GENESIS IAS ACADEMY – HYD BAD 9949 363 363

FLT NO 301 B 3RD FLOOR RK’s KANCHAMS BLUE SAPHIRE COMPLEX ASHOK-NAGAR HYD BAD

APPSC GROUP1 (MAINS) CURRENT AFFAIRS ANSWER WRITING SESSION – 2020

TEST 11.

1. Elucidate the findings about the “ Industry and Infrastructure “ as described by the Economic Survey 219-20 ?
Topic Useful in – Paper 4 ( Economy ) - Unit 9 and Unit 11 , Industrial Development and Policy and Infrastructure
in India. Paper 1 Essay – Socio Economic Issues.

Ans) Industrial Sector Performance is critical to any economy. For India The GOI counts on the Industrial Sector For
achieving its goal if a 5 Trillion Dollar Economy , therefore the GOvt is taking all the required steps to bring in a
conducive environment for the growth of this sector. The Industry Fuels the growth in other sectors with its
backward and forward linkages.
The Industry Sector Contributes 30 % of the total GVA . The sectors performance improved in 2018-19 compared
to 2019-20 . it experienced low growth in 2019-20 due to negative growth in the manufacturing sector. This was
due to slow credit growth , rduced lending to the NBFC due to the liquidity crunch, low domestic demand, and
prevailing trade uncertainties.

Many of the Core Sectors Were also weak during the 2019. The contribution of The CPSE canoe be ignored, the
investments into them rose . The Corporate sector was not immune to the weak demand and credit crunch during
2019.

Inspite of weak demand and the trade dynamics that impacted the industrial sector performance , the prospects
of the Indian Economy doing well and bouncing back was evident due to the policies implemented by the GOI for
improving the Ease of Doing Business. India’s Rank improved from 77 to 63rd among the 190 countries. The GOI
improved in 7 out of the 10 indicators. The emphasis has been on Rationalisation and simplification of existing rules
and introduction of IT to make governance more effective and efficient. India is also working on its Start Up
Ecosystem. Apart from the above a proactive policy is being adopted by the GOI in attracting FDI.

The Economic Survey Gives a round up of few important sectors and the challenges that they face-
a) Steel – India is the second largest producer and the 3rd largest consumer consumer of steel. However its Per
capita Steel Consumption is very less at only 74.1 kg. There ahs been a slow down the production and
consumption of finished steel in 2019-20 compared to previous years since 2014-15.

b) Coal- Similar to steel the Coal production has been subdued in 201920 due to heavy rains. There is a gap
between the demand and supply of coal in the country which is being met through imports.

c) MSME – Keeping in Mind the Suupot to production and employment with very little investment, the MSME has
become the focus of the GOI and various states. 2019 seen the GOI taking important steps to support this ector
to grow. Some of the steps are Loans of upto 1 crore approved in 59 minutes online , Interest Subvention ,
easier Credit availability , 25% of procurement mandated from the MSME, All CPSU must compulsory procure
form GeM portal , 20 Technology centres and Extension centres established for the MSME , Making the filings
of Returns under the Labour laws and Union Regulation Easier.
GENESIS IAS ACADEMY – HYD BAD 9949 363 363
FLT NO 301 B 3RD FLOOR RK’s KANCHAMS BLUE SAPHIRE COMPLEX ASHOK-NAGAR HYD BAD

d) Textiles and Apparels – Contributing 18% to the manufacturing and 2 % of the GDP , the sector is the algets
employer after the agriculture , the exports from this sector have increased , but production declined like the
other sectors.

Infrastructure –
The National Infrastructure Pipeline was launched recently by the govt , the project will need an invetsmnet of Rs. 102
lakh crore for FY 2020-2025 and will play a important role for helping Indian achieve the goal of $ 5 trillion Economy.
A Task force was also created for the same. The Task force has recognised that financing the NIP will be a challenge for
India and seeks the partnership of Private as well as the International agencies. Few Sectoral developments identified
by the Survey are –

a) Road – The Road Sector is the largest Contributor to the GVA of the transport sector and handles 69% of freight
and 90% of the Passenger traffic thus it has a significant role to play in production and distribution. India has a
road network of 59.64 lakh km , and the pace at which more roads are being constructed a has increased from 17
kms per day to 29.7 kms per day.

b) Railways – Indian Railways is the 3rd largest rail network in the world and caters to passengers as well as Bulk freight.
The Rail network is being modernised with emphasis on safety, cleanliness and Environment friendly development.

c) Civil Aviation – India is the 3rd largest domestic Civil aviation in the world. The Aviation sector in India experienced
a slowdown in Mid 2019 , the Govt strategy to give a boost to this sector is to increase the domestic travel by UDAN
scheme , Developing airports and airfields in PPP Mode , Developing more green field airports, Indian govt is
providing congenial environment to double their fleet .

d) Shipping – Catering to 95% of trade by volume and 68% by value , this sector is affected by the global trade
dynamics. India despite having one of the largest merchant shipping fleet , its share in the world is less. India is
also plagued by its aging fleet which is matter of concern and needs immediate change. However the positive aspect
of the ports in India is that its turnaround time is reduced and the Average Output per Ship is improved in 2019.

e) Telecom Sector – The survey identifies that there has been increase in the Subcriptions, Wireless Mobile
Subscriptions being the highest than the land line , 98.27% . The Teledensity and Data consumption has also
increased. However the Sector is facing losses due to the tariff war and consolidation while few others are filing for
bankruptcy due to low returns. Govt has taken steps to deal with the same in the CPSU such as BSNL and MTNL by
Voluntary Retirement scheme, allotment of spectrum for 4G services, monetisation of assets, etc.

f) Petroleum – and Natural gas – India is 3rd largest producer and 4th largest Refiner , however this sector is plagued
by falling Production due to natural decline in ageing and matured field and no major discoveries , for this the GOI
has brought changes in the Oil Exploration Policy and has encouraged the Private players.
The Survey calls for integrating Industry 4.0 with Infrastructure and timely investment for the growth of this sector.

2. “ India’s Food Management should Focus on rationalisation of Food Subsidy while addressing the challenges of
food security , especially of the most vulnerable sections” , says the economic Survey 2019-20 , Comment?
Topic useful in – Paper 4 Unit 7 Agriculture Development. Paper 1 essay – Socio Economic issues.
GENESIS IAS ACADEMY – HYD BAD 9949 363 363
FLT NO 301 B 3RD FLOOR RK’s KANCHAMS BLUE SAPHIRE COMPLEX ASHOK-NAGAR HYD BAD

Ans) India still has a substantial number of Poor Population for whom ensuring “ Food Security “ is the foremost
priority of the Government. Ensuring Food Security brings with it a large number of challenges from Production
, Procurements and Distribution. All this incurs a large amount money.

The National Food Security Act which came into force in 2013 is the major provider of subsidised food grains to
the poor . It covers 75% of the rural population and 50 % of the urban population. Thus covering 2/3rd population
of the country for receiving food grains at the rate of Rs. 1/2/3 per kg for nutri cereals respectively .

While covering all the states and UT’s , Under the Act Food grains are provided at some places and at some
Money if transferred into the account of the beneficiary so that they can purchase food of their choice , example
Damn and Diu and Puducherry. Thus the whole operation of the Act occurs through large scale subsidy from
the govt to ensure that the poor gets food at affordable prices. This Food Subsidy has increased over the years
, putting a strain to the Govt’s fiscal position. The Food Subsidy Bill has increased from Rs. 113171. 2 Crore to
Rs. 171127.5 Crore , in 4 years that is from 2014-15 to 2018-19. An increase of almost , 6000 crore , there are
a few states that are providing Food grains at subsidised cost to a larger proportion of poor population making
the food security programme almost universal in these states example , TN , this places a greater burden on the
finances of the states.

For a brief overview of where the subsidy is used , the following explains-
• Subsidy provided for the Procurement of food stocks to the FCI and distribution of wheat and rice
under the NFSA and other welfare schemes.
• For maintaining the strategic reserves of food grains by the FCI.
• The subsidy provided to the states for decentralised procurement.
The reasons for the widening FOOD SUBSIDY are many –
• The NFSA while providing a wider coversgae than the erstwhile Targeted Public Distribution system (
TPDS) made the Antodyaya Scheme Prices applicable to all to get food grains , unlike before where the
antodaya constituted the poorest and they got food grains at much lesser price than the others under
the PDS,.
• The APL/ BPL categorisation was done away with under the NFSA .
• Coverage under the act was also delinked from the poverty estimates thus providing a much wider
coverage and this places a higher burden on the govt .
• The build up of food grains stocks became much higher than the prescribed norm , due to the wider
coverage, the increased economic cost due to the same , increase in MSP
Have all contributed to the rise in Subsidy bill for the govt.

Thus , while the government has the responsibility of ensuring Food Security for the poor , it also has the
responsibility of keeping a check on its fiscal health , as an increasing subsidy bill can leave the govt will less
room for making productive investments and only increase its debt.
The Economic Survey calls for revising the rates at which the food is being provided under the NFSA as a small
step that an partially reduce the subsidy bill.
Thus while the interests of the Vulnerable Sections need to be safeguarded , the issue of burgeoning Food
Subsidy Bill needs to be addressed.
GENESIS IAS ACADEMY – HYD BAD 9949 363 363
FLT NO 301 B 3RD FLOOR RK’s KANCHAMS BLUE SAPHIRE COMPLEX ASHOK-NAGAR HYD BAD

3. SDG’s Constitute a Barometer for “ Development “ , Economic Survey 2019-20 commends India’s achievements
on SDG , What do you think led to the above achievement , Briefly mention the areas where India lags behind?
Topic Useful in – Paper 1 – unit 1 Major Challenges of Indian Economy – Sustainable Development . Paper 1 Essay
– Socio Economic issues.

ANS) SDG’s constitutes a framework to assess development that on sustainable grounds. India is striving to
combine the element of sustainability to the Economic Developmnet through well designed intiatives , and this is
evident by looking a the achievement of India on the “ Sustainability Development Goals Index is commendable as
the score has improved from 57 in 2018 to 60 in 2019. As per the Index AP is included in the List of FRONT RUNNERs
with a score of greater than 65 , along with Kerela , Himachal Pradesh , Tamil Nadu , Telangana. This is a motivator
for the state.

India has followed a “ Holistic Approach “ when dealing with environment problems. It is implementing a array of
policies and schemes to achive the ADG by 2030. India’s progress in adopting , implementing, and monitoring the
SDG’s stands noteworthy. Some of the steps that have helped improve its position as specified by the economic
Survey are as follows-
a) Schemes like the Swachh bharat , Atal Mission for Rejuvenation and Urban Transformation ( AMRUT) , Smart
Grid Mission etc have ensured that the growth path also protects the environment.
b) As per the second Biennial Update Report submitted to the UNFCCC , the emission intensity of India ‘s GDP has
reduced by 21% over 2005-2014.
c) In 2014 the net national GHF emissions after including the ( Land use , Land Use change and Forestry ) LULUCF
were 2.306 billion tons of Co2 EQUIVALENT.
d) India launched the National Action Plan on climate change ( NAPCC) which focused on adaptation , multiple
steps have been taken in line with the 8 mission under it.
e) India launched the Climate Change Action Program 2014 to build support to the centre and states to strengthen
scientific and analytical capacity for climate assessment and implement climate actions.
f) The Energy Conservation Building Code ( ECBC) sets minimum energy performance standards.
g) The ECBC 2017 prescribes new energy standards for new commercial buildings to achieve a 50% reduction in
energy use by 2030 , this translates to energy savings of about 300 billion units by 2030.
h) Schemes like UJJALA for LED bulbs distribution which replaces the conventional street lights.
i) As part pf the national Electric Mobility Mission the GOI aims to faster adoption of Electric Vehicles.
j) India has aligned Its Financial systems with sustainability , SEBI , RBI have followed , India Launched the Green
Bonds in this direction.
k) At the International Stage too India is playing a proactive role, International Solar alliance aims to pave the way
for co-operation in solar power generation, Under the United Nation Convention for Combating desertification
( UNCCD) India voluntarily commited to raise its commitment of restoring the land from degradation from
21million to 26 million heactares between now and 2030.
l) India’s forest cover has increased compared to other developed countries, to 24.56% , increasing the carbon
Sink.
However there are some areas that India needs to work on immediately,
a) Stop the burning of Agriculture Residue , that pollutes the air by Particulate matter.
b) Unscientific Disposal of Building material should be done away with .
c) Investing in Circular Economy driven approach in Construction and demolition ( C&D) waste
management which will largely contribute in avoiding health and environment problems.
GENESIS IAS ACADEMY – HYD BAD 9949 363 363
FLT NO 301 B 3RD FLOOR RK’s KANCHAMS BLUE SAPHIRE COMPLEX ASHOK-NAGAR HYD BAD

d) India needs to push and play a proactive role in calling for financing the climate management from te
developed countries to the Green Climate Fund.
e) Stoping the lying of old vehicles
f) Proper Disposal of Solid waste , Electronic Waste , biomedical waste , Stopping single use plastics and
g) reduce the production of single use plastics.
h) Lack of full fledged participation from the people leaves many problems unsolved, therefore peoples
participation is a must.
India should work on the areas which still pose a serious problem and push for serious implementation of the
steps that will lead to achieving 100% success in its climate actions.

4. According to the Economic Survey 2019-20 , there has been a change in the dynamics of Inflation since 2012 ,
discuss its findings in this regard ?
Topic Useful in – Paper 4 – Unit 1 Major Challenges of Indian Economy – Inflation and Prices. Paper 1 Socio
Economic Issues.

Ans) Price and Inflation determine demand and supply, Inflation is the persistant rise in prices over a period of
time. The Global economy has been witnessing a steep decline in inflation over the past five decades , Inflation
has also declined in the emerging countries.

In India inflation has been witnessing moderation since 2014 . fall in food inflation has been a major contributing
factor in the drastic reductions observed in inflation between 2014-15 and 2018-19. Also it has been observed
that there has been a shift in inflation dynamics. The average levels of inflation have fallen considerably since
2013-14. The average level of inflation during the financial year are now much lower.

The reasons that could have contributed to the steep decline in inflation in emerging market economies like the
adoption of a more resilient monetary framework , structural reforms, structural reforms of labour, and product
markets that strengthen competition and adoption of Monetary Policy Framework for Inflationary Targeting.

Tow reason have been identified by the Economic survey for the changing dynamics of Inflation in India-
a) It was observed that food inflation has seen a declining trend during 2014-2019. The decline in inflation
has been witnessed in most categories of food group including those with a high weightage such as
cereals and products , fruits and vegetables, an pulses and products .
b) Inflation expectations have been declining since 2015 . This is attributed partially to the Inflation
Targeting Approach of the Monetary Policy Adopted by the RBI in anchoring inflation expectations.
c) Household Inflation expectations are known to move closely with food inflation. The fall in food inflation
during the above period could have had the effect of reducing the overall inflation expectations of
households.
GOI has taken various measures from time to time to stabilise the inflation vis a vis the prices of essential food
items which include utilising the trade and fiscal policy , instruments like import duty, Minimum Export Prize,
export restrictions , imposition of stock limits and advising the states for effective action against hoarders and
black marketeers etc.

Govt also incentivises the farmers in the form of MSP for increasing the production of those goods that cannot
meet the demand, thereby ensuring availability. Various schemes are being implemented for increasing
GENESIS IAS ACADEMY – HYD BAD 9949 363 363
FLT NO 301 B 3RD FLOOR RK’s KANCHAMS BLUE SAPHIRE COMPLEX ASHOK-NAGAR HYD BAD

productivity, such as Mission for the integrated development of Horticulture, National Food Security Mission,
National Mission on Oilseeds and Oil palm, etc.

Price stabilisation fund also helps to reduce the volatility of prices,, in agri horticultural commodities like pulses
, onion , and potato , recently the rise in prices of the Onions due to rains and lack of demand supply match led
to the govt to take the above steps which helped ease the inflation to a large extent.

Thus the inflation dynamics have been changing over time, in the current period there is strong evidence for a
reversion of headline inflation to core inflation , future inflation prospects and dynamics depend on overall
macroeconomics scenario as well as the containment of rising prices in certain agricultural commodities.

5. Give an overview of the findings of the Economic Survey on India’s “ Service Sector “ , what is the importance of
this sector in the Indian Economy ?
Topic Useful in – Paper 4 – Unit – 9 Industrial development and Policy. Paper 1 Essay – Socio Economic Issues.

ANS) Service sector is the third sector of the economy, and is a major contributor to India’s GDP and employment. This
sector plays a very important role in India’s Economy. The importance is further proved by taking into account the FDI
that comes into this sector, 2/3rd FDI into India goes to the Service Sector and it accounts for 38 % of the Exports from
India. The share of the Service sector now exceeds 50% of the Gross State Value Added in 15 out of 33 states with more
than 80% in states like Deli and Chandigarh. Services Exports outperformed the Goods Exports in India, due to this
India’s Commercial Services Exports have risen steadily. Thus a good Service Sector Performance has a positive impact
on the BOP and Foreign Exchange reserves. The Importance is further reiterated, as India is now giving Importance to
the service sector while negotiating Various trade agreements and major disagreements on the part of India have been
because not enough is provided in the agreement for its Services Growth Example, the agreement with Sri Lanka.

Performance of various sectors given by the Economic Survey as follows-

a) Tourism –
Tourism is a major engine of growth and contributor to the GDP , foreign exchange and employment in the Indian
economy , it witnessed a strong growth between 2015 -17 , however the growth has decelerated in 2018-19 , which
has also been observed globally. India ranks 22nd in international tourist arrival and accounts for 1.24 % of Worlds
international tourist arrival. The top 10 countries that constitute the foreign tourists to India are , Bangladesh , USA
, Sri lanka , Canada, Australia, Malayasia, China, Germany and Russia. The Top five attracting states are – TN , MH,
UP, Del, Raj . India has introduced E- Visa of various varieties to ease travel to India.

b) Information Technology , Business Processing Management ( IT- BPM)

It is a major contributor to the Indian Exports since the past two decades. IT services constitute 51 % of the IT-BPM
sector and is majorly export driven, it constitutes 55% of the exports and the BPM and Software services constitute
45%. . Software and Engineering services constitute 20% and BPM constitute 19.7%. USA accounts for the bulk of
the exports. UK is the second largest export market. A number of policy initiatives have been taken since the last
2-3 years such driving innovation , technology adoption, in the IT-BPM sector. India’s Start Up Ecosystem is the 3rd
largest now . Cites such as Bangalore , Delhi , NCR and Mumabi account for 55 % of the total Start ups in India.

c) Ports and shipping –

GENESIS IAS ACADEMY – HYD BAD 9949 363 363
FLT NO 301 B 3RD FLOOR RK’s KANCHAMS BLUE SAPHIRE COMPLEX ASHOK-NAGAR HYD BAD

The sector plays a important role in reducing the logistics cost of the exports and imports and thereby making the
Indian goods competitive. India has 0.9 % in the world Fleet as on 2019 . With a total of 13 Major Ports and 200
Minor Ports Indian has a total Cargo Handling capacity of 1452.64 Million tonnes per annum. The Turnaround time
for the Ships has continuously been declining which shows that the efficiency of the Indian Ships have improved. It
has reduced to 2.48 days. It is the lowest at Cochin , New Mangalore , V. O Chidambaram, and the Chennai Ports.
And the highest at KolKatta port. The Median Shipping time globally is 0.97 days , which means India can improve
more.

d) Space Sector –
From a Modest beginning to Exponentail Growth, the space sector has moved away from giving just mapping
services to many more . The Key areas of Focus of ISRO has been on Satellite communication , Earth observation ,
weather forecasting , Disaster Management, National Resource Mapping , Satellite based Navigation ( GAGAN
NAVIC) etc. Globally there is a shift in space activity and in terms of players , moving away from totally depending
on the GOvt to Private sector participation. Space is being used for NATIONAL SECURITY now. ISRO also has been
engaging with Indian Industries in delivering space related goods and services. Where Indian lags is , in spending, it
lags behind the major players such as USA , China and Russia. And also in the number so satellites launched per
year , where it is 5-7 in India and more than 20 in the above countries. However what is commendable is that there
are no failures in launching barring one in 2017.