Answers: Mains Marathon – UPSC Mains Current Affairs Questions – November 13, 2018


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1)  Examine how ethnicity cause challenge to national integration?

Answer:

In multiethnic societies ethnicity emerges as a major political force. In most cases its impact on the political dynamics and process is considerable.

How it challenges national integration:

  1. The members of an ethnic group may find a common purpose and unity in their shared cultural heritages, which in turn may bring this group into conflict with other ethnic groups.
  2. If the members of ethnic groups are highly conscious of and have strong emotional or psychological attachment to some of these dimensions, the chances of accommodation or coexistence increasingly become difficult and problematic.
  3. Politics of separatism encourages dissident group(s) or region(s) to break away from the state to which it belongs.
  4. Religion is the most profound and to fanaticism in human society as it often constitutes an emotional element with political and economic overtone.
  5. Linguistic differences often poses serious problem for national integration. The people who speak same language often develop a strong separatist or parochial or corporate sentiment.

 

2) What is IL & FS crisis. What are the factors contributing to defaults? Also mention the steps taken by government to resolve IL & FS crisis.

Answer:

IL&FS missed more than five debt payments since August due to the lack of even short term liquidity and faces scrutiny from RBI. Credit rating agencies downgraded the company’s commercial paper to junk status. It triggered concerns around non-bank lenders whose stocks have fallen.

Factors behind the defaults:

  1. IL&FS is a story of “regulatory darkness” in India: As of now, the role of regulator has to be played by either the RBI or the Finance Ministry. Both of them ignored the problem.
  2. The problem has emerged because in the last few years, IL&FS has taken longer than expected to monetise some of its projects.
  3. Just like other infrastructure companies, IL&FS too expanded its portfolio rapidly during the infrastructure boom years and is now facing trouble with some of its projects, particularly in the roads sector.
  4. Firms have borrowed short-term when their revenue streams are long term.
  5. The rating agencies rated IL&FS as an AAA company and encouraged investors to invest their money in it. But now, they have conveniently rated it as junk.

Steps taken by government:

  1. RBI has already been cancelling licenses of those who do not have a minimum capital base of Rs 2 crore.
  2. RBI relaxed liquidity norms to ease the strain in the financial markets and allowed more bank lending to NBFCs. The provision will allow banks to free up Rs 50,000-60,000 crore of liquidity which banks can lend to NBFCs till December 31, 2018.
  3. Government filed a petition at NCLT under Companies Act. It allowed government to take over the board of IL&FS. Following this, the government appointed a new 6-member board to manage the IL&FS, which has been headed by Mr Uday Kotak.
  4. NHB has recently increased its refinancing limit by ₹6,000 crore– to ₹30,000 crore– to eligible institutions, including housing finance companies.

 

3) Why is there a lack of transparency and accountability about the financing and internal functioning of political parties in India? Why is it important to ensure transparency? Critically discuss.

Answer:

Reasons for lack of transparency:

  1. Lack of powers with Election Commission to penalise the parties for not disclosing details of donations
  2. The political parties do not come under the purview of RTI despite CIC order regarding the same.
  3. The amended sum of 2000 is a fraction of what the political parties mobilise in cash.
  4. Lack of institutionalized mechanisms to monitor every penny mobilised by political parties.

Need for transparency:

  1. To ensure free and fair elections by providing equal field to all contesting elections.
  2. To reduce the role of money and muscle power in elections.
  3. Political parties are not transparent in auditing and sharing the audit details with election commission
  4. Approximately 75% of the fund collected by political parties is anonymous
  5. Anonymous funds Maybe from drugs and crimes
  6. Quid pro quo for the donations in crony capitalism

 

4) It is said that jobless growth in India is a multicause, systemic problem. What are the causes of jobless growth? How should India fix this problem? Discuss.

Answer:

Causes of jobless growth:

  1. India’s emphasis on skill-intensive manufacturing and services over unskilled manufacturing has left a large portion of the population under-employed.
  2. India’s employment rate has been declining due to women leaving the job market.
  3. More than 8mn jobs are required every year for India to keep its employment rate constant, as its working-age population (above 15 years) is increasing by 1.3mn every month.
  4. As many as 18.3 million Indians were unemployed in 2017. According to World Employment and Social Outlook–Trends 2018 report by ILO, unemployment is projected to increase to 18.9 million by 2019.
  5. About 65% of the population in the country has an average age of less than 35 years. Such a large young population could be our strength, but due to lack of adequate employment in the country, a large number of youth is unemployed.

Way ahead:

  1. It is necessary to increase the public expenditure on basic services such as education and health, and pay special attention to employment generation.
  2. Rapidly improving human capital–– healthy individuals, including all women, with the basic education to continually learn and adapt––will be key to sustaining India’s dynamic growth trajectory.
  3. Rapidly improving agricultural productivity––against the headwinds of climate change and water scarcity––will be another key to achieving good growth and hence sustainable growth.
  4. Hyperglobalization backlash in advanced countries, over which India has little control, must recede to create a favorable external climate to sustain rapid growth.
  5. Govt initiatives such as Make In India, Digital India, Skill India and other employment generation programmes can yield results in the long term.
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