporting technology and credit support through NABARD by 2020.
    • The potential non-conventional energy sources must be explored and researched to make them technologically economical and accessible, like geothermal energy, tidal energy etc.
  • Enhancing efficiency:
    • The National Mission for Enhanced Energy Efficiency (NMEEE) should conduct a thorough cost-benefit analysis of the available energy-efficient technologies and products across all sectors, especially agriculture, housing and transportation.
    • At the institutional level, the national and state designated agencies working in the area of energy efficiency should be strengthened.
    • To enhance vehicle fuel efficiency gains, the auto fuel quality should be upgraded to BS VI norms for nation-wide launch in 2020.
  • Infrastructure:
    • Augment refining and distribution of oil and gas. India should sustain its export capacity of refined products by setting up new refineries.
    • For the hydro projects, the government will need to make efforts to expedite progress on capacity under construction through satisfactory Rehabilitation & Resettlement implementation.
    • India has also built its strategic petroleum reserves in order to meet any supply shocks due to any external exigencies like wars, natural disasters etc.
    • Indian Strategic Petroleum Reserves Ltd, a special purpose vehicle under the Oil and Gas Ministry, has constructed three strategic petroleum reserves in huge underground rock caverns at Visakhapatnam on the East Coast, and at Mangaluru and Padur on the West Coast.
    • These facilities, with total capacity of 5.33 million tonnes, can meet about 10 days of India’s crude oil requirements. India now plans to build another 6.5 million tonnes of storage at Padur and Chandikhole in Odisha which will augment its supply to 22 days


India and Iran are looking to swiftly conclude a preferential trade agreement and a bilateral investment treaty. India needs to ensure long term planning to ensure universal energy access and meeting its commitment under Paris Agreement to ensure sustainable and inclusive growth.

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

4) What is the meaning of the term ‘Jobless growth”? Has India been experiencing such a growth process? How far Skill India programme would address the jobless growth phenomenon in India?(250 words)


The hindu



Jobless growth is a multi-cause, systemic problem. In a jobless growth economy, unemployment remains stubbornly high even as the economy grows. This tends to happen when a relatively large number of people have lost their jobs, and the ensuing recovery is insufficient to absorb the unemployed, under-employed, and those first entering the workforce. Jobless growth of the Indian economy is a “5C” problem: a Complicated Condition Created by Combinations of Causes.


Jobs scenario in India

  • CMIE and labour Bureau data indicates that India continues to face the jobless growth problem
  • Multiple data sources clearly show that job opportunities in India are, at present, limited, with the average annual addition to regular jobs during 2012-16 falling to 1.5 million from 2.5 million in 2004-12.
  • Besides, job creation in India’s organized manufacturing sector experienced a sharp fall in 2012, later recovering only to a level considerably below any prior year during 2006-12.
  • Furthermore, the share of regular workers with any form of social security has declined from 45% in 2011-12 to 38% in 2016.
  • the labour force participation rate has declined systematically. It was 43% in 2004-05, 40% in 2009-10, 39.5% in 2011-12 and 36.9% in 2017-18.
  • Rapid advances in digital technologies and automation are displacing people from work in all sectors of the economy—in manufacturing, in services, and even in knowledge industries.

Skill India can tackle Jobless growth:

In the words of the Mahatma,“The brain must be educated through the hand. The teacher must learn the craft and correlate his knowledge to the craft. The craft cannot be separated from education.” Under Skill India Mission, the Ministry of Skill Development and Entrepreneurship is implementing a flagship scheme PMKVY with an objective to provide skilling to one crore people across the country for four years (2016-2020).

The impacts of the SKILL INDIA mission in the last 4 years are:

  • NSQF recognises prior learning, through which an estimated 20 million school dropouts can get a second chance.
  • There is a substantial increase in the number of people who were skilled in FY17 and FY18. Notably, the rise is phenomenal, it has risen more than four times, from over 3.5 lakh people in FY17 to nearly 16 lakh people in FY18.
  • About 30% of the skilled persons have found jobs under the mission in FY2018.
  • With nearly 55 percent successful placements, the Short-Term Training Program (STT) under PMKVY (2016-20) has successfully trained over 13 lakh candidates.
  • Approximately 76 percent of the candidates have been placed in wage employment and 24 percent placed in self-employment/ entrepreneurship.
  • Recognition of Prior Learning (RPL) is designed for those who already have a job or are self- employed and require up-skilling and certification for better prospects. Till date, more than 4.5 lakh candidates have been certified under this component of PMKVY (2016-20).

However, challenges remain:

  • The targets allocated are very high and without regard to any sectoral requirement. Everybody was chasing numbers without providing employment to the youth or meeting sectoral industry needs.
  • The focus of PMKVY has been largely on the short-term skill courses, resulting in low placements. There has been an over emphasis on this scheme and hence it is seen as the answer to all skill-related issues.
  • The Comptroller and Auditor General (CAG) has pointed out flaws in the design and operations of the NSDC and National Skill Development Fund which has resulted in falling short of skill development goals. Majority of them also could not achieve the placement targets for the trained persons.
  • The Sharada Prasad Committee, held the NSDC responsible for poor implementation of the Standard Training Assessment and Reward (STAR) programme. It highlighted that only 8.5 per cent of the persons trained were able to get employment. That is what has been claimed by NSDC.
  • The Report also cites “serious conflict of interests” in the functioning of the National Skill Development Corporation. NSDC has not been able to discharge its responsibilities for setting up sector skill councils (SSCs) owing to lots of instances of serious conflict of interest and unethical practices.
  • The skilling courses are not in line with the Industrial Revolution 4.0 which is round the corner.
  • There have been apprehensions on how many of the 11.7 million trained in the past two years are really in jobs.

Other supporting measures needed along with SKILL INDIA:

  • Improving the labour market information system where emerging demand for skills are spotted quickly and the necessary training and certifications for the same are created.
  • Quick improvements in public-private partnership in capturing demand for skills and following through with quick investments in skill-building to match demand with supply.
  • Jobs and skills planning should be decentralized and it has to be done at state and district levels, where there is granular information on education, skills and job options.
  • Implementing a new model of manufacturing which is high-skilled, and where high-end cottage manufacturing can create employment at the small scale level.
  • If urbanization is good and well planned, then job growth will be positive. Government should concentrate on the development of towns and narrow areas and service it with good infrastructure to generate employment alongside development.
  • If government starts spending on public goods (schools, hospitals, dams, roads etc.) instead of spending on freebies (deep subsidies on food, farm loan waivers etc.) the capacity of government to create employment increases.


India needs a new strategy to counter the phenomena of jobless growth. This requires manufacturing sector to play a dominant role. The focus of economic policy must be the creation of jobs and creating an enabling policy for youth to take up entrepreneurship and create more jobs in the market. India does not need five companies worth 5000 crores turnover but needs 5000 companies of 5 crore turnover.

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

5) Indian economy, polity and demography has undergone many changes from last 70 years. In this context, is it the right time to revisit the India’s Fiscal Federalism? Critically comment.(250 words)

The hindu


Fiscal federalism is the financial relations between units of governments in a federal government system. It is part of broader public finance discipline. The term was introduced by the German-born American economist Richard Musgrave in 1959. Fiscal federalism deals with the division of governmental functions and financial relations among levels of government.    

India has a federal form of government, and hence a federal fiscal system. For successful operation of federal form of government, financial independence and adequacy forms the backbone. The Economic Survey 2017-18 highlighted the need for fiscal federalism.


The needs to revisit the Indian fiscal federalism are:

  • Trends in Tax Revenue:
    • A look at the composition of central and states’ own taxes and expenditure reveal that the share of the own tax revenue and expenditure of the states is 38% and 58% respectively.
    • This reflects the more than proportionate expenditure obligations of the states and also the lesser revenue raising powers vis-à-vis the centre.
    • The centre has buoyant sources of revenue like personal income tax, corporation tax, excise duty, customs duty and service tax. However, the tax–gross domestic product (GDP) ratio of the centre has stagnated by 11% on an average, during the period 1970–71 to 2016–17.
  • Trends in Transfer of Central Resources:
    • The transfer of resources to states comprises taxes collected by the Union, statutory grants under Article 275 based on the recommendations of the finance commissions, grants given as central share in centrally sponsored schemes (CSS), other discretionary grants, and until 2015–16, formula-based grants for state plans under the Gadgil formula.
    • The transfer of central resources can be broadly classified into tied and flexible grants. The former is a conditional grant which comes with a scheme and has conditionalities. The state has no flexibility in deciding how to spend it. The CSS grants fall under this category.
  • Trends in Tax Devolution:
    • Under Article 270 of the Constitution, the net proceeds of all taxes levied by the union, except surcharges and cesses are shareable with the states after the 80th Constitutional Amendment.
    • Net proceeds are defined in Article 279 of the Constitution as gross tax revenue of the centre less surcharges and cesses, and cost of collection. However, the amount of net proceeds is not published in the budget documents of the union. But, the proportion of surcharges and cesses to gross tax revenue of the centre is rising, and this is neutralising the higher shares recommended by the successive finance commissions.
    • Surcharges and cesses are levied for the purpose of the union and are not shareable with the states, according to the provisions of Article 271 of the Constitution.
    • The lack of transparency in computation of net proceeds has also caused losses to the states.
  • FRBM Acts and Asymmetric Impacts:
    • The FRBM acts were passed at the level of the centre and the states in the beginning of the 2000s.
    • It laid emphasis only on achieving targets. In the bargain, if revenues could not be raised, expenditure (even essential) would be cut.
    • The states have been forced to limit their deficits due to sanctions by the finance commissions, whereas the centre is not bound by any such conditionalities.
    • The FRBM review committee recommendations have been unilaterally accepted by the centre without consulting the states. This is against the basic tenets of cooperative federalism.
  • Inefficient Cash Management by States:
    • The states do not spend essentially due to the fear of the consequences of non-adherence to deficit targets, which are not only a legislative constraint but also a conditionality imposed by the finance commissions.
    • The perversity of this is such that states are not only forced to adhere to deficit targets, but also to provide cheap financing to the centre, which has not adhered to deficit targets noted in the FRBM acts.
  • Post-GST Scenario
    • The voting rights in the GST Council are in the provisions of Article 279A of the Constitution. The states have two-thirds and the centre one-third voting rights. But to pass a resolution, three-fourths majority is required. This in effect confers a veto power for the centre, even when states jointly propose a change. The states should be able to adopt a change in their tax structure without the centre’s consent. The voting rights envisaged under Article 279A has made this impossible.
    • The committee on revenue neutral rates (RNR) of the central government had suggested the apportionment between the states and the centre at 60:40 ratio, as almost 44% of states’ own tax revenue was subsumed under the GST as against 28% for the centre. It still retains the power to levy additional excise duty on tobacco products, even though it has been brought under the GST. States do not have such a right.
    • The centre also took a long time in implementing the anti-profiteering clause of the GST.
  • ToR of the Fifteenth Finance Commission:
    • There is an apprehension that it will reduce the states’ capacity to intervene in social and economic sectors.
    • ToR suggests whether there should be revenue deficit grants at all. This is ToR is a bolt from the blue with regard to the state finances that are already stressed by the impending pay commission award implementations, the obligation to bear the future interest burden from floating UDAY bonds and stagnation in the GST revenues.
    • The proposed enlargement of restrictive conditions is a move towards fiscal centralisation and acts counter to cooperative federalism.
    • The ToR 7 also mandates the Fifteenth Finance Commission to assess and monitor performance of several aspects, including GST implementation, and other governance and achievement indicators. The finance commission’s becoming a monitoring agency of states’ performance does not befit its constitutional role.
  • Empowering Local Governments:
    • The LGs in India are still a shadow of “institutions of self-government” envisaged in the Constitution.
    • A major impediment for substantial progress in decentralisation to LGs is the lack of any initiative to restructure centre–state relations in India.
    • The vast differences in the decentralisation experience across the states, which is the consequence of the varying degrees of political will.

Way forward:

  • Perhaps the time has come for the Constitution to be amended and the proportion of shareable taxes that should go to the States fixed at the desired level.
  • The shareable tax pool must also include cesses and surcharges as these have sharply increased in recent years. Fixing the ratio at 42% of shareable taxes, including cesses and surcharges, seems appropriate.
  • Another possible route is to follow the practice in the U.S. and Canada: of allowing the States to levy tax on personal income, with some limitations.
  • The freedom given to the States must be limited. It is important to note that the levy by the Centre and States together should be reasonable. Also once this power is given to the States, the transfers from the Centre need adjustment.
  • Horizontal Distribution: The ability of bringing about equalisation across States in India has limitations. Even the relatively richer States have their own problems and they feel ‘cheated’ because of the overuse of the equity criterion. An appropriate balancing of criteria is needed particularly in the context of the rise in unconditional transfers.


There is an urgent need to tackle the above challenges in fiscal federalism by using the co-operative federalism to ensure socio-economic development of India.

Topic: Inclusive growth and issues arising from it.

6) By considering India’s socio-economic conditions into account, how do you define Inclusive Growth? Discuss how core components of Inclusive growth would help to transform India into New India?(250 words)



The concept of inclusive growth focuses on equitable growth for all sections of society. This involves ensuring that fruits of growth and development reach the poor and marginalized sections as well. Inclusiveness is a multi-dimensional concept. Inequalities that include, social exclusion, discrimination, restrictions on migration, constraints on human development, lack of access to finance and insurance,  corruption – are sources of inequality and limit the prospect for economic advancement among certain segments of the population, thereby  perpetuating poverty


The Twelfth Five Year Plan of the erstwhile Planning Commission highlighted the desirability towards inclusive growth. The Plan highlights the objectives of inclusive growth as the following: Inclusive growth should result in lower incidence of poverty, broad-based and significant improvement in health outcomes, universal access for children to school, increased access to higher education and improved standards of education, including skill development. It should also be reflected in better opportunities for both wage employment and livelihood, and an improvement in the provision of basic amenities like water, electricity, roads, sanitation, and housing. Particular attention needs to be paid to the needs of the SC/ST and OBC population (Planning Commission 2011).

  • Economic policies that encompass growth with equity and social policies that improve the capabilities of the poor and redistributive income policies are vital to reduce poverty and income inequality.
  • There is need to spread health and education far more widely amidst the population.
  • Economic growth while reducing poverty does not ensure equitable income distribution. The initial conditions of land ownership, education and health and social stratification have an important bearing on the impact of growth on the equitable distribution of incomes.
  • Interventionist policies that redistribute resources or entitlements have an important impact on the extent of equity in incomes that is achieved. Improvements in literacy and education reduce inequality of incomes. Public expenditure on these is very important and therefore government revenues must be adequate to enable the fiscal space for such expenditure.
  • The manner of raising tax revenue could also be important in reducing inequality. Progressive income tax systems, including recurrent property taxes, high taxes on luxury expenditure of the affluent, capital gains taxes and death duties would enable better income distribution by reducing incomes of the rich and enabling policy interventions that enhance the entitlements of the poor.
  • Diversification of agriculture is necessary as without the development of this sector poverty in India cannot be tackled and income inequality cannot reduce.

Steps taken by the government for Inclusive Growth:

The government has realized the importance of inclusive growth and has taken steps accordingly. Some of the steps taken by the government are:

  • Sarva Shiksha Abhiyaan
  • Right to Education
  • Midday meal scheme
  • Housing for All
  • Pradhan Mantri Gram Sadak Yojana
  • Pradhan Mantri Jan Dhan Yojana
  • National Social Assistance Programme
  • National Health Mission
  • Rashtriya Swasthya Suraksha Yojana
  • Pradhan Mantri Jeevan Jyothi Bhima Yojana
  • Skill India, Make in India and Digital India
  • Right to Information
  • Other initiatives like Payment Banks, Small Finance Banks.


Inclusive growth is of vital importance to fight inequality in all aspects and promote holistic development of individuals in the country. Inclusive growth is necessary for the sustainable and holistic development of all sections of the society. For economic, social and political empowerment of its citizens, the core components of the Inclusive growth must be tackled.

Topic:Ethics and Human Interface: Essence, determinants and consequences of Ethics in human actions;

Human Values – lessons from the lives and teachings of great leaders, reformers and administrators; role of family, society and educational institutions in inculcating values.

7) What do you understand by values and ethics? In what ways is it important to be ethical along with being professionally competent?(250 words)



Values are individual beliefs that motivate people to act one way or another. They serve as a guide for human behaviour. Generally, people are predisposed to adopt the values that they are raised with. All values are experiences of different degrees of importance in the development of individuality.

Ethics, on the other hand, is a branch of Philosophy which studies moral principles and helps an individual to determine what is right and wrong.


In administration, there is always possibility of clash between personal and professional values. The professional values need an administrator to be objective and impartial. However, this is not possible always. An administrator with ethical human conduct requires to act with compassion and treat people with human dignity.

For instance, consider the Niyamgiri mining issue in Orissa. The private company Vedanta wanted to mine the resources, however the hills were the abode of primitive tribes who depended on it for their livelihood. Immediate displacement would leave them homeless and jobless pushing them into despair. The issue of development of industry and employment generation and increase in state revenue by way of taxation but on the other hand is the question of ethics where a minority community with hardly any voice of their own whose livelihood and culture could get completely destroyed by the mining project.

The correct way here for an administrator would be to take into consideration the people’s plight. This way the ethical conduct is upheld by lending an ear to the people. Thus, it is imperative to be ethical along with being professionally competent.


So, whether values are sacred, have intrinsic worth, or are a means to an end, values vary among individuals and across cultures and time. Both intrinsic and extrinsic values are needed to guide individuals and a society. However, values are universally recognized as a driving force in ethical decision-making.