QEP 2022 Theme General State TheIAShub Sample FI

MAINS 2022/23
TARGET 600+ IN GS & ESSAY
Theme:
General State of
MK Yadav Indian Economy
Ex-IB Vigilance Officer, GoI
ADMISSIONS
OPEN
SAMPLE HANDOUT
QUALITY ENRICHMENT PROGRAMME: TARGET 2022/23
Under the Guidance of M K YADAV
S.# WHAT UPSC COVERED QEP COVERAGE Pg #

DEMANDS? IN QEP?
1 Facts to Support ✅ KEY FACTS 2
Arguments
2 Relevant Keywords for ✅ THEME WISE KEYWORDS 4
Mature Answers
3 Case Studies / Good ✅ SPEECHES OF PM, VP & PRESIDENT 6
Examples
4 Quality Core Content ✅ ‘REVIVING & RECONSTRUCTING’ POST PANDEMIC ECONOMY 8
with Micro Diagrams ✅ 15
for Multidimensional AATMANIRBHAR BHARAT
Answers
5 Understanding UPSC ✅ PREVIOUS YEAR QUESTIONS (2013-2021) 17
Trends - Some Expected Questions For 2022/23
6 Express MORE in ✅ TOPPERS’ HANDWRITTEN ANSWERS 19
LIMITED TIME & Space
OUR UPSC CSE MAINS 2022 ENRICHMENT COURSES
200+ TOTAL
SELECTIONS
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1
1 GENERAL STATE OF ECONOMY: KEY FACTS
Gross Domestic Product • Real GDP (At Constant (2011-12) Prices): $2 Trillion (₹145 lakh crore)
(GDP) • Nominal GDP (At Current Prices): $3 Trillion (Rs. 235 Lakh Cr)
(2021-22, NSO)
• Growth rate (2021-22): 8.7% (as against a contraction of 6.6% in 2020-21).
• Global GDP ranking
GDP rank and Growth rate
- 6th largest economy (in terms of nominal GDP)
(NSO, Economic Survey 2021-
- 3rd largest, after China & USA (in terms of PPP)
22, IMF's World Economic
• Future prospects (2022-23)
Outlook)
- India Projected as Fastest Growing Major Economy at 7.2% (RBI).
- Strong Revival - Overall Indian Economy recovered past Pre Pandemic Levels
• Agriculture - 19% (higher than world's average (6.4%). Agriculture cushioned the
Sectoral share in GVA shock of the COVID-19 pandemic.
(Economic Survey 2021-22) • Industry – 28% of which Manufacturing 16.5% Lower than world's average
• Services - 53% of 30% & 65% resp.
• Agriculture & allied sector: 4% (3.6% in 2020-21)

− Only sector that showed buoyant growth amid COVID induced slowdown.
Sectoral Growth Rates • Overall industrial:11.8% (after contracting by 7% in 2020- 21)
2021-22 • Manufacturing: 12.5% (after contracting by 7% in 2020- 21).
(Economic Survey 2021-22) • Services sector: 8% (after contracting by 8.4% in 2020- 21) ➔ Most impacted by
COVID induced restrictions, esp. Contact based services like Hotel, Tourism,
Trade.
Per Capita Income (2021-22) • In real terms (at 2011-12 Prices): ₹ 95, 000 (growth of >7.5% over 2020-21) ➔
(NSO) but remains below pre-Covid level.
• Fiscal Deficit 2021-22: 6.9%
- Budget 2022-23 Target: 6.4%
Fiscal deficit (FD)
- Overall Target: Reduce fiscal deficit below 4.5% of GDP by 2025-2026
(Economic Survey 2021-22)
• Cause - High FD mainly due to increased expenditure ➔ Both Revenue Exp. (Food
& other Subsidies) & Capital Exp. (mainly on Infra intensive sectors)
Domestic Savings • Savings to GDP Ratio: About 28% (declined from 32.7% in 2011)
• Investment to GDP Ratio: About 30% (declined from 34% in 2011) ➔ But highest
Investment
in last 7 years due to increased Government’s Capital expenditure.
• Rank: 63rd out of 190 countries in 2019 (77th in 2018).
Ease of Doing Business • India for the third consecutive year was present in the list of 10 economies where
the business climate has improved the most.
• Total Exports (2021-22) - $670 billion
- India achieved $400 billion goods exports target for the first time.
Exports from India
• Top Exports: Petroleum Products, Jewels (Pearls, Precious/semi-Precious stones),
(Annual Report-Ministry of
Drug Formulations, Gold, Iron and Steel
Commerce & Eco Survey)
• Top 5 Export destinations: USA > UAE > China > Bangladesh > Hongkong (China
slipped from 1st to 3rd).
2
• Total Imports (2021-22) - $750 billion (approx)

Imports for India
• Top Imports: Petroleum (Crude), Gold, Jewels (Pearls, Precious/semi-Precious
(Annual Report-Ministry of
stones), Petroleum Products, Coal.
Commerce)
• Top 5 Import Sources – China > UAE > USA > S. Arabia > Iraq
• CAD (2021-22) - 1.7%
Current Account Deficit - After being in surplus in 2020-21 (0.9% of GDP), CAD now expected to hit a
(as a % of GDP) 10-year high of 3.3% of GDP in 2022-23
(RBI) • Remittances – Nearly $87 Billion in 2021 (largest).
• FY 2021-2022: $83.5 Billion (Highest ever)
FDI in India • Top contributors to India's FDI: Singapore (27%), US (18%) and Mauritius (16%).
(DPIIT Data) • Sectors attracting highest FDI Inflows: Computer Software & Hardware (25%),
Services Sector (12%) and Automobile Industry (12%).
• Top recipient states: Karnataka (38%), Maharashtra (26%) and Delhi (14%)
Forex Reserves • USD 595 billion (As of May 2022) ➔ 4th Highest Globally.
• Nearly 90% (FRBM Target 60%)
Public Debt to GDP ratio - Higher borrowing resorted to due to COVID-19 pandemic & sharp contraction
(Centre + States) in the GDP.
• External Debt to GDP ratio: Around 20% of GDP ($630 Billion, Dec 2021)
• CPI Inflation (April 2022) at 8 year high of – 7.8% (above RBI’s Inflation Target of
6%). WPI at 15%.
• Causes:
- Global Factors (‘Imported Inflation’) - Ukraine Crises (edible oil, fertilizer),
Inflation (MoSPI data)
higher crude oil & commodity prices, disruption of supply chain (COVID
induced), Economic revival (due to stimulus) & unleashing of pent up
demand, etc.
- Domestic factors – Food inflation, logistics constraints (covid induced) etc.
• Moody's: Baa2 (it is now raised the outlook on India’s sovereign rating to ‘stable’
from ‘negative’)
Credit Rating of India (2022) • Fitch: BBB- (lowest among countries rated in the investment grade)
• S&P Global Ratings: BBB- (retained India’s lowest investment grade)
==========================================================================================
3
2 THEME WISE KEYWORDS
S.No. KEYWORDS
1 Ease of doing (Business/ science/ agri-exports) & Ease of living
2 One nation, one tax/election/market/license/Grid/Standard
3 From Socialism with Restricted Entry to Marketism without Exit
4 From Crony Socialism to Stigmatized Capitalism
5 From British Raj to Billionaire Raj
6 From Limited Liability to Little Liability
7 From ‘Slowdown’ to the ‘Great Lockdown’ to the ‘Great Meltdown’
8 From Economic Complexity to Economic Prosperity
9 From Episodic Accountability to Continuous Accountability
10 From 'Whole of Government Approach' to the 'Whole of Country Approach'
11 From Committee Based Allotment to Competition Based Allotment
12 From Islands of Success to Massification of Prosperity
13 From ‘command and control’ mode and to ‘plug and play’ mode.
14 From Pro Crony to Pro Business Approach
15 From Incremental changes to Quantum Jumps
16 From Reforms to Results
17 From Jobless growth to Export-led, job-creating growth
18 Inclusive Economic Institutions vs Extractive Economic Institutions
19 Regulatory Cholesterol + Policy Paralysis
20 Fighting future’s war with yesterday’s ammunition
21 Bounties for the Well Off
22 Regulatory Relics of Pre Liberalisation
23 Regulatory Capture by Private Interest
24 Middle-income trap
25 Premature de-industrialisation
Compassionate Capitalism, Patient capital (returns on investment unlikely to materialize in initial
26 years) and Casino Capitalism (Financial Speculations)
27 Creative destruction of capital
28 Gap between ‘macro planning and micro implementation’ & between ‘Aspirations and Achievements’
29 ‘Animal Spirits’
30 Natural Premium on Honesty
31 “Sabka Saath, Sabka Vikas, Sabka Vishwas, Sabka Prayas”
32 Vocal for Local with Global outreach / Build local, to go global / Localisation of Supply Chains
33 Economic nationalism
34 Ethical Wealth Creation
35 “Invisible Hands of Market” and “Hand of Trust” (Moral Hand)
36 5I For Rapid Development - Intent, Inclusion, Investment, Infrastructure, Innovation
37 4 D - Democracy, demography, demand, decisiveness
38 4 L (Reforms) – Land, Labour, Liquidity, Law
4
39 Cooperation in spirit, collaboration in action, combination of ideas

40 For New India - de-regulation, de-licensing, de-bottlenecking
41 Indian solutions, global applications
42 Integrating Assemble in India for the World ➔ Make in India ➔ Made in India for the World
43 Reform with intent, perform with integrity, transform with intensity
44 Think Big, Start Small, Scale Fast
Growth vehicle of India is running on 4 wheels with new thinking and new approach
1) Society - aspiring
2) Government - encouraging
3) Industry - daring
45 4) Knowledge - sharing
46 “3 T Test” of fiscal stimulus to be effective: Timely, Temporary and Targeted
47 Black Swan Event
48 Bouquet of safety-nets
49 ‘Lockdown Dividend’
50 Saturation of Schemes
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QEP NEW & UPDATED!

5
3 SPEECHES OF PM, VP & PRESIDENT

3.1 FROM THE SPEECHES OF HON’BLE PRIME MINISTER
• With the resolve of AatmaNirbhar Bharat, we are building the foundation of India for the next 25 years.
• PM’s address at the launch of PM Gati Shakti, National Master Plan.
- Today’s mantra is – ‘Will for Progress’, ‘Work for Progress’, ‘Wealth for Progress’, ‘Plan for Progress’
and ‘Preference for Progress’.
- Progress will be considered only when there is momentum, an impatience for speed, and a collective
effort.
- In this decade, the power of speed will form the basis of India’s transformation.
• On Need for infrastructure for Economic Development
- The foundation of progress in the modern world lies on modern infrastructure.
- We have to work together for next generation infrastructure, for world class manufacturing, for
cutting edge innovation and for New Age technology.
• On Cooperatives led development & Formation of New Ministry of Cooperation
- Cooperativism, in which the collective power of the masses becomes the driving force of the
economy, is important for the country’s grassroots level economy.
- Co-operatives are not just a system with a network of laws and rules, but co-operative is a spirit,
culture, and a mindset of collective growth.
- Non-cooperation was a weapon for gaining independence before. ‘Cooperative’ is a weapon to
achieve prosperity after independence.
• On Standards of Manufactured products for Exports
- Each of our products is a brand ambassador of India ➔ we should now aspire to win over the global
market.
• नैकं चक्रं परिभ्रमति i.e., the car cannot run with only one wheel. All wheels should be running properly.
(Can be used for all inclusive development, or progress in all variables of GDP growth etc)
• Development should be all-round, all-pervasive, all-inclusive.
• On People’s Participation - Leaving behind the work culture that ‘the government alone knows
everything and the government alone will do everything’, now the country is moving forward with the
spirit of ‘Sabka Prayas’ (everyone’s efforts).
• Actualising ‘Sabka Prayas’ – (can be used in Essay)
- “One atom in this universe cannot move without dragging the whole world along with it.” That is
why, it is important that individuals, organisations and governments work together to make our
planet more prosperous and sustainable.
- A ‘Nation’ is not an arrangement of power or government. ‘Nation’ is a living soul.
EXCERPTS FROM PM MODI’S SPEECH ON AATMA NIRBHAR BHARAT (RELEVANT FOR ESSAY)
• Self-Reliance is not our dream, rather a responsibility for all of us.
• Our responsibility to make the 21st century, the century of India, will be fulfilled by the pledge of self-reliant
India.
• "Self-reliant India" is the only path. It is said in our scriptures – Eshah Panthah - That is - Self-sufficient India.
• India does not advocate self-centric arrangements. India's self-reliance is ingrained in the happiness,
cooperation and peace of the world.
• The culture and tradition of India speaks of self-reliance, and the soul is VasudhaivaKutumbakam (the whole
world as a family).
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• The premise of Indian Culture is 'माता भमू मिः पत्र

ु ो अहम ् पथृ िव्यिः' - the culture that considers the earth to be the
mother.
• When ethics are filled with duty, the culmination of diligence, the capital of skills, then who can stop India from
becoming self-reliant?
3.2 FROM THE SPEECHES OF HON’BLE PRESIDENT

• Slow and steady steps in the right direction are preferable to rapid strides in the wrong direction (can
be used for calibrated approach to development, or feedback based implementation of
policies/legislations).
• India lives in its villages which cannot be allowed to lag behind in development. (Can be used for
importance of inclusive rural development).
==========================================================================================
7
4 ‘REVIVING & RECONSTRUCTING’ POST PANDEMIC ECONOMY
4.1 BACKGROUNDER
TRACING THE PERFORMANCE OF INDIAN ECONOMY OVER LAST 20 YEARS: ‘Understanding the Past to Prepare
for the Future’ - To be discussed in the Class
4.2 UNDERSTANING KEY DEFINITIONS

What is Recession?
An economic recession signifies a decline/contraction in the GDP. It is typically recognised after two to three
consecutive quarters of GDP decline. India witnessed negative growth on 2 occasions – in 1979 and in 2020-21
(driven by COVID pandemic induced losses).
What is Economic Slowdown?
A slowdown refers to decrease in the pace of the GDP growth. An economic slowdown may be due to cyclical
or structural factors.
What is a cyclical slowdown?
• A cyclical slowdown is a period of lean economic activity that occurs at regular intervals.
• Such slowdowns last over the short-to-medium term, and are based on the changes in the business
cycle ie. periods of peak performance followed by a downturn and then a trough of low activity.
• Countercyclical measures - Generally, interim fiscal and monetary measures, temporary recapitalisation
of credit markets, and need-based regulatory changes are required to revive the economy.
What is a structural slowdown?
• A structural slowdown is a more deep-rooted phenomenon that lasts over a long-term.
• Such slowdowns are driven by disruptive technologies, changing demographics, and/or change in
consumer behaviour.
• Measures - To overcome structural slowdowns, “structural reforms” are needed, for eg. Reforms
carried out to address the crisis in 1991.
4.3 ANALYSIS
CAUSES OF SLOWDOWN: (Combination of Structural Factors + Cyclical Factors + COVID + Global Uncertainties)
• Pre COVID-Weak Aggregate Demand - All major “demand side” contributors to economic growth, i.e.
Investment, domestic consumption, & foreign consumption/exports, and Govt. spending slowed down.
• COVID Induced Triple shocks to economy – Demand shock (due to quarantine), supply shock (due to
disruption in logistic & supply chains), and financial sector shock (due to liquidity crunch & rising NPAs).
• Declining Wage growth & Incomes ➔ Consumption slowdown
- Reduced Wage growth (Pre COVID) - Rural wage growth declined from 28% in 2013-14 to 5% in
2019 & the corporate wages declined from a peak of 20.5% in 2010-11 to single-digit growth in FY19.
✓ Causes – Rural and agriculture distress, low MGNREGA wage increase, low national minimum
wages, rising unemployment due to slowdown in various sectors (for eg. Automobile, real
estate & construction, manufacturing, trade, hotels, transport, communication, etc.).
- COVID related shocks to incomes - lockdown induced unemployment (primarily in informal sector),
wage cuts, reduced incomes of self employed, declining domestic (urban to rural) and foreign
remittances, etc. 84%of Indian households have lost income due to the lockdown (CMIE Survey).
- Declining incomes led to a fall in private consumption, which contributes nearly 60% to India’s GDP.
• Declining Savings –
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- Total Gross Domestic Savings declined from 32.7% in 2011 to about 29% in 2019-20.
- Declining incomes and wage growth (Pre COVID) have resulted in lower household savings rate
which is the biggest contributor to total savings in the economy ➔ less investible surplus available
for investment ➔ economic slowdown.
- COVID related shocks to savings - increase in out of pocket expenditure due to Health expenses,
increased food expenses (due to rising prices of essential commodities, school closures & lack of
access to free mid-day meals etc), migration costs, breakdown of social safety nets, etc.
• Declining Investment –
- Gross Fixed Capital Formation (GFCF) (an indicator of investment in the economy) declined from
34% in 2011 to 30% in 2019-20 (NSO).
- Private Corporates investment growth (Pre COVID) has been sluggish (stagnating at 11%) on
account of demonetization, GST, high cost of borrowing, unavailability of finance, inadequate
infrastructure, restrictive land & environmental regulations, inflexible labour reforms, failing PPP
arrangements ➔ Stalled projects ➔ Lower profits ➔ Lower investment ➔ Lower Economic growth.
- Household sector, one of the biggest contributor to the total investment, investing nearly 77% in
the real estate sector, has been on a decline due to demonetization, lower wages & lower savings.
- COVID related shocks to investment – Uncertainty has stalled private, household, and foreign
investments ➔ risk averse investors in “wait & watch mode”.
• Inability of Public investment to pick up
- Limited fiscal space (Pre COVID) to announce any stimulus package due to govt’s obligation to
maintain fiscal deficit below target levels, high debt levels of centre & state govts., lower tax
collections, apprehensions towards an expansionary fiscal policy (inflation spiral) etc.
- Inadequate COVID related fiscal stimulus – Aatma Nirbhar Bharat stimulus package, amounting to
10% of GDP has direct fiscal package of just 1-1.5% of GDP. [Other countries: Japan (21%), USA
(13%), Sweden (12%), Britain (5%), China (3.8%)]
• Declining Exports: Global Factors
- Exports as a per cent of GDP declined from 24.5% (2011) to 18.5% in 2019-20.
- Rising global trade tensions (Pre COVID) on account of US-China trade war, increased
protectionism, BREXIT crises, etc. and their adverse impact on Indian exports, FDI and FII.
- COVID related shocks to Exports – Spread of COVID-19 to multiple countries has led to significant
decline global demand and disruptions of supply chains (local & global).
• Stress in NBFC & Banking sector –
- NBFC crisis (Pre COVID) triggered by IL&FS default led to a liquidity crunch in the economy, esp.
impacting credit availability for MSME sector and loans to households.
- Challenges faced by Insolvency and Bankruptcy Code (IBC) to resolve cases in a time-bound manner.
- COVID related shocks to Financial sector - Relief measures like moratorium on repayment, onetime
restructuring option, Suspension of fresh initiation of insolvency proceedings, exclusion of COVID-
19 related debt from the definition of ‘default’ etc. ➔ increase in NPAs ➔ greater provisioning &
lower profitability ➔ reluctance of the banks to lend more.
• Persistent under performance of Agriculture –
- Due to structural factors such as slow paced Agri reforms, sub-normal monsoons, low agri-credit
growth, and high NPAs ➔ Contraction in Agriculture growth ➔ lower farm/rural incomes ➔ Lower
consumption demand (rural population = 70% of pop.) ➔ Lower Economic growth.
- It has also resulted in loan waivers by several states, further reducing fiscal space for increasing
government spending to boost demand.
• Manufacturing sector - A more structural issue is stagnation in contribution of manufacturing sector to
GDP at 16-17%, for last 30 years, way below the intended target of 25%.
• Disruptive effect of two major reforms – ie. Demonetization and GST, especially on informal sector,
agriculture sector, MSME sector, small traders, exporters, etc.
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RECENT MEASURES UNDERTAKEN TO REVIVE THE ECONOMIC GROWTH

• Aatma Nirbhar Bharat Stimulus package of Rs. 20 Trillion to pump prime the various sectors of
economy, by focusing on both Demand Side & Supply side measures and aiming for Self-reliance &
global competitiveness.
• RBI Measures to boost Liquidity & Credit creation – reduction in cash reserve ratio and repo rates,
enhancing Banks’ borrowing limits under MSF, Special liquidity and refinance facility, moratorium on
loan repayments (with certain caveats) etc.
• Food Security – PM Garib Kalyan Ann Yojana, One Nation One Ration Card, Ujjwala yojana etc.
• Boosting Employment – PM Garib Kalyan Yojana, focus on MGNREGA, Atmanirbhar Bharat Rozgar
Yojana, ASEEM Portal, etc.
• Income security
- For labour - Enactment of the Wage Code 2019 to universalise a statutory minimum wages, Atal
Bimit Vyakti Kalyan Yojana (Unemployment allowance), Shram Yogi & Karam Yogi Maan Dhan
scheme (Pension benefits for unorganised workers)
- For Farmer - PM-Kisan scheme (income transfer to farmers)
- For Women & other vulnerable section – cash transfer to Jandhan accounts.
• Bank Consolidation aimed to merge 10 public sector banks with four better-performing anchor banks.
• Surplus transfer by the RBI to the government to enhance govt’s fiscal space for increased spending in
order to boost demand.
• Steps to increase liquidity in the critical NBFC sector and Bank recapitalisation.
• Rollback of controversial tax surcharge on foreign portfolio investors (FPIs), to encourage investment
• Withdrawal of angel tax to provide relief to Startups.
• Measures for MSMEs – Loan restructuring, repayment moratorium, credit guarantee, timely payment
of outstanding dues etc.
• Sector-specific stimulus packages to revive Auto Industry, real estate & housing sector etc.
‘GREEN SHOOTS’: RECENT REBOUND IN ECONOMIC GROWTH

• Signs of Economic Revival: Growth rate of 8.7% in 2021-22 as against a contraction of 6.6% in 2020-21.
• India Projected as fastest growing major economy at 7.2% (RBI).
• Agriculture sector as the ‘Bright Spot’ - remained resilient throughout the pandemic period, cushioned
the shock of the COVID-19 pandemic.
• Strong rebound in Government tax receipts (Direct & indirect) ➔ contained fiscal deficit ➔ more fiscal
space to increase welfare & capital expenditure.
• Improved Investment to GDP Ratio to 29.6% in 2021-22 ➔ highest in 7 years.
- Reason: Driven by Public Investment - Government’s policy thrust on quickening virtuous cycle of
growth via capex and infrastructure spending.
• Robust Macro Economic Indicators – Rebound in exports performance, all time high Forex reserves,
Revival in Tax receipts, Capital Markets boom (IPOs by Start-ups), Well capitalised Banking sector with
reduced debt overhang etc.
• Biggest Vaccination drive – Minimising loss of lives and boosting confidence in the economy ➔
resumption of economic activities & lower economic impact of 2nd & 3Rd COVID waves.
• Push to digitalisation and growing opportunities for new investment in areas like e-commerce, start-
ups, renewables and supply chain logistics.
RISKS TO RECOVERY ➔ LOSS OF MOMENTUM IN POST COVID RECOVERY – To be discussed in the Class
10
WAY FORWARD: DEEP-SEATED & CONTINUOUS “STRUCTURAL REFORMS”

• Timely rebalancing of monetary and fiscal policies
- Monetary measures - Withdrawal of large surplus liquidity in the economy to tame inflation – RBI’s
tightening of policy rates is a well calibrated step.
- Fiscal Prudence – Government spending must not lead to unmanageable inflationary pressures.
✓ “3 T Test” of fiscal stimulus to be effective: which consists of Timely, Temporary and Targeted.
To this, “Adequacy” may be added.
✓ Steps to boost domestic demand and to “crowd in” private investment.
✓ Need to expeditiously meet disinvestment & asset monetisation targets to create resources for
finance.
• Steps to boost incomes
- Labour reforms (minimum wages, social security benefits, regulatory reformsetc) are crucial to
check the sharp decline in wages and to encourage private sector profits & investments.
- Focus on labour-intensive sectors & MSMEs – Apparels, textile, construction and Food Processing
to increase the job creation and, consequently, boost aggregate demand in the economy.
- Focus on creating more well-paying formal jobs.
• Agriculture sector
- Expediting agriculture reforms – APMC, MSP, land reforms, rationalization of subsidies, technology
revolution, credit & input availability, irrigation, insurance etc.
- Encourage the huge potential for growth in natural produce sectors – Food processing, Horticulture
and livestock, to meet the changing consumption patterns.
• Manufacturing
- Revamping of manufacturing and industrial policies and promotion of skill development.
- MSMEs – A focussed govt. policy, change in MSME definition based on turnover, centralised
authority to monitor and take action for delayed payments to MSMEs etc. are steps in right direction.
- Artificial Intelligence, Robotics and Internet of Things benefits needs to be captured to move up the
value chain, while managing their impact on job losses.
• Banking & Financial system - Holistic banking sector reforms, expeditious resolution of NPAs, and giving
PSBs genuine autonomy in lending, recovery and recruitment decisions.
• Capitalising on Post Pandemic Global Recovery - To become an alternative global manufacturer and
economic powerhouse, India must focus on its human capital, export competitiveness, greater adoption
of ‘frontier technology’ etc.
• Second generation Land Reforms: Land acquisition, land record modernization, itling, land leasing, etc
• Further reforms in GST
- Bringing other sectors like electricity, real estate and petroleum products under the GST ambit to
increase tax base and fiscal space.
- Rationalizing tax rates, esp. in sectors such as automobile, to stimulate demand in the sector.
• Infrastructure – Timely completion of all infrastructural projects. Leveraging benefits of National
Infrastructure Pipeline (NIP) & PM Gati Shakti Master Plan.
• Fundamental institutional reforms, Civil Services & Governance reforms: Reduction of the ever-
present virus of corruption and over-regulation must be a priority.
• Reorienting spending priorities: More spending on Health, Education, and infrastructure and less on
wasteful subsidies.
- For eg. India should increase public health spending from 1.3% to at least 3% of GDP.
• Education reforms: Focus should move away from ‘university buildings’ towards ‘building universities’.
• International Cooperation - Domestic structural policies alone cannot address all development
challenges. For shared goals and challenges, particularly in the areas of international trade, finance and
climate change, national policies need to be complemented by more effective international cooperation
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CONCLUSION
Collective political Swaraj hasn’t always translated into individual economic Swa-Raj because of inadequate
formalisation, industrialisation, urbanisation, financialization, and skilling. India should utilise this opportunity
to achieve Economic freedom.
QUICK POINTERS: PERSPECTIVES ON V SHAPED RECOVERY

1. What does K, V, and W shaped recovery mean?
• It refers to how the recovery period of an economy may look if plotted onto a graph that tracks the
overall state of the economy.
2. The government has claimed that India is witnessing a V shaped recovery. What do you understand by
the V shaped recovery?
• V-shaped recovery is witnessed when an economy suffers a sharp economic decline followed by a
strong recovery.
• India's GDP dipped a historic low of (-)24% in the first quarter (Q1) of 2020. However, the economy
rebounded to robust growth rate of 8.7% in 2021-22 as against contraction of 6.6% in 2020-21, marking
a V shaped recovery.
3. What were the driving factors behind the V shaped recovery?
• Demand side – Aatmanirbhar Bharat stimulus Growth in consumption
• Supply side – Structural reform in Agriculture, Labour, MSME, Power, & investment
Space, Defense, etc
• V for Vaccination – It was further supported by the initiation of a mega vaccination drive.
4. Do you think V shaped recovery is sufficient for macro-economic revival?
• A V-shaped recovery simply means a faster rebound. It may or may not lead to sustained growth.
• Therefore, it needs to be supported with policy measures directed at ‘continuous structural reforms’
and creating jobs and demand.
• Note: Mention structural reforms mentioned above in this handout.
5. What do you understand by K Shaped recovery?
• A K-shaped recovery occurs when, following a recession, different parts of the economy recover at
different rates, times, or magnitudes.
• It essentially splits an economy in two, with the divisions occurring along class, racial, geographic, or
industry lines.
• For eg. In terms of post COVID recovery, K shape denotes that some sectors have lagged or declined,
such as hospitality and leisure, while the some have prospered, For eg. IT/Tech.
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6. What is W shaped recovery. Did India witness it?

• Yes, India witnessed some version of W shaped recovery (a tilted W shape), as per Economic Survey.
- 1st Wave – Sharp Decline ➔ then a sharp revival
- 2nd Wave – Shallow slowdown ➔ then Revival Giving rise to Tilted W shaped curve
7. Do you think that GoI’s decision for a nationwide lockdown was wise? It dealt a severe blow to India
economic growth and took away livelihoods of millions.
• The decision to initiate a nationwide lockdown was mature and far sighted.
• It was a part of government’s overall strategy to deal with Covid Pandemic related challenges ➔ “win-
win strategy” with 2 folds objectives:
- Save human lives in the short-term (India avoided lakhs of deaths).
- Preserve livelihoods via economic recovery in the medium to long-term (through Aatmanirbhar
Bharat Package + Structural reforms in key sectors).
• Decision based on HUMANE Principle - GDP growth will come back but human lives will not. And
human lives saved today will be productive forces of future.
• Visible results of Govt’s Approach - Currently, government is gradually unlocking and easing economic
activity, thereby, enabling economy to recover to pre pandemic levels ➔ India now reaping ‘Lockdown
Dividend’.
8. What are the indicators that one can look at to gauge V shaped recovery?
Same points as under the topic: GREEN SHOOTS: REBOUND IN ECONOMIC GROWTH
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5 AATMANIRBHAR BHARAT
5.1 AATMA NIRBHAR BHARAT ABHIYAN (SELF – RELIANT INDIA MOVEMENT)

• Covid-19 crisis has provided the GoI an opportunity to go for large scale reforms to write India’s growth
story, starting with the announcement of a massive special economic package of ₹20 trillion (10% of
GDP) under the Aatma Nirbhar Bharat or Self-Reliant India movement.
• Aim:
- Convert crisis into opportunity by implementing bold structural reforms.
- To revive every sphere of the economy and make India globally competitive and integrated in the
global supply chain.
- Minimize the human cost of the crisis for the people at the bottom of the pyramid.
Key Features & Intellectual Underpinnings: Aatma Nirbhar Bharat Movement/Stimulus Package
• Focus on Structural Reforms
(4 Ls) – Land, Labour, Liquidity
and Laws to increase the global
competitiveness of India in
attracting businesses & FDI.
• 5 pillars of Aatma Nirbhar
Bharat (to sustain growth) –
Economy, Infrastructure,
System, Vibrant Demography
and Demand.
• Build local, to go global: Self-
reliance does not mean
isolation but an active
participation and integration
in post-COVID global supply
chains based on building
globally competitive local
brands.
• Decentralised Localism with Govt as an ‘Enabler’: It encourages taking pride in local brands (Vocal for
Local with Global outreach) and enables localised decision-making. For eg Scrapping of the ECA-APMC
system to enable localised decision-making by:
- Farmers, who can participate in a national common market or export to the global market.
- Traders, who can invest in supply-chains and agri-businesses without the fear of being arbitrarily
labelled a hoarder by an inspector.
• Focus on Building Resilience – It emphasises resilience and flexibility, leveraging internal strengths, local
capacity-building and indigenisation. For eg.
- Incentives and protection to key industries, for eg. pharmaceuticals.
- Disallowing global tenders of up to Rs 200 crore to protect Indian MSMEs from foreign competition.
- Changing incentive structure of defence procurement to encourage indigenisation.
- Safety nets to improve Vulnerable sections’ resilience (Ayushman Bharat Health Insurance, DBT etc)
15
• System of Social Trust - A decentralised system, where economic entities are expected to be self-reliant,
requires a generalised system of social trust and the ability to enforce contracts. This, in turn requires
administrative reforms and reform of the legal system ➔ hence, the 4 L reform.
• A sense of national mission (or “Man Making” as professed by Swami Vivekanand) – Self Reliance is
possible only through inner strength, self-belief and combined resolve of 130 crore Indian citizens.
CONCERNS REGARDING STIMULUS

• More focus on the supply side rather than on the demand side for the revival of the economy.
- The speed of adjustment of the supply side is slow because producers would not wish to pile up
inventories of unsold goods.
- Speed of adjustment of demand-side is fast as income spent raises consumption demand without
any time lag.
• More focus on Liquidity (Credit Creation) rather than Fiscal Stimulus (increased expenditure or reduced
taxes)
- While a fiscal stimulus directly puts money in the hands of people, loans need to be repaid.
- RBI’s liquidity measures (cut in repo rate, CRR) failed to create liquidity in absence of banks’ lending
capacity and individuals’ lower demand, amid lockdown.
- Thus, there is a need for a direct cash transfer model rather than debt-based fiscal stimulus
package.
• Agriculture: Concessional credit line of Rs. 2 trillion, but it is neither automatic nor assured and
marketing reforms and infrastructure creation are distant promises.
• MSME: Rs 3 trillion line of credit not enough because lenders are not always supportive in extending
loans and buyers already owe them around Rs 5 trillion.
• Corporate Sector: Distressed sectors such as airlines, tourism, etc. have been ignored.
• Migrants: Grossly inadequate relief package. This economic deprivation will have social and political
consequences.
• Disposable Income: measures of Advance access to savings (lower tax deduction at source, reduced
provident fund contributions) are marginal in scope.
• Minimal immediate impact on alleviating the present distress in the economy. Beneficial effects of
above reforms will be felt only in the medium to long term.
• Inadequate Fiscal Stimulus - It is 2.66 trillion (1.2% of GDP) of which Effective fiscal stimulus is 1.76
trillion of GDP ➔ lower than many the countries across the world. Other countries: Japan (21%), USA
(13%), Sweden (12%), Britain (5%), China (3.8%) etc.
• Fall in government tax revenues & rising government borrowing (along with the cost of the fiscal
stimulus) is likely to push the fiscal deficit of the central government to 7-8% of the GDP, (against the
targeted 3.5%).
• Crisis Intensification: There are possibilities of defaulting of fresh credit provided to the already
suffering firms. This might lead to an increase in the NPA in case if credit flow fails to revive.
CONCLUSION:
• The ANBA reforms are government’s resolve at removal of regulatory cholesterol, which has the
potential to translate economic complexity into economic prosperity.
• As Iqbal wrote, “Tu Shaheen hai, Parvaaz hai kaam tera”. You are a falcon, and it is your duty to fly. It’s
not only our duty, it’s also our time. (Note: This line may be used in various context, including Essay,
as a positive & forward-looking conclusion).
==========================================================================================
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6 PREVIOUS YEAR QUESTIONS (2013-2021)
2013
GS3
1. Examine the impact of liberalization on companies owned by Indians. Are they competing with the MNCs
satisfactorily? Discuss.
2. Discuss the impact of FDI entry into the Multi-trade retail sector on supply chain management in the
commodity trade pattern of the economy.
3. Though India allowed Foreign Direct Investment (FDI) in what is called Multi-brand retail through the
joint venture route in September 2012, the FDI, even after a year, has not picked up. Discuss the reasons.
2014
GS3
1. Normally countries shift from agriculture to industry and then later to services, but India shifted directly
from agriculture to services. What are the reasons for the huge growth of services vis-a-vis industry in
the country? Can India become a developed country without a strong industrial base?
2015
GS3
1. Craze for gold in Indians have led to a surge in import of gold in recent years and put pressure on balance
of payments and external value of rupee. In view of this, examine the merits of Gold Monetization
Scheme.
2. What are the impediments in marketing and supply chain management in industry in India? Can e-
commerce help in overcoming these bottlenecks?
2016
GS2
1. Has the Indian governmental system responded adequately to the demands of Liberalization,
Privatization and Globalization started in 1991? What can the government do to be responsive to this
important change?
GS3
1. Justify the need for FDI for the development of the Indian economy. Why there is gap between MOUs
signed and actual FDIs? Suggest remedial steps to be taken for increasing actual FDIs in India.
2017
GS3
1. Among several factors for India’s potential growth, savings rate is the most effective one. Do you agree?
What are the other factors available for growth potential?
2. One of the intended objectives of Union Budget 2017-18 is to ‘transform, energize and clean India’.
Analyse the measures proposed in the Budget 2017-18 to achieve the objective.
2018
GS3
1. Comment on the important changes introduced in respect of the Long-term Capital Gains Tax (LCGT)
and Dividend Distribution Tax (DDT) in the Union Budget for 2018-2019.
17
2. How would the recent phenomena of protectionism and currency manipulations in world trade affect
macroeconomic stability of India?
2019
GS3
1. Do you agree with the view that steady GDP growth and low inflation have left the Indian economy in
good shape? Give reasons in support of your arguments.
2020
GS3
1. Define potential GDP and explain its determinants. What are the factors that have been inhibiting India
from realizing its potential GDP?
2. Explain the meaning of investment in an economy in terms of capital formation. Discuss the factors to
be considered while designing a concession agreement between a public entity and a private entity.
2021
GS3
1. Explain the difference between computing methodology of India’s Gross Domestic Product (GDP) before
the year 2015 and after the year 2015.
2. Do you agree that the Indian economy has recently experienced V- shapes recovery? Give reasons in
support of your answer.
SOME EXPECTED QUESTIONS FOR 2022/23

• While India is projected to become the world's fastest growing economy in 2022-23, it still faces critical
post pandemic challenges. Comment. Suggest priority measures to accelerate India’s post pandemic
recovery.
• ‘Inflation's resurgence is a threat to India's budding economic revival’. Examine the factors for the recent
rise in the rate of inflation in the Indian economy. Suggest measures to combat inflationary pressures in
the economy, while safeguarding the growth objective.
• Comment on the nature and significance of posturing India as a self-reliant economy in the context of
growing protectionism around the world. Is it contradictory to India’s stand on multilateralism at global
level? Give reasons in support of your answer.
• It is believed that rising public investments have resulted in the crowding out of private investments in
the Indian economy. Do you agree? Justify your answer with suitable examples.
• “While the consumption-based nature of the Indian economy has helped it sail through the Global
Financial Crisis, it has struggled in ensuring a long term sustainable growth”. Critically analyze.
• Do you agree with the view that pro-crony policies, instead of pro-business policies, have led to
destruction of wealth in the Indian economy, post-liberalization? Differentiating between the two kinds
of policies, give reasons in support of your answer.
• Other Topics
- Why Export led Economic Growth critical for India?
- GDP Trends, Major Economic Crises faced by India (1991 Economic Crises, Global Financial Crises,
Covid induced crises), differences between them & India’s response.
- 30 years of LPG reforms.
- Is India's GDP Growth Losing Momentum?
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7 – TOPPERS’ HANDWRITTEN ANSWERS
Q1)
19
20
21
Q2)
22
23
24
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MAINS 2022/23

TARGET 600+ IN GS & ESSAY

S.# WHAT UPSC COVERED QEP COVERAGE Pg #

OUR UPSC CSE MAINS 2022 ENRICHMENT COURSES

1 GENERAL STATE OF ECONOMY: KEY FACTS

• Agriculture & allied sector: 4% (3.6% in 2020-21)

• Total Imports (2021-22) - $750 billion (approx)

2 THEME WISE KEYWORDS

39 Cooperation in spirit, collaboration in action, combination of ideas

HUGE NEW UPDATES AVAILABLE!

QEP NEW & UPDATED!

3 SPEECHES OF PM, VP & PRESIDENT

• The premise of Indian Culture is 'माता भमू मिः पत्र

3.2 FROM THE SPEECHES OF HON’BLE PRESIDENT

4 ‘REVIVING & RECONSTRUCTING’ POST PANDEMIC ECONOMY

4.2 UNDERSTANING KEY DEFINITIONS

RECENT MEASURES UNDERTAKEN TO REVIVE THE ECONOMIC GROWTH

‘GREEN SHOOTS’: RECENT REBOUND IN ECONOMIC GROWTH

WAY FORWARD: DEEP-SEATED & CONTINUOUS “STRUCTURAL REFORMS”

QUICK POINTERS: PERSPECTIVES ON V SHAPED RECOVERY

6. What is W shaped recovery. Did India witness it?

5.1 AATMA NIRBHAR BHARAT ABHIYAN (SELF – RELIANT INDIA MOVEMENT)

CONCERNS REGARDING STIMULUS

6 PREVIOUS YEAR QUESTIONS (2013-2021)

SOME EXPECTED QUESTIONS FOR 2022/23

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