Economics Mains Sample Answer (2022-2021)

Economics
Mains Exam (2022-2021)

Sample Answer
– By Basava Uppin Sir (Rau’s IAS)
Question The Sample Answers have been constructed to train students about how to
No. write relevant and succinct answers in exam condition.
2022
1. Why is Public Private Partnership (PPP) required in infrastructural 10
projects? Examine the role of PPP model in the redevelopment of
Railway Stations in India. (50 Words)
 Introduction: Need for Infrastructure

 Body:
o Need for PPP in Infrastructure
o PPP in Railway Station Redevelopment- Benefits
 Conclusion: Need to address challenges based upon Kelkar Committee
recommendations.
The Government has taken initiatives such as NIP, Gati Shakti, NMP etc. to
leverage infrastructure as a weapon against the present economic
slowdown.
Need for PPP
Finance Investment Gap: India needs to spend about $1.4 trillion to

become $ 5 trillion economy. (Eco Survey 2021-22)
Reduce financial burden as the share of Public Investment on

infrastructure is quite high at 70%.
Harness private sector expertise Ex: OMDA model in Airports.
Basava Sir’s Notes 1

Equitable sharing of risks Ex: Mumbai Metro
Enhanced customer satisfaction Ex: Bhiwandi Franchise model for

DISCOM.
Asset Recycling Ex: NMP
Railway Station Redevelopment Project plans to redevelop 400

stations across 100 cities.
Benefit Railways:
 Upfront payment through long term lease and share of annual

revenue of private partner
 Ownership of Stations at the end of lease period.
World class passenger amenities such as multi-modal connectivity,

kiosks, escalators, executive lounges Ex: Habibganj - India’s first PPP
Railway station
Replicate successful models of Airport development Ex: Delhi’s T3

terminal
Efficient utilisation of land leading to transit oriented development Ex:

Gandhinagar Railway Station.
Going forward, recommendations of Kelkar Committee must be adopted

to address challenges such as absence of independent regulator, lack
of coordination, delays in clearances etc. to reap full benefit of PPP.

2. Is inclusive growth possible under market economy? State the 10

significance of financial inclusion in achieving economic growth in
India. (150 Marks)
According to UNDP, Inclusive growth refers to the process and the

outcome where all groups of people have participated in growth and
have benefited equitably from it.
Inclusive growth may be possible under market economy due to:
Increase in GDP Size due to competition, innovation, and higher

efficiency by private sector.
Trickle-down effect in terms of creation of Jobs and increase in income

levels.
Increase in Tax-GDP ratio enables Government to fund welfare

programmes.
Indicative planning adopted post 1991 reforms focusses on achieving

inclusive growth.
Empirical evidence:
 Decline in BPL population from 37% (2004-05) to 22% (2011-12)
 Liberalisation of Telecom and Aviation sector
However, Inclusive Growth and Market Economy may prove to be

contradictory due to:
Limited focus of Private sector in delivery of Public Goods and

Services such as Education, Health, Sanitation, Housing, Skills etc.
Neglect of Rural and underdeveloped regions by private sector fosters

regional disparities.
Exploitation of labour leads to concentration of wealth in hands of

richer class.
Absence of subsidised prices affects poor and vulnerable sections.
Limited Government role goes against the social welfare objective.

Empirical evidence:
 US’s Gini Co-efficient higher than India.
 Privatisation of PSBs would hurt inclusive growth (RBI’s Study)
Financial Inclusion refers to universal access to financial services such as

Banking, Insurance, Pension at a reasonable cost. Seven of the UN SDGs
view financial inclusion as a key enabler for achieving sustainable
development.
Enable shift from consumption-led to Investment-led economy

through mobilisation of savings (Eco Survey 2018-19)
Reducing poverty and vulnerabilities Ex: Jan Dhan Yojana, PSL, Atal
Pension, PM JAY etc.
Promote gender equality through entrepreneurship Ex: Stand Up India
Multiplier effects: Increase in credit leads to higher investment and

consumption expenditure leading to increased demand for Goods and
job creation.
Long term funds mobilised through insurance and pension can be

channelised towards infrastructure funding.
Facilitate development of financial sector such as Banks, Insurance

and Pension companies.
Going forward, causes of financial exclusion such as lack of Financial

Literacy, Dominance of Bank Branches in Urban Areas, Poor quality
of services etc. need to be addressed to improve financial inclusion and
promote development.

3. What are the major challenges of Public Distribution System (PDS) in 10

India? How can it be made effective and transparent? (150 Words)
 Introduction: Brief overview of PDS

 Body: Challenges and strategies needed
 Conclusion: Implications
The Public Distribution system (PDS) includes procurement, storage,

transportation and distribution of food grains at subsidised prices to
implement National Food security Act.
Strategies (Shanta Kumar Committee, Eco

Challenges Survey 2020-21, SC Committee on Farm
Laws)
Open ended procurement has  Adopt closed ended procurement policy
led to surplus buffer stocks  Liquidate surplus buffer stocks through
(almost twice the requirements) open market sales by FCI.
and hindered agricultural
diversification.
Diversion of food grains during  GPS enabled tracking of Trucks (Delhi)
transportation.  Yellow coloured PDS trucks (Chhattisgarh)
Inadequate storage capacity  Increase storage capacity through PPP

leading to rotting of grains  Provide 6 months ration immediately after
procurement season.
Distribution: Inclusion and  End-to-End Computerisation (Chhattisgarh)

exclusion errors, Leakages (46%),  Seeding Aadhaar with ration cards
Lack of choice of food grains,  DBT for food subsidy (Chandigarh)
Nutritional insecurity etc.  One Nation One Ration Card
 Food Fortification
Unsustainable Food Subsidy Bill  Reduce Coverage from 67% of population to

(around Rs 2 lakh crores) 40%
 Pricing of Food grains for priority
households should be linked to MSP
 Central Issue Price (CIP) should be revised
upwards
The above strategies would bring about reforms leading to twin objectives of –
Financial sustainability and enhanced food security through PDS.

4. Elaborate the scope and significance of the food processing industry 10

in India. (150 Words)
 Introduction: Present Status of Food Processing Sector

 Body:
o Scope
o Significance
 Conclusion: Strategies to reap full potential of sector.
Food processing is a sunrise sector accounting for 11% of GVA in

agriculture and 10% of GVA in manufacturing. With total size of 2.24
lakh crores, it has registered average annual growth of 10% as
compared to 3% in agriculture.
Scope for growth of Food processing
Demand Side Supply Side
 Nuclear families  Largest producer of Food grains

 Organised retail  2nd largest producer of Fruits
 Rise in disposable incomes and vegetables
 Increasing urbanisation  Largest livestock population
The sector has huge significance as it provides vital synergies between the
two pillars, i.e., agriculture and industry.

Promote agricultural diversification by increasing demand for raw

materials Ex: Patanjali
Double Farmers' income by establishing backward linkages Ex: Suguna

Foods
Reduce Post-harvest losses (Rs 92,000 crores) through cold chain

infrastructure.
Boost Agricultural exports by increasing share of processed food in

export basket (16%)
Address nutritional insecurity through Food Fortification
Benefit consumers through better quality taste, more choices etc. Ex:
Zespri
Control food inflation by increasing shelf-life.
Promote inclusive growth through secondary agriculture and job

creation.
To realise full potential of this sector, challenges such as dominance of

informal sector, poor infrastructure, lack of skilled workforce,
supply chain constraints need to be addressed through PM Kisan
Sampada, PMFME, PLI.

5. The increase in life expectancy in the country has led to newer health 10
challenges in the community. What are those challenges and what
steps need to be taken to meet them? (150 Words)
 Introduction: Demographic Transition in India

 Body:
o Healthcare challenges
o Steps needed
 Conclusion: Development of Silver Economy: Win-Win Situation
The increase in life expectancy (from 60 in 1990 to 70 in 2019) is set to

double share of senior citizens from 8% (2011) to 16% (2040). This
demographic watershed creates an imperative to redesign our
healthcare policies.
Healthcare challenges (Longitudinal Ageing Study of India)
Epidemiologic transition: Waning of infectious diseases and emergence

of chronic diseases.
Age-related disabilities (40%) such as dementia, hearing and vision loss

etc.
Mental health issues (20%) due to loneliness.
Absence of dedicated ward for elders.
Higher focus on women and child health and neglect of geriatric care.
Only 18% of elders covered under insurance programmes.

Steps needed
Enhance Public Expenditure to provide for Preventive, curative,

restorative and rehabilitative services through Tiered geriatric healthcare
 Strengthen Health and Wellness Centres at Village level
 Dedicated wards at district level
 National and regional institutes of Ageing
Focus on Silver Economy:
 Geriatric healthcare and products Ex: Rashtriya Vayoshri Yojana
 Start-ups: Incentives for developing aged-care products Ex: SAGE

Portal.
 IT Sector: Home automation, Telemedicine, Database Management
Enhance insurance coverage under Ayushman Bharat.
Increase awareness and early detection of diseases.
Encourage PPP through NGOs
The 21st century demography demands a new outlook of aging

population as drivers of GDP. Hence, above strategies can lead to win-
win situation and help us become $ 5 trillion economy.

6. “Economic growth in the recent past has been led by increase in 15

labour productivity.” Explain this statement. Suggest the growth
pattern that will lead to creation of more jobs without compromising
labour productivity. (250 Words)
The paradoxical relationship between higher GDP growth rate and low
employment elasticity (0.1) clearly highlights jobless growth in India. It
shows that the higher GDP growth rate has been led by increase in labour
productivity.
The labour productivity is measured as output of Goods and Services per

worker. According to RBI’s KLEMS database, Labour productivity has
increased post 1991 reforms due to capital deepening (higher capital
per worker), improvement in technology, improvement in quality of
labour etc.
Agriculture: The decline in share of workforce from 58% to 45% in last

decade has not led to decline in share of agricultural sector to India’s GDP
(around 17%).
Structural transformation: Post-1991 reforms, share of manufacturing

sector to India’s GDP (17%) and Employment (12%) has remained
stagnant. While the share of services sector to India’s GDP has increased
to 55%.
Focus on capital intensive industries due to complexity in labour laws

and availability of cheaper credit through Government’s incentives.
Increased productivity in Rural India: The contribution of rural areas to

manufacturing output has doubled from 25% (1970-71) to 50% (2011-12).

However, between 2005-12, the rural India witnessed negative

employment growth rate of -2.8%
Strategies needed:
 Promotion of secondary Agriculture to boost non-farm

employment.
 Focus on Labour Intensive Industries such as Textile and Leather
 Incentivizing ‘infant’ MSME firms rather than dwarf firms wherein

incentives should be limited to initial 5-7 years only. (Eco Survey 2019-
20)
 Change in Orientation of SEZs as 3 E’s- Employment and Economic

Enclaves to boost employment creation.(Baba Kalyani Committee)
 Integrate “Assemble in India for the world” into Make in India to

create 4 crore well-paid jobs by 2025 (Eco Survey 2018-19)
 Effective Implementation of Labour Reforms
The above strategies would enable India to create more jobs and reap
demographic dividend. At the same time, they do not adversely affect
labour productivity and hence enable India to become $ trillion economy.

7. Do you think India will meet 50 percent of its energy needs from 15
renewable energy by 2030? Justify your answer. How will the shift of
subsidies from fossil fuels to renewables help achieve the above
objective? Explain. (250 Words)
With installed capacity of around 1.5 lakh MW (40%), India stands 4th in
renewable energy capacity , 4th in Wind Energy and 5th in Solar Energy.
Initiatives such as National Solar Mission, PM-KUSUM Scheme, PLI
Scheme, RPO etc. have led to 250% Increase in installed capacity
between 2014 to 2021.
Government has announced increasing installed capacity to 500 GW

and meeting 50% of energy requirements from renewables by 2030.
However, meeting these ambitious targets implies average annual
deployment of 25 GW of solar and 11 GW of wind which is challenging
due to
Common Issues:
 Variability in Electricity generation makes grid integration difficult.
 Inadequate power storage infrastructure
 Location specific potential makes power evacuation difficult Ex: Ladakh
 Replacement of Feed-in-tariff with Reverse auction has made projects

unviable.
 Poor financial position of Banks
 Withdrawal of concession on open access charges by states
Issues specific to Solar Energy:
 Higher import dependency (78%) on solar modules
 Higher customs duty (40%) on Solar modules
 Limited progress on Roof Top Solar
Issues specific to Wind Energy:
 Slowdown in Wind Energy capacity addition.

 Limited progress in harnessing Wind Energy in states such as MP,

Rajasthan
 Lack of focus on off shore wind energy projects
Trends in Subsidies in Energy Sector
According to CEEW Report, Government spent almost nine times more

on subsidies for fossil fuels than for clean energy. On the other hand,
Clean energy subsidies have reduced by 59% since 2014.
Higher subsidies for clean energy would attract more private

investment, boost power storage infrastructure, encourage
domestic production of solar modules, optimally utilise renewable
energy in resource rich states and thus enable us to meet the target of
50% energy requirements.
Hence, subsidies for fossil fuels should be phased out gradually and
subsidies for clean energy should increase. The National Electricity
Council should be set up to lead dialogue between centre and states on
electricity subsidy reform.

8. What are the main bottlenecks in upstream and downstream process 15

of marketing of agricultural products in India? (250 Words)
 Introduction: Meaning and importance of Agricultural marketing.

 Body:
o Define upstream and downstream activities
o Bottlenecks in upstream and downstream marketing
 Conclusion: Strategies needed to address challenges
Agricultural marketing refers to movement of agricultural produce from

farm land to the end-consumers. A well-developed agriculture market can
streamline supply chain, eliminate intermediaries, reduce post-harvest
losses and double farmers’ income.
However, the post-production activities of Indian agriculture have not

kept pace with the production related activities. The agriculture marketing
infrastructure continues to remain out-dated and suffer from various
bottlenecks.
Upstream bottlenecks
Restrictive, Fragmented, Pro-Trader and Anti-Farmer APMC Regime
 Lack of freedom to farmers to sell wherever and whomsoever.
 Farm produce should be sold only at regulated markets through

registered intermediaries.
 Lack of efficient price discovery due to cartelisation by traders.
 Imposition of multiple fees and cesses.
 Lower price realisation for farmers

Lack of Access to Markets: An average APMC serves an area of 450

sq.km as against recommendation of 80 sq.km given by M.S.
Swaminathan Committee.
Limited participation of private sector in procurement and storage due

to EC Act, 1955.
Absence of legal framework to facilitate contract farming.
Limited penetration of E-NAM (only 14% of APMCs)
Downstream bottlenecks
Absence of “Inverse Fork-to-Farm approach” has led to demand-supply

mismatch in agricultural commodities.
Under-developed logistics such as transportation and cold chain has led

to higher post-harvest losses (Rs 92,000 crores) and rising food inflation.
Domination of Unorganised retail (98%) has led to fragmented and

inefficient supply chain.
Limited processing of commodities (10%)
Limited growth of private labelling has affected quality of commodities.
Going forward, recommendations of Dalwai Panel and SC appointed

committee on farm laws such as bringing agricultural marketing
under concurrent list, High-level agricultural marketing council,
giving freedom to farmers, promotion of contract farming, reviving
repealed farm laws with more flexibility to the states etc. need to be
implemented.

9. What is Integrated Farming System? How is it helpful to small and 15

marginal farmers in India? (250 Words)
 Introduction: Meaning and Components of Integrated Farming System (IFS).

 Body: Benefits of IFS for small and marginal farmers.
 Conclusion: Need to implement NMSA to address challenges.
Integrated farming system (IFS) is the scientific integration of

interdependent farm activities such as crops, livestock, fish, poultry,
honey bee, agro forestry for the efficient use of inputs and higher
productivity. It is based on the concept that waste from one component
becomes an input for another part of the system.
The Indian agriculture is dominated by small and marginal farmers who

account for 86% of farmers and own 48% of agricultural land. The IFS can
enable these farmers to break out of the vicious cycle.
Reduce Input cost through efficient utilisation of wastes.
 Crop residues can be used as animal feed and hence avoid fodder
crisis.
 Animal excreta can also utilized as organic fertilizers.
 Biogas production can meet household energy requirement and

hence reduce energy crisis.

Enhanced productivity through efficient utilisation of fragmented land

holdings. It can lead to agricultural diversification and intensification of
crop and allied enterprises.
Promotes environmental sustainability
 Reduced need for chemical fertiliser
 Minimise use of insecticides and pesticides through integrated pest

management.
 Improved soil fertility through crop rotation and organic fertilisers.
 Recycling of wastes for production helps to avoid piling of wastes and

consequent pollution.
Stable and regular income throughout the year due to integration of

different allied activities such as crops, milk, eggs, honey etc.
Adoption of Technology: Increased income level may incentivise farmers

to adopt modern technologies and mechanisation.
Boost Secondary agriculture leading to higher value addition and

increased income levels.
Hence, IFS would help us achieve multi-faceted objectives - doubling

farmers’ income, ensure food security and promote environmental
sustainability. Going forward, National Mission on Sustainable
Agriculture should be implemented efficiently to address challenges
such as lack of awareness, lack of credit, poor adoption of technology etc.

2021
1. Explain the difference between computing methodology of India’s 10
Gross Domestic Product (GDP) before the year 2015 and after the
year 2015. (150 words)
 Introduction: Rationale behind changes in computing Methodology.

 Body:
o Important Changes after 2015.
o Recent controversy over GDP estimation.
 Conclusion: Way forward.
In 2015, the Central Statistical Office (CSO) made changes to computing

methodology of GDP based upon recommendations of K Sundaram
Committee. This has brought India’s methodology in line with
international standards of System of National Accounting 2008.
Important Changes:
Change in the base year from 2004-2005 to 2011-2012.
Change in Default GDP from the GDP at Factor Cost to GDP at Market
Prices.
Change in GDP methodology:
 Sector wise estimates using GVA at Basic Prices i.e., GDP at Factor
Cost + Production Taxes – Production Subsidies.
 Calculation of GDP: GVA at basic prices + Product Taxes – Product

subsidies.
Change in database from Annual Survey of Industries (ASI) to MCA-21

database of Ministry of Corporate affairs
Improved coverage of financial corporations through information

provided by SEBI, PFRDA, IRDA etc.
Some economists have highlighted that these changes have inflated GDP
numbers by around 2.5% on account of – Change in default GDP,

Presence of shell firms(38%) in MCA database etc. However, Eco

Survey 2018-19 has highlighted that these concerns are unfounded.
The credibility of economy depends upon ability to come out with fool-
proof and indisputable GDP estimates. Hence, recommendations of
Pronab Sen committee should be taken into consideration in future.

2. Distinguish between Capital Budget and Revenue Budget. Explain the 10

components of both these Budgets. (150 words)
 Introduction: Constitutional Provisions behind Budget.

 Body:
o Broad difference between Revenue and Capital Budget.
o Components of Budget.
 Conclusion: Importance of Budget.
Article 112 of Constitution requires the Government to present Annual

Financial Statement (AFS) before the Parliament every financial year. The
AFS should distinguish the expenditure on revenue account from other
expenditures.
Revenue Budget includes Current Receipts and expenditure that can be

met from these receipts. On the other hand, Capital Budget includes
Assets and Liabilities.
Criteria Revenue Budget Capital Budget
Receipts Non-redeemable receipts Receipts which create

liability or reduce financial
assets.
Examples of Tax Revenue (Direct and Debt Receipts: Market

Receipts Indirect Taxes): GST, Income Borrowings.
Tax, Corporate Tax, Excise Non-Debt Receipts:
Duty, Customs duty (In Disinvestment, Recovery
Declining Order) of Loans
Non-Tax Revenue: Interest
Receipts, Dividends and
Profits of PSUs, User Charges,
External Grants etc.
Expenditure Recurring: Incurred for Non-Recurring: Incurred

purposes other than creation for Asset creation
of Assets

Examples of Interest Payments, Subsidies, Creation of Roads,

Expenditure Salaries and Pensions, railways etc. and loans to
Defence, Grants to the States States.
for creation of Assets etc.
The budget is not merely a statement of receipts and expenditures, but

also a tool to promote economic development. For example, in last 2-3
years, there has been much focus on capital Budget to revive Indian
economy.

3. How did land reforms in some parts of the country help to improve 10
the socio-economic conditions of marginal and small farmers?
(150 words)
 Introduction: Poor Socio-economic condition of Marginal and Small farmers.

 Body: Impact of Land Reforms on Marginal and Small Farmers
o Improvement in Socio-Economic Condition
o Reasons for Limited Impact
 Conclusion: Need for Land Reforms 2.0
Indian agriculture is dominated by small and marginal farmers (86%)

accounting for 48% of agricultural land. These farmers are caught in
vicious trap due to fragmented landholdings.
Successful Land Reforms in states such as Kerala and West Bengal

(Operation Barga) have improved socio-economic condition of marginal
and small farmers:
 Abolition of intermediaries has addressed historical injustices and

move towards egalitarian society.
 Land Ceiling Acts and movements such as Bhoodan and Gramdan

have promoted equity in land ownership.

 Tenancy reforms in states such as TN, AP, WB etc. have enabled

marginal farmers to lease in/out land leading to consolidation of land
holdings, higher occupational mobility and enhanced agricultural
productivity.
 Promotion of Cooperative farming through Kudumbashree (Kerala)

and Andhra Pradesh Mahila Samatha Society have enabled farmers
to reap benefits of higher economies of scale.
 Land Records Modernization Programme has reduced litigations and

facilitated access to institutional credit.
Land Reforms in other parts of India have not been very successful on
account of Benami Transactions, loopholes in Land ceiling acts, slow
progress in Digitisation of land records etc.
Hence, going forward, India should focus on Land Reforms 2.0 through
transfer of surplus government land, legalising land Leasing,
organising farmers into FPOs etc.

4. How and to what extent would micro-irrigation help in solving India’s 10

water crisis? (150 words)
 Introduction: Highlight about present Water Crisis and link it to Agriculture.

 Body:
o How Micro-Irrigation can help in solving water crisis?
o Why Micro-Irrigation has limited scope in solving water crisis?
 Conclusion: Strategies to solve water crisis in India.
According to NITI Aayog's Composite Water Management Index (CMWI),

India is facing worst water crisis in its history. This underscores the need
for enhanced water use efficiency in agriculture which accounts for 85%
of water.
Micro irrigation (MI) (sprinkler, drip) promotes precision farming by

making water available to root zone of crops and hence lead to 40%
Water Savings and 50% increase in income (Dalwai Panel).
MI can solve water crisis in following ways:
 Integration of MI with Canal irrigation can enhance India’s irrigation

efficiency (38%) and bring it on par with developed countries (60%).
 Replace Flood irrigation method and reduce over-usage of

Groundwater.
 Integration of MI with rainwater harvesting can promote climate

resilient agriculture.

 MI for water intensive crops can reduce water consumption by 70%.
Initiatives such as “Per Drop, More Crop”, Micro Irrigation fund etc.
have been launched. However, MI may have limited scope:
 Lower Area under MI (10 Mha) against potential of 70 Mha
• Highly subsidized canal water and electricity
• Poor affordability of small and marginal farmers (83%)
Going forward, MI has to be supported by - Separation of feeder lines,

rationalisation of water tariffs, changes in cropping pattern,
regulation of ground water etc. to solve India’s water crisis.

5. What are the salient features of the National Food Security Act, 2013? 10
How has the Food Security Bill helped in eliminating hunger and
malnutrition in India? (150 words)
 Introduction: Rationale and Significance of NFSA.

 Body:
o Salient Features of NFSA
o To what extent NFSA has helped in eliminating hunger and malnutrition?
 Conclusion: Need to address current challenges in NFSA.
The National Food Security Act (NFSA), 2013 provides food and nutritional
security by ensuring access to adequate quantity of quality food at
affordable prices. Thus, it strengthens Article 21 enshrined in
Constitution.
NFSA Act, 2013: Salient Features
Coverage: Up to 75% of rural population and 50% of urban population

(67% of total population)
Entitlement:
 Priority households: 5 kg/person/month
 Antyodaya households: 35 kg/household/month
Subsidised prices of Rs. 3/2/1 per kg for rice, wheat and coarse grains.
Nutritional Support: Meals for Pregnant women and lactating mothers

(PWLM) and children (6 months-14 years).
Maternity Benefit of Rs 6000 for PMLM.
Women Empowerment : Eldest woman (18 years and above) considered

as head of household for issuing ration cards.
Grievance redressal at the District and State levels.
Accountability through social audits and Vigilance Committees.
Food Security Allowance in case of non-supply of food.

Role of NFSA in eliminating hunger and Malnutrition
Improved Coverage (67%) in comparison to TPDS. Out of maximum

coverage of 81.34 crores, 80 crore people covered so far.
Improved outcomes:
 Undernourishment reduced from 22% to 15% in last decade (FAO’s

“State of Food Security and Nutritional 2021”)
 Percentage of stunted children reduced from 38% (NFHS-4) to 35%

(NFHS-5)
Paradigm Shift from welfare to rights-based approach.
Life-cycle approach by guaranteeing access throughout the life cycle

beginning from pregnancy to old age.
Addresses 3 dimensions of Food security- Availability, Accessibility and

Affordability.
However, NFSA still faces number of challenges as evident in India’s lower

ranking (101) on GHI, Global Food Security Index:
The NFSA has the potential to be a game changer. However, the

Government must implement recommendations of committees such as
Shanta Kumar, Nandan Nilekani etc. to streamline distribution and
make it more efficient.

6. What are the present challenges before crop diversification? How do 15

emerging technologies provide an opportunity for crop
diversification? (250 words)
 Introduction: Crop Diversification- Meaning and Significance.

 Body:
o Present Status of Crop Diversification.
o Reasons for poor status of Crop Diversification.
o Role of Emerging Technologies in Crop Diversification.
 Conclusion: Way Forward.
Crop diversification refers to growing of more than one crop in the

agricultural land such that it leads to shift in the cropping pattern at an all
India level. Crop diversification can address hidden hunger, reduce
inflation, promote sustainable practices and double farmers' income.
Post Green Revolution, the Cropping pattern has come to be dominated

by Rice and Wheat (38%) leading to monoculture farming. India's food
grain basket (300 MT) is dominated by Rice and Wheat (225 MT). More
than one crop is grown on less than 50% of area.
Challenges in Crop Diversification
Input related factors:
 Fragmented landholdings (86%- Small and Marginal Farmers)
 Absence of Irrigation Facilities (53%-Rainfed Farming)
 Low Seed replacement rate
 Poor access to Credit
 Capital Intensive (Horticulture)

Production related factors:
 Low yields of Pulses, Oilseeds etc.
 Low Cropping Intensity
Marketing related factors:
 Guaranteed procurement of Rice and Wheat under MSP.
 Restrictive APMC Regime
 Price volatility (Cobweb Phenomenon in Pulses)
 Restrictive export policies (Minimum Export Price, Export Bans etc.)
The emerging Technologies can help in promoting Crop Diversification

through:
Biotechnology: Development of high yielding and pest resistant crop

varieties.
ICT: Access to credit, agricultural machineries (CHC App), advisory

services (KISAN Suvidha App), send price signals (AGMARKNET),
reduce post-harvest losses and ensure higher market prices (e-NAM).
Precision Farming: AI, remote sensing, GPS, Micro-irrigation etc. can

enhance input use efficiency and ensure higher productivity (Example-AI
Sowing App, Simply fresh)
Accurate Weather forecasting based on Big Data and AI can reduce

vulnerability to climate change.
Smart Drones: Real time monitoring of crop health.
Soil Sensors: Fine tune irrigation practices.
Thus, going forward, we need to focus on these emerging technologies to

make agriculture more industrialised, usher in constructive disruption
and promote crop diversification. (Dalwai Panel)

7. Do you agree that the Indian economy has recently experienced V- 15

shaped recovery? Give reasons in support of your answer.
(250 words)
 Introduction: Define V-Shaped Recovery; Introduce the recent debate.

 Body:
o Evidences in support of V-Shaped Recovery.
o Evidences against V-Shaped Recovery.
 Conclusion: V-Shaped recovery only in short run. Need to focus on medium
and long term recovery.
V-Shaped economic recovery can be defined as "Economy that has

suffered a sharp economic decline experiences a fast and strong
rebound". The GDP which had contracted to -7.5% (2020-21) is expected
to rebound to 9.5% (2021-22) reviving hopes of V-shaped recovery.
However, economists have highlighted that economy has not recovered
completely.
Evidences in support of V-Shaped Economic Recovery (Eco Survey

2019-20)
Lifting of lockdown and vaccination has eased restrictions leading to

pent-up demand expenditure and economic revival.

Stimulus Measures: Aatma Nirbhar Bharat (20 Lakh crores, 10% of GDP),
Counter cyclical fiscal policy etc. have led to increase in Government's
expenditure and can crowd-in investment.
Liquidity Measures: RBI's unconventional tools such as TLRTOs,

Operation Twist, G-SAP etc. can improve credit-GDP ratio.
Improvement in high frequency indicators such as IIP, power

consumption, e-way bill etc.
Evidences against V-Shaped economic Recovery
Low Base effect: Higher GDP growth due to low-base effect.
U-Shaped or W-Shaped economic recovery:
 Short run economic revival due to lifting of lockdown. However, concerns still
remain over continued growth momentum.
 Major drivers of Indian economy- Consumption expenditure and Investment

still below pre-covid level due to emergence of new variants, loss of jobs and
poor investor sentiments.
 Limited scope for Government and RBI to provide stimulus due to rising
fiscal deficit and debt, higher inflation etc.
K-Shaped economic recovery:

 Uneven recovery of different sectors: IT and Services (Revival); Real estate,
Travel, Hospitality (poor recovery)
 Disparities in Revival of formal and Informal sector.
 Growing Income inequalities (Oxfam International)
Undoubtedly, India has registered V-Shaped recovery in the short run.

However, it may face difficulty in continuing with the same momentum in
registering high GDP growth rate in medium and long run. The
Government should continue to focus on faster recovery through creation
of infrastructure, jobs etc. to become $ 5 trillion economy.

8. “Investment in infrastructure is essential for more rapid and 15

inclusive economic growth”. Discuss in the light of India’s experience.
(250 words)
Infrastructure sector is a key determinant of economic growth and

development of a country. Countries across the world have used
infrastructure as a weapon to escape from the vicious cycle of poverty
and underdevelopment.
Infrastructure can address various constraints in achieving Inclusive

growth:
Local Multiplier effects: Capital expenditure multiplier is around 2.45

and hence it would revive both demand and supply leading to expeditious
economic recovery and employment opportunities.
Double Farmers’ Income by integrating rural economy with rest of India.

Such integration would reduce post- harvest losses, streamline agriculture
supply chain, ensure success of E-NAM etc.
Reduce Logistics cost from 12-14% of India’ GDP to global benchmark

of 8-10% and enhance the manufacturing competitiveness, boost exports
and ensure Aatma Nirbhar Bharat.

Provide multi-modal connectivity to Economic Zones like MSME

clusters, SEZs etc.
Rural Transformation through greater integration of rural economy with

urban economy. For example, 10% increase in broadband penetration
can lead to 1% increase in the GDP.
Other benefits: Employment creation, environmental conservation,

disaster resilient infrastructure.
However, despite these benefits, India has failed to optimally leverage

Infrastructure sector:
Time and Cost overruns: One out of every five infrastructure projects
have a delay of over five years leading to cost escalation of Rs 4.5 lakh
crores in 2019-20 (MoSPI Report)
Lack of Coordination between different Ministries/ Departments.
Financing:
• Asset-Liability Mismatch for Banks and NBFCs
• Underdeveloped Corporate Bond Market
• Poor implementation of PPP projects as identified by Vijay Kelkar

Committee.
Infrastructure lies at the core of India’s ability to realise number of SDGs

both directly and indirectly. Hence, going forward, various initiatives such
as NIP, Gati Shakti, NMP, NaBFID etc. need to be implemented
efficiently to lay down strong foundation of Aatma Nirbhar Bharat.

Economics Mains Sample Answer (2022-2021)

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Economics Mains Sample Answer (2022-2021)

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Economics

Mains Exam (2022-2021)

 Introduction: Need for Infrastructure

Need for PPP

Finance Investment Gap: India needs to spend about $1.4 trillion to

Reduce financial burden as the share of Public Investment on

Harness private sector expertise Ex: OMDA model in Airports.

Basava Sir’s Notes 1

Equitable sharing of risks Ex: Mumbai Metro

Enhanced customer satisfaction Ex: Bhiwandi Franchise model for

Asset Recycling Ex: NMP

Railway Station Redevelopment Project plans to redevelop 400

 Upfront payment through long term lease and share of annual

 Ownership of Stations at the end of lease period.

World class passenger amenities such as multi-modal connectivity,

Replicate successful models of Airport development Ex: Delhi’s T3

Efficient utilisation of land leading to transit oriented development Ex:

Going forward, recommendations of Kelkar Committee must be adopted

Basava Sir’s Notes 2

2. Is inclusive growth possible under market economy? State the 10

According to UNDP, Inclusive growth refers to the process and the

Inclusive growth may be possible under market economy due to:

Increase in GDP Size due to competition, innovation, and higher

Trickle-down effect in terms of creation of Jobs and increase in income

Increase in Tax-GDP ratio enables Government to fund welfare

Indicative planning adopted post 1991 reforms focusses on achieving

 Decline in BPL population from 37% (2004-05) to 22% (2011-12)

 Liberalisation of Telecom and Aviation sector

However, Inclusive Growth and Market Economy may prove to be

Limited focus of Private sector in delivery of Public Goods and

Neglect of Rural and underdeveloped regions by private sector fosters

Exploitation of labour leads to concentration of wealth in hands of

Absence of subsidised prices affects poor and vulnerable sections.

Limited Government role goes against the social welfare objective.

Basava Sir’s Notes 3

 US’s Gini Co-efficient higher than India.

 Privatisation of PSBs would hurt inclusive growth (RBI’s Study)

Financial Inclusion refers to universal access to financial services such as

Enable shift from consumption-led to Investment-led economy

Promote gender equality through entrepreneurship Ex: Stand Up India

Multiplier effects: Increase in credit leads to higher investment and

Long term funds mobilised through insurance and pension can be

Facilitate development of financial sector such as Banks, Insurance

Going forward, causes of financial exclusion such as lack of Financial

Basava Sir’s Notes 4

3. What are the major challenges of Public Distribution System (PDS) in 10

 Introduction: Brief overview of PDS

The Public Distribution system (PDS) includes procurement, storage,

Strategies (Shanta Kumar Committee, Eco

Inadequate storage capacity  Increase storage capacity through PPP

Distribution: Inclusion and  End-to-End Computerisation (Chhattisgarh)

Unsustainable Food Subsidy Bill  Reduce Coverage from 67% of population to

Basava Sir’s Notes 5

4. Elaborate the scope and significance of the food processing industry 10

 Introduction: Present Status of Food Processing Sector

Food processing is a sunrise sector accounting for 11% of GVA in

Scope for growth of Food processing

Demand Side Supply Side

 Nuclear families  Largest producer of Food grains

Basava Sir’s Notes 6

Promote agricultural diversification by increasing demand for raw

Double Farmers' income by establishing backward linkages Ex: Suguna

Reduce Post-harvest losses (Rs 92,000 crores) through cold chain

Boost Agricultural exports by increasing share of processed food in