Q.1) India is posed to become a $5 trillion dollar economy. Discuss various challenges and issues India face in achieving it.
|Demand of the question Introduction. Give a contextual introduction. Body. Various challenges and issues wrt achieving the target. Conclusion. Way forward.|
Presiding over the 5th Governing Council meeting of NITI Aayog recently, Prime minister of India set a goal of $5 trillion for India’s GDP by 2024, saying it is a difficult target but achievable. It will need India to grow annually at 12% over the next 5 years. Achieving such an aspirational growth target calls for pulling all the economic growth levers- investment, consumption, exports, and across all the three sectors of agriculture, manufacturing and services.
- Shift in global trade pattern– The trade intensity (ratio of global trade to global GDP) since the last financial crisis in 2008, has stagnated, in particular for merchandise trade from which developing countries have benefited for the last half century. However service trade, especially digitally enabled trade (both service and merchandise) where developed countries are advantaged, is growing much faster, which represents a major structural shift in global trade. Our growth strategies need to be built in preparation for this paradigm shift taking place in global trading pattern.
- Consumption slowdown- Everything from car sales, two-wheeler sales, and tractor sales have been falling. People are clearly not spending money at the same pace as they were earlier. The government needs to increase its expenditure in this financial year and the Reserve Bank of India (RBI) needs to cut the repo rate further. With private consumption slowing down, the government spending more will lead to increased income in the hands of people, and then they will spend more and economic growth will revive.
- Decreasing Savings- At the same time, the government spending more means the government is borrowing more to finance the higher fiscal deficit. Domestic Savings are decreasing. In present scenario of around 33% saving rate, if the government decides to spend more, it will mean the government will have to borrow more. This will leave lesser for everyone else to borrow and push up interest rates. India need savings to be around 39% to achieve $5 trillion status.
- Stressed Public sector banks- The Public Sector Banks are driver of economic growth. They have been in a mess for some time now. As of 31 December 2018, the total bad loans of these banks amounted to ₹8.64 trillion. In the last two fiscal years, the government has invested ₹2.06 trillion into these banks to recapitalise them and to keep them going. Government will have to continue investing money in these banks in order to recapitalise them. The government also needs to prevent further accumulation of bad loans in the future.
- Lagging Exports- In 2018-19, the exports of goods stood at $329.6 billion. Exports to GDP ratio in 2018-2019 stood at 12.09% of the GDP. It was just about higher than the exports to GDP ratio of 11.78% in 2004-2005. This is a serious anomaly which needs to be set right. Also, India seems to be moving away from low-value exports.
- Shift in export nature- India’s export basket in recent years has shifted away from primary and traditional low value-added exports to higher value-added manufacturing and technology-driven items. India hasn’t done well on front of low-value labour-intensive exports while high-value skill oriented exports have done well. In the recent past, we have lost out to other Asian countries. The new government needs to encourage labour-intensive exports at all costs. For starters, this means carrying out labour reforms, where the smaller firms aren’t expected to follow the same rules as the larger ones.
- Loss-making PSUs- Just after independence, India had only five central public sector enterprises (CPSEs). As of March 2018, there were 339 CPSEs. There are many loss-incurring CPSEs. BSNL and Air India are some examples. Any talk of selling or shutting down such companies creates a lot of criticism. There are many other small CPSEs, which make losses every year. They also don’t employ many people like the bigger CPSEs. There is a lot of capital blocked in these companies. These companies and their can be sold, and money can be raised to build the better physical infrastructure that the country badly needs. Disinvestment by government is a right step.
- Agriculture distress- The short-term reason for distress in agriculture has been falling food prices. There is a long-term reason also. In 2004-2005, agriculture, forestry and fishing, as a percentage of GDP, stood at around 21%. It has since dropped to around 13.1% . This means that people need to be moved away from agriculture and that is something which hasn’t happened. Typically, as countries move from being developing countries to becoming developed countries, the farming labour first moves en masse towards low-end construction and real estate jobs, given that the skill set required for these jobs is very low. In India, that hasn’t happened to the extent necessary.
- Environmental Concerns- Indian cities are at top when it comes to air pollution rankings across the globe. Maintaining development with healthy environmental is a big challenge. India need to adopt sustainable measures to achieve sustainable growth and development. Green projects, green funding, implementation of Fame-India scheme, shifting to cleaner energy are right steps.
- Jobless and non-inclusive growth- Although set to become a $5 trillion economy, India’s recent growth story is non inclusive. Jobless growth as was mentioned in economic survey is a big issue for India whose 23.6 % population is under poverty. Increasing automation, technological driven growth demand new skills and new jobs to be created for true inclusive growth and development.
Our economic development models are still very much geared to large scale top-down approach. We have to find innovative ways to identify, include and scale these development efforts in our national planning in the 21st century. There is an opportunity that the new government has to do a few things to resolve these challenges. Steps like Skill India, Make in India, Saubhagya Scheme, etc. will help India to achieve the feat facing these challenges, at an adequate scale. That’s what India needs over the next five years.
Q.2) Explain Mahatma Gandhi’s philosophy of Satyagrah. Do you think Satyagraha is still a relevant mode of protest in modern times?
|Demand of the question Introduction. Define what is Satyagraha. Body. Write some details about Satyagraha and its relevance. Conclusion. Way forward|
Satyagraha, (Sanskrit and Hindi: “holding onto truth”) as a concept was introduced by Mahatma Gandhi to designate a determined but nonviolent resistance to evil. Gandhi’s satyagraha became a major tool in the Indian struggle against British imperialism and has since been adopted by protest groups in other countries.
What is Satyagraha according to Gandhiji?
The term Satyagraha was first coined by Gandhiji in South Africa to express the tendency of the Indian minds and methods of meeting violence, injustice or of thwarting unjust laws of racial discrimination practiced by the white minority there.
- It is a method which involves a breach of the law, but without causing physical harm to the agents of the law. The purpose is to undermine the unjust system so that it gives way and reform can be achieved.
- It was conceived as a weapon of the strongest and excludes the use of violence and hatred in any shape or form. Satyagraha is a relentless search for truth and determination to reach truth not by inflicting of suffering on the opponent, by on one’s self.
- Non-violence is the basis of Satyagraha. For Gandhi, a Satyagrahi obeys the laws of society intelligently and of his own freewill, because he considers it to be his sacred duty to do so.
- Satyagraha, as conceived by Gandhi, was never a mean to the disrupt the society. According to this philosophy, satyagrahis- achieve correct insight into the real nature of an evil situation by observing a nonviolence of the mind, by seeking truth in a spirit of peace and love, and by undergoing a rigorous process of self-scrutiny. In so doing, the satyagrahi encounters truth in the absolute.
- Satyagraha includes more than civil disobedience. Its full range of application extends from the details of correct daily living to the construction of alternative political and economic institutions. Satyagraha seeks to conquer through conversion: in the end, there is neither defeat nor victory but rather a new harmony.
Is it a relevant mode of protest?
As people begin to feel the injustice to which they and their fellow citizens have been subjected to, an injustice that needs to be battled, they also come to think about the methods that should be used to battle these injustices. In the process, they are politicised and motivated to act. And this Gandhi felt was revolutionary because public opinion becomes a vital force, challenges injustice, and challenges the government for its acts of omission.
- Satyagraha act as protest movement against authority or establishment, it can serve not only as a check on the abuse of power but also as a medium of educating public opinion.
- The first condition precedent to any civil resister is that there should be surety against any outbreak of violence. It should be obvious that civil resistance cannot flourish in an atmosphere of violence.
- Satyagraha can communicate the idea that the rulers have no automatic claim to respect. Unless people can exercise their judgment, employ their reason, and sound their conscience to evaluate the government and the laws they obey, they cannot be free, and at the same time, law-abiding citizens. Therefore, Satyagraha in its civil disobedience form is possible in any political system.
Examples of effectiveness of non-violent techniques can also be seen from countries other than India. The Norwegians organised an effective non-violent resistance against authorities during the German occupation in the Second World War. The Czechs organised protest against the Russian army for a couple of days. But what is happening today in the context of our social, political and economic life falls far short of the Gandhian values and methods. We find around ourselves strikes, fasts, dharnas, satyagrahas, picketing, gheraos, and many more things of the kind, all undertaken to back some demands. Ends are more important to us than the means.
Q.3) The global automobile fleet is marching forward to wean away from fossil fuels. Critically analyse various issues and challenges in front of Indian automobile industry to shift to electric vehicles. How India can become a world leader in electric vehicles industry?
|Demand of the question Introduction. Give a brief about the electric vehicle scenario. Body. Discuss various issues and challenges. Conclusion. Way forward.|
According to the Global Electric Vehicles Outlook report released by IEA in 2017, the global electric car stock surpassed 2 million vehicles in 2016 after crossing the 1 million threshold in 2015, with similar trends in many nations. The Vahan Dashboard website of the Union Ministry of Road Transport and Highways shows that the total sale of all Electric Vehicles, including hybrids, saw an impressive seven-fold increase in 2017. India launched, Faster Adoption and Manufacturing of (Hybrid and) Electric Vehicle (FAME) Scheme, in 2015 with an aim to develop electric vehicles ecosystem in India. Also National Electric Mobility Mission Plan target of having 6-7 million electric vehicles by 2020.
Issues and Challenges-
- Taxes- To incentivise electric vehicle sale government need to lower down registration price and taxes, which will not be an easy task and will put fiscal burden. Methods to mobilise funds and targeted subsidies should be explored.
- Charging infrastructure- And the present level of charging infrastructure in India isn’t encouraging. According to a Bloomberg New Energy Finance report, India currently has about 350 charging points, while China had about 215,000 installed at the end of 2016. Without adequate charging infrastructure, auto makers will not have the incentive to manufacture EVs. Consumers will not shift to EVs unless the very basic requirement of charging stations at regular intervals is met.
- Limited Range- One of the largest disadvantages of EVs is their limited range, meaning they can run only for a fixed, limited distance on a single charge. This discourage customers to go for electric vehicles.
- Battery Cost and slow charging- Two-wheelers have lead acid battery that takes longer to charge—8-9 hours. It also costs around Rs. 22,000 and has a warranty of only one year. Customers want shorter charging time and longer warranty period. This is a hurdle in electric vehicle sales.
- Vehicle Cost- Average vehicle prices in India are very low when compared globally. For example, if we talk globally, people in US, EU would not mind spending around $35,000 on a new car. That figure is about $15,000 for people who buy a new car in China. But India, the average price of a car is less than $10,000. And therefore, people will be looking to buy an electric vehicle only when the prices of EVs will fall in that range.
- Lack of clear roadmap- Although government has launched many initiatives and targets like FAME Scheme, it is not clear how India will achieve it. Manufacturers and sellers need a single policy that laid out a roadmap for creating an EV ecosystem, including charging stations and manufacturing and buying incentives.
- Lack of coordination- It require not only a centre alone effort, centre-state coordination is must for implementation of any policy or target. Further various departments and ministries need to coordinate to make it feasible. E.g. EV charging station can be set up at petrol pumps which need coordination with oil ministry.
- Uninterrupted Electricity- The government hasn’t specified how it plans to generate uninterrupted electricity in cities, where power shortages are routine, let alone provide universal access to electricity in the hinterland.
What the need to be done?
- An electric vehicle (EV) charging infrastructure policy, which will also allow individuals to set up charging station for commercial use to boost e-mobility is needed.
- The government needs to implement significant subsidy schemes and put up mandates which will encourage car buyers to look at electric vehicles.
- There should be a good network charging infrastructure across the country. Private players should be involved in this as well. Also, the state-owned utilities will need to invest in charging infrastructure as well although their financial health is not at par with state-owned electric utilities in other parts of the world.
- Factors such as unreliable electricity supply, lack of co-ordination between different government levels and lack of demand for EVs keep private players away from investing in charging infrastructure should be taken care of.
India is trying to curb air pollution, strengthen energy security and mitigate climate impacts. Electric vehicles (EVs) provide these co-benefits. Official estimates show that India with ambitious EVs can save about 64 % of energy demand for road transport, 37 % of carbon emissions by 2030 and save $60 billion in diesel and petrol costs by 2030.
Q.4) Government of India, recently started the lateral entry scheme for appointing joint secretaries. Do you think it is a right decision? Critically discuss.
|Demand of the question Introduction. A contextual start Body. Benefits, need and concerns wrt lateral entry. Conclusion. Way forward.|
In a bid to rope in the expertise of private sector professionals, Union government had notified 10 positions of joint secretaries through ‘lateral entry’ scheme. Generally, senior bureaucrats are appointed as joint secretaries in several government departments.
Need and benefits of Lateral Entry-
- Inefficient Bureaucracy– Bureaucracy in past is criticised for being inefficienct. There is need to change the inefficient behaviour and attitude of bureaucracy. Lateral entry can increase bureaucratic efficiency and productivity through their experience and expertise.
- Experience and better governance- Experience of industry can be used by government to prepare better public policies. Also they bring in fresh and vast ideas. Lateral entry like Manmohan Singh, Vijay Kelkar is an example.
- Expertise- Civil servants enter public services as generalists, building expertise starts quite late for them. Many sectors demands expertise such as water, energy, environment, revenue. One person cannot be an expert on the entire sector. Hence, expertise can be taken advantage of by bringing into government to frame appropriate policies and take necessary actions.
- Monopolies- Monopolies of bureaucrats especially IAS, in ministries like science and tech, home ministry, and other, lead to thinking themselves as superior and many a times cause corrupt practices, coordination issues. This must end.
- Quick decision making– Often bureaucrat fear of taking decisions due to their assumed consequences. It lead to delay in decision making. Lateral entry could remove this and ensure quick decision making as professionals from industry usually do big projects and projects which require very quick decisions.
- Accountability- India has a high rate of corruption, particularly in states. So to allow private people for short term where they can leave without accountability and any responsibility is a major concern. There cannot be any disciplinary control over them or the actions taken.
- Difference in work culture- Government departments work differently than private industry. While government focus on development of nation, main focus of industry is profit. This may cause mismatch and faulty decisions.
- The fairness of the selection process– The process of recruitment should not be corrupt. But lack of clarity on standards of selection procedure can lead to misuse, and can turn into corrupt practices. There should be proper guidelines of selection criteria
- Lack of Experience– The level of experience gained by regular bureaucrats during initial years dealing with common man problem will be absent in lateral entrants. Also common man problem is better understood by regular bureaucrats as they have better field experience.
- Demotivation– It will be demotivate regular entrants and there might also be high attrition in bureaucracy. They will not find any incentive to join the bureaucracy.
- Political favouritism– They might be inducted due to their political ideology, political connections. Political-corporate nexus is already evident. This will lead to attrition of quality of public services.
- Corruption and Nepotism- There are high chances of them indulging in short term benefits and political executives might indulge in nepotism. Also there are no checks and balances to this.
What should be done?
- There is a need to first bring in political reforms along with administrative reforms. The politicians should allow the civil servants to do their job properly.
- There is a need to give incentive for good work. Having lateral selection after certain level of seniority within the government will allow sufficient competition in play and get good people.
- Those who fail to perform, shall retire. It is not necessary that everyone who joins the services should retire at secretarial levels.
- Even at state level such steps should be taken. There should be written examinations and interviews at middle level career to weed out incompetent people.
For the sectors that require more of technical and domain knowledge, lateral entry can be considered a good option. In principle it is a good idea. But the private sector should be involved only when there is a required gap to be filled. Along with recruitment, they should be also made accountable for the actions and decisions taken in capacity of a government officer.