mgp cc - economics Flashcards

Question

#2 How did the PDS system evolved?

Answer 1

1. Started around world war 2 as war time rationing measure. 2. Befor 1960s → dependent upon imported food grains 3. 1960s → Green revolution + FCI established to procure + store food grains 4. 1970s → universal scheme for distribution of subsidised food 5. 1990s → TPDS → beneficiaries = a) households BPL b) households APL 6. 2000 → Antyodya anna yojna (AAY) for poorest of the poor families 7. 2013 → NFSA 2013 → legal right for 67% of the population to have subsidised food grains.

Answer 2

1. The centre (FCI) procures food grains from farmers at MSP → sells it to states at central issue prices and transports the grains to sate godowns. 2. States transport t grains from godowns → fair price shop (ration shop) → beneficiary buys the food grains. Many states further subsidise the price of food grains before selling it to beneficiaries.

Answer 3

1. Ensures Food and Nutritional Security + make food available to the poor at affordable prices. 2. Stablises food prices →maintains the buffer stock of food →flow of food remain active even during the period of less agricultural food production. 3. Redistribution of grains from food surplus regions → deficient regions. 4. MSP → increase in food grain production + assuring income to farmers. 5. Extreme situation like covid + migrant crisis → PDS stands as a guarantee for social security

Answer 4

1. Identification of beneficiaries → large inclusion – exclusion errors + Beneficiaries (in many states) can register in their home states only → migrant workers discriminated. 2. Huge burden on exchequer + NFHS 5 → high hunger, stunting and wasting rates prevailing. 3. Huge wastages + leakages + corruption + hoarding and black marketing 4. Open ended procurement → shortages in market → inflation 5. MSP → discourages crop diversification + increases individual and regional inequalities 6. Govt intervention → private players discouraged → lack of innovation in the sector. 7. WTO issues → de minimus clause.

Answer 5

1. Diversification of food basket 2. Leveraging technology → online tracking system, end to end computerisation, digitisation of ration cards. 3. Direct cash transfers → enhance dietary diversity + reduce leakages + reduce transportation cost for govt. (Economic survey 2016-17 highlighted the need for more caution and better infrastructure while replacing subsidised PDS supplies with DBT.) 4. Shanta Kumar recommendations → decentralised procurement, 40% coverage under NFSA 2013, outsourcing storage and enhancing infrastructure. 5. Encouraging social auditing to ensure accountability Case study → BRAZIL'S bolsa familia programme where govt transfers the cash directly to the family subject to conditions such as school attendance, nutritional monitoring, pre and post natal tests etc → 15 %poverty reduced and helped brazil to attain its MDG.

Answer 6

1. F.A.O → all people, at all times, have physical, social, and economic access to sufficient, safe, and nutritious food that meets their food preferences and dietary needs for an active and healthy life. 2. Elements of food security → a) availability (having sufficient quantities of appropriate food available) b) accessibility (having adequate income or other resources to access food) c) utilisation/consumption (having adequate dietary intake and the ability to absorb and use nutrients in the body). 3. Components of food security system in India → a) Buffer stock and b) PDS.

Answer 7

1. 1950s → State Government begin enacting their APMC Acts to 'protect' farmers. But it fails to curb the nuisance of middlemen, hoarding and inflation. 2. 1960s → Green revolution + FCI made + MSP started for wheat and rice. 3. 1970s → white revolution. 4. 1980s → CACP to recommend MSP for several crops based on certain economic criteria, FARP started for sugar. 5. 1990s → Decentralised procurement (states will procure) + TPDS launched + Mid-day meal scheme. 6. 2000s → Antyodaya anna yojana → focus on poorest of the poor + National food security mission. 7. 2013 → NFSA → legal guarantee to provide subsidised food grains to around 67% population. 8. Latest initiatives → ONORC, biofortification, fat tax, Rashtriya Krishi Vikas Yojana, National nutrition mission and national nutrition strategy.

Answer 8

1. India → share 25% of the world hunger burden + largest number (200 mn) of under nourished people. 2. India going through double burden of disease → undernourishment not reduced + over nourishment increasing. 3. NFHS-5 → malnutrition + stunting + wasting → increased. 4. 4/10 children not meeting their human potential because of chronic under nutrition.

Answer 9

1. Reduced land and agriculture productivity → a) diversion of land for infrastructure and biofuels b) excessive chemicals use and c) soil degradation d) ground water crisis. 2. Maladministration → corruption, leakages, wastage and poor state procurement system. 3. Inefficient distribution → poor logistics, remote and inaccessible areas. 4. Policy issues → MSP skewed towards few crops, ONORC still not completely functional, unmonitored nutritional programs, lack of dedicated migration policy → unregulated slums → food insecurity. 5. Social challenges like overpopulation, poverty, lack of education + awareness (about varied dimensions of food security like sanitation, safe drinking water, micro nutrient needs of the body) and gender inequality → vulnerable section more insecure. 6. Rising weather extremities and disasters.

Answer 10

1. Agriculture innovations → a) integrated water, pest and nutrient management b) changes in cropping pattern as per agro-ecological zones. 2. Policy reforms → end of open-ended procurement system, automatic liquidation policy, rationalising MSP, DBT/food coupons and FCI reforms (Shanta Kumar). 3. Infrastructure build-up → multimodal logistics, cold storage, scientific warehouses and using containers instead of gunny bags. 4. Awareness and sensitisation + life cycle approach of dietary nutrients → leverage SHG and PRIs. Case study :- In India, women's self-help groups, supported under the National Rural Livelihood Mission co-financed by the World Bank, have mobilised to run community kitchens and restore fresh food supplies, provide food and support to vulnerable and high-risk families. These self-help groups, built over a period of 15 years, tap the skills of about 62 million women across India and have proven the worth of a community-based institutions in a time of need.

Answer 11

1. Public Sector Undertaking, under the Department of Food & Public Distribution, Ministry of Consumer Affairs, Food and Public Distribution. 2. Setup under the Food Corporation's Act 1964 3. Objectives → a) Effective price support operations b) Distribution of foodgrains throughout the country for public distribution system c) Maintaining satisfactory level of operational and buffer stocks of food grains to ensure National Food Security

Answer 12

1. Bedrock of entire national food security act → Ensures procurement and distribution to far flung areas → national food security 2. Covid crisis + migrant crisis → FCI tackled the challenges of hunger and starvation 3. Bedrock of PDS → fights malnutrition + poverty → inclusive growth 4. Purchases the crops at MSP → financial security to farmers + making agriculture remunerative 5. Supply chains disruption + private players not encouraged + high logistics cost → FCI to perform the essential services. 6. 60% of the cost of acquisition, procurement and distribution are transferred to the farmers → efficient system.

Answer 13

1. FCI faces issues in all three areas→a) procurement b) storage c) distribution 2. Less than 10% farmers could sell to govt agencies → unaware /lack of access to msp system→ only big farmers of NW states benefitted 3. 3)FCI has stored double the grains than prescribed buffer limits →(a) shortage in open market and thereby inflation (b) rotten grains due to FCI's limited Storage capacity. 4. 40-60% of PDS grains are siphoned off (NSSO2011) → former chairman of FCI called it as 'food corruption of India'. 5. FCI's mounting debts have increased to an estimated ₹2.55 lakh crore by March 2020.

Answer 14

1. SHANTA KUMAR RECOMMENDATIONS - designating it as an 'Agency for Innovation in Food Management Systems.' a. Procurement stage → a) outsource procurement in better performing states like punjab but centralised procurement in states like Bihar Assam Bengal and eastern up, b) cash transfers to farmers' c) no more open-ended procurement; set buffer stock quotas d) stringent quality checks by third party. b. Storage stage → a) outsource its stocking operations to various agencies such as Central Warehousing Corporation (CWC), State Warehousing Corporation (SWC), Private Sector under Private Entrepreneur Guarantee (PEG) scheme b) automatic liquidation of excess buffer stock in open market c) strategic buffer reserve. c. Distribution stage → a) cover 40% under NFSA 2013 => less subsidy but more quantity b) End to End computerization c) Online tracking of entire system from procurement to retail distribution. 2. Transportation improvements → a) Integrating Road transport along with rail (presently very high dependence on rail), b) containers instead of gunny bag, c) inland waterways d) automation in loading and unloading. 3. Pre-positioning shipment policy to hotspots → for chronically starved areas, food grains could be stored nearer to the target population. 4. Doing away with the FIFO (first in – first out) principle → release hygienic food grains on time. 5. Network of SHG + FPO be leveraged → ensure last mile connectivity and distribution.

Answer 15

1. Specifies the modes in which funds are invested in specific assets through which income is generated. 2. Three broad types; a) pubic investment models b) private investment models c) public-private partnership models. 3. Public investment model → government plays the role of raising and allocating the resources→ sources of revenue = (revenue receipts and capital receipts) 4. Private investment model → the private players raise and allocate the resources→ include domestic + foreign players (FDI, FPI, FII) 5. Public-private partnership model → collaboration between government agencies and private sector→ (BOLT, BOT, BOOT, BOO etc) 6. Recent innovative PPP models → Hybrid annuity model, Swiss challenge model, land lord model, GOCO model, VGF

Answer 16

1. Lower government revenues + high expenditure → low tax receipts, high subsidy bills, reduced investment, Covid induced disruption. 2. Poor resource mobilisation → uneven distribution of natural resources → untapped potential 3. PPP issues → multiple clearances required, corruption, cost and time over runs. 4. Relatively high government interventions → Regulatory cholesterol + red tapism + frequent change of policies → investors discouraged. 5. Ineffective coordination among different ministries.

Answer 17

1. Ease of FDI inflows → 100 per cent foreign investment in coal mining + contract manufacturing, + approved 26 per cent foreign investment in digital media. 2. Policy initiatives to promote 'ease of doing business' → single window clearance systems + e – filing of documents. 3. 3-pronged strategy in budget 2021 → a) DFI b) Monetising the public sector assets c) Increasing capital expenditure. 4. Streamlining regulatory ecosystem → GST, labour codes, refining of MSME definition

Answer 18

1. Contracts need to focus more on service delivery instead of fiscal benefits. 2. Infrastructure PPP adjudication tribunal (IPAT) to be created. 3. Amend prevention of corruption act 1988 to distinguish between genuine errors of decision making and acts of corruption. 4. Promote good governance by creating SPV (special purpose vehicle) + discourage government participation in SPV unless strategically essential. 5. Prudent utilization of viability gap funds where user charges cannot guarantee a robust revenue stream.

Answer 19

1. The major policy reforms of 1991 did not cover agriculture →agricultural growth remained stuck at the earlier level →excessive inequality between farm and non-farm incomes. 2. Need for liberalization of agriculture sector as per the WTO requirements (agri segments where market intervention by the government is either nil or very little→show 4–10% annual growth and MSP regime segment shows growth around 1.1%) 3. Domestic demand supply mismatch → few commodities in excess → few are imported in large quantities → poor market conditions + lack of infrastructure 4. Pressing need for improving export competitiveness of Indian agriculture. 5. Fregmented market + lack of investment from private sector due to restrictions

Answer 20

1. Farmers Produce Trade and Commerce (Production and Facilitation) act 2020; a. Facilitates barrier-free inter-state and intra-state trade and commerce outside the physical premises of APMC markets. b. Allows electronic trading of scheduled farmers' produce. c. Prohibits state governments from levying any market fee, cess or levy on farmers, traders, and electronic trading platforms for trade in an 'outside trade area'. 2. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services act 2020 a. Provides a legal framework to contract farming through an agreement between a farmer and b. Conciliation Board for resolution for effective dispute with stipulated timelines 3. Essential commodities (amendment) act 2020 a. Provides regulation of the supply of certain food items, including cereals, pulses, potatoes, and onions, only under extraordinary circumstances such as war, famine, and extraordinary price rise. b. Provides for deregulation of production storage distribution and supply of in normal circumstances →allows agri-businesses to stock items without restrictions on quantity.

Answer 21

1. Increasing choices with farmers → more competition → better prices → doubling income 2. Moving towards one nation - one market scheme + removal of 'middleman' culture 3. Surge in private investment in agricultural processing and infrastructure → farm laws remove restrictions on storage and distribution + better grievance redressal. 4. Boost to food processing industries 5. Promotion of Contract farming → mechanization + better utilization of resources → increased benefit of both parties.

Answer 22

1. Issues to farmers → a) Fear of discontinuing MSP regime → Farm laws do not provide for the MSP b) Absence of any regulation in non-APMC Mandis → exploitation at the hands of corporate c) Lack of consultation with farmers → distrust d) Market economy still not suitable for Indian farmers (lack of education + poor market knowledge) e) Small-marginal farmer's vulnerability may increase. 2. Case study = These fears gain strength with the experience of States such as Bihar which abolished APMCs in 2006. After the abolition of mandis, farmers in Bihar on average received lower prices compared to the MSP for most crops. 3. Issues to states → a) Revenue loss → Mandis bring in huge revenue for them b) Agriculture in state list → act empowers centre to give directions → blow on federalism. 4. Issue to middleman → a) Job losses → lobbying against the laws. 5. Issue to public → As the middlemen help farmers to bring crops to market → due to lack of resources with farmers → supply constraints may arise → food inflation.

Answer 23

1. Statutory backing to MSP →to eradicate the fear of farmers. 2. Providing real time market situation data to the farmers 3. Complimentary reforms in logistics, electricity, cold storage etc. → needs government investment as there is lack of private investment here. 4. Awareness to farmers regarding their rights + legal machinery to enforce these rights. 5. Empowering farmers through State Farmers Commissions recommended by the National Commission for Farmers 6. Leveraging FPOs to improve the bargaining power and creditworthiness of the farmers

Answer 24

1. Use of technology in agriculture + aquaculture + horticulture 2. necessary tool to modernise agriculture and increase yields + making it more cost-effective 3. Technologies + application used → drones + satellite photography + sensors + weather forecasts + automated irrigation etc 4. India = one of the largest manufacturers of farm equipment such as tractors, harvesters and tillers→ nearly one-third of the overall tractor production, globally, with the tractor production in the country estimated to increase to 16 million units by 2030.

Answer 25

1. Early warning systems using satellite data + genetic engineering→ for climate change adaptation. 2. Greenhouse management software → climate change mitigation 3. Smart water systems →prior information of leaks and equipment malfunction to farmers + allow them to remotely control water pumps. 4. Usage of drones→ faster examination of fields → using these one can see exactly which parts of the field need attention. 5. Fortification of seeds + crops → increasing nutritional value + higher market potential. 6. Mobile + Television → to provide real time information to farmers. 7. Digital banking → to get quick access to funds and credit. 8. Crop sensors → help apply fertilisers in a very effective manner, maximising uptake. 9. Micro-irrigation + rainwater harvesting → for efficient use of water. 10. Employment generation →farm managers, supply-chain specialists and finance experts, digital analysts and software developers + agri start-ups → CropIn, NaPanta, E-kutir

Answer 26

1. Small and fragmented land holding→ineffective utilisation of farm machines like tractors. 2. lack of funds + skills with small/marginal farmers to adopt. 3. Digital divide → lack of internet connectivity 4. Threat of losing jobs due to machines → low rate of adoption of farm mechanization. 5. Behavioural challenge → less receptive attitude →trust upon traditional way of farming among the farmers 6. Lack of investment from the private sector → lack of R&D + lack of tailor-made technology for different areas

Answer 27

1. National Mission on Agricultural Extension & Technology (NMAET)→ physical outreach + interactive methods for information sharing 2. a) E-NAM (for marketing + real time information about prices) b) Soil health cards (to monitor soil conditions) c) KUSUM yojana (solar pump-based irrigation) 3. Establishment of KVKs (Krishi Vigyan Kendras) 4. mKisan portal → web-based mobile technological advisory to farmers from Research Institutes and Agricultural Universities. 5. Satellite data and GIS Technology for Crop Production Estimation, Horticultural Inventory, Site Suitability Analysis for crop expansion and Drought Assessment. 6. India's National Strategy on AI recognises agriculture as a priority sector for implementation of AI-driven solutions 7. Budget 2021 → increased credit facilities for agritech startups

Answer 28

1. Buying + selling of agriculture products →processes to link farms and markets 2. Marketing methods in India →(a) rural primary markets (haats) (b) cooperative marketing (c)Contract farming (d) future markets (e) commodity markets. 3. It promotes →(a) monetisation of produce (b) raises farm income (c) ensures demand-supply balance (d) brings investments and capital formation (e)Attracts youth (f) strengthens industrial linkages (g) avoids distressed sale and migration.

Answer 29

1. Essential commodities act 1955 →govt regulated production + supply + distribution of essential commodities → affected the integrated value chain across the country. 2. APMC act →farmers required to sell produce in local mandis→ monopoly situation. 3. Lack of infrastructure (cold chains + warehouse + transport) → ineffective supply chains 4. Poor technological integration→absence of real time market information+ lack of knowledge of grading and standardisation. 5. Tariff + non tariff barriers hamper the international marketing potential

Answer 30

1. Legislative steps→(a) Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, (b) The Essential Commodities (Amendment) Act (c)The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act(d) model contract farming law 2. Institutional steps→(a) FCI(b) NAFED (c) commodity boards for rubber, tea, coffee etc (d) NDDB (e) FPOs (f)Cooperatives. 3. Infrastructural steps→(a) (AIF)Agri infra fund (b)mega food parks (c)(AHIDF)animal husbandry and infra dev fund(d) Kisan Rail (e) KrishiUdan scheme 4. Policy level steps→MSP-PDS system, E-NAM, AGMARKNET, Operation greens, pm sampada 5. Branding and promotion →GI tags, organic states- Sikkim

Answer 31

1. Integrating modern marketing ecosystem → social media marketing apps + marketing budget plans + neuro marketing 2. creating awareness about application of production related data→Resolving Cobweb phenomenon {cultivation of specific crop based on previous year data → excessive/(deficient) production if the demand in last year was high/(low) respectively →deflation/(inflation)} 3. Creating taxation incentives for private players to invest in agriculture marketing platforms. 4. Promoting agri-tech start-ups by way of handholding and incentives by the government. 5. Development of agri-export zones on the lines of SEZs.

Answer 32

1. Government incentives paid to farmers/agribusinesses/agricultural organizations to a) supplement their income b) manage the supply of agricultural commodities, and c) influence the cost and supply of such commodities. 2. Types → 1) Direct subsidies = direct cash incentive 2) indirect subsidies = cheaper credit facilities, farm loan waivers, reduction in irrigation and electricity bills, fertilizers, seeds and pesticides as well as the investments in agricultural research, environmental assistance,farmer training, etc. 3. Farm subsidies →about 2% of India's GDP. 4. The share of subsidy on agriculture and allied activities out of total subsidy of Rs 3.73 lakh crore, for all economic activities is 25.8%.

Answer 33

1. Supporting farmers→ Majority of farmers are small & marginal → poor → dependent upon agriculture for subsistence 2. Employment generation → by way of making agricultural activities profitable 3. Export promotion → by providing price competitiveness + improving quality of Indian 4. Ensuring food security

Answer 34

1. Increased exports of agri products → attracting private investment 2. Increased productivity → reduced food prices → self- sufficiency in food 3. Increased usage of technology and better infrastructure in agricultural activities → increased efficiency → increased profitability → reduced distress migration 4. Incentivising 'less focussed' crops→eg higher subsidies on the crops having nutritional + environmental benefits. 5. Increased + assured income → better livelihood conditions → better nutritional status 6. Environment friendly practices promoted → eg; KUSUM programme (subsidy for solar pumps)

Answer 35

1. Ecological challenges →a) cheaper electricity →over exploitation of ground water b)Excessive use of fertilizer→ eutrophication + water pollution + soil erosion c) skewed cropping pattern 2. Excessive burden on exchequer → farm loan waivers → banking twin balance sheet challenge + fiscal deficit 3. Rising inequality → indirect subsidies more beneficial for already rich farmers (poor targeting) 4. Wastage of food crops due to excess production → increased burden on FCI 5. Discouraging investors due to higher government intervention →eg - fertilizer industry 6. Issues at international platforms like WTO →de-minimus clause→ 10% limit on 'AMBER BOX' subsidies on developing countries.

Answer 36

1. Focus on direct cash transfers instead of input subsidies → expenditure by farmers as per their needs. 2. Leveraging digital transfer of subsidy → to remove leakages 3. Infrastructural reforms → to reduce the dependence on subsidies e.g. better irrigation facilities, promotion of renewable energy sources. 4. Institutional reforms → de-regulating urea supply. 5. Increasing investment in agricultural sector → public investment in agriculture must increase at 14% per annum (Ashok Dalwai Committee) + opening the sector for FDI → taxation incentives. 6. Legislative steps → contract farming + APMC reforms to reduce dependence on government.

Answer 37

1. BR act 1949 → regulates commercial banking in India. 2. power to RBI →licensing of banks + voting rights of shareholders + appointment of boards and management + audit, merger, liquidation + directives to banks + imposing penalties. 3. 1965 amendment → cooperative societies under its preview but not all provision applicable to them as they do on commercial banks.

Answer 38

1. Banking related function → under RBI 2. Management related functions→centre + state

Answer 39

Co-operative banks provide banking facilities to people of small means → Absence of regulatory oversight by RBI on par with commercial banks → poor performance of co-operative banks →PMC (Punjab & Maharashtra Cooperative) Bank scam.

Answer 40

1. Amends BR act 1949 with regard to cooperatives bank →as per BR act 1949 these were exempted from several provisions → now regulation under the Act similar to that of commercial banks. 2. Issuance of shares and securities→Co-operative banks may raise equity or unsecured debt capital from the public subject to prior RBI approval →(BR act 1949→Co-operative banks were excluded) 3. Prescription for qualification of management→RBI may prescribe qualifications for chairman employment + may remove a Chairman. 4. Supersession of Board of directors of co-operative banks→RBI can reconstitute the Board of Directors in order to ensure sufficient number of qualified members + supersede the Board of directorsafter consultation with the state government. 5. Formulation of scheme for reconstruction or amalgamationof banks → can be done by RBI without moratorium.

Answer 41

1. to provide for better management and proper regulation of co-operative banks 2. to protect the interests of the depositors 3. to increasing professionalism, enabling access to capital, improving governance and ensuring sound banking through the Reserve Bank of India.

Answer 42

1. Increase in burden of RBI supervisory work→ Currently, RBI regulates and supervises 86 scheduled commercial banks, 45 regional rural banks and 10 small finance banks →now extended to 1,544 UCBs, 363 district (central) co-operative banks and 33 state co-operative banks. 2. Issue of federalism →'Banking' = Union List subject and 'incorporation, regulation and winding up' of co-operative societies' = State List→whether regulation of management, audit, capital and winding up of co-operative banks are essential to regulating the activity of banking. 3. Provisions on capital may violate principles of co-operative societies→co-operative societies raise capital from members→act is unclear what it means to raise equity capital from the public, how it will be treated and regulated.

Answer 43

1. It is a BUYER-FARMER contract→ arrangement between producers and the processors/exporters→farmer promises to supply certain quantity of an agricultural product meeting the quality standards within a pre-agreed time. 2. In turn, the buyer commits→to purchase the product and, in some cases, to support production→the supply of farm inputs, land preparation and the provision of technical advice. 3. Presently regulated under → a) Indian contracts act 1872 b) APMC act 2003

Answer 44

1. Agricultural growth stagnated since last 6 years → Economic survey 2019-20 2. Sector is marred with issues like → price volatilities + high government intervention + low investment + restricted market access + exploitation by intermediary. 3. In consonance with the economic reforms of 1991 + govt recent push towards ease of doing business.

Answer 45

1. Involvement of private sector → increased investment + technology + competition 2. Higher mechanisation + better knowledge → raised productivity + quality 3. Assured market for farmers →reduced marketing+ transaction cost 4. Consistent supply of agri produce → less price volatility 5. Better export promotion → increased share in global agri trade 6. potential to develop agri start-ups + retaining youth in agriculture → agri entrepreneurship

Answer 46

1. Biased in favour of firms or large farmers (Monopsony) →Problems faced by small farmers like undue quality cut on produce by firms, delayed payments, low price and pest attack on the contract crop which raised the cost of production. 2. Contracting agreements are often verbal or informal in nature→ Lack of enforceability of contractual provisions 3. Small + marginal farmers discriminated→ small landholdings + no machines + high registration costs. 4. Ecological threats →promotion of monoculture + introduction of foreign varieties + soil erosion 5. IPR issues → eg., Pepsico case in Gujrat. 6. Agricultural field entrusted to somebody on contract basis→ reduced land for livestock to feed on

Answer 47

1. NABARD'S special refinance package for contract farming arrangements→creating market avenues. 2. Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services act 2020→ legal framework for contract farming + prior price determination + dispute settlement mechanism 3. Essential commodities amendment act 2020 → removal of stock limits→ large organisations can participate. 4. Repealing + amending the APMC acts →bringing sale of agri produce out of the clutches of mandis. 5. Model contract farming act 2018 →farmer recognised as 'weaker' party so interests need to be protected + contracted produce under insurance + no permanent structure on farm premises + FPOs to mobilise small farmers + Contract Farming Facilitation Group (CFFG) →promoting contract farming at village / panchayat level+ Contract framing to be outside the ambit of APMC Act.

Answer 48

1. Foster more competition→to incentivise firms to offer better terms and services to farmers + improve farmers' connectivity to spot markets and mandis across the country. 2. Provide information→maintain an information repository of farmers, contracting firms and standards for crops, land availability, default rate, and performance standards→help farmers and sponsors to evaluate each other prior to engaging in contracts. 3. Encourage softer means for enforcement→risk-sharing mechanisms in contracts, renegotiation options, and simplified and transparent contract terms. 4. Education and awareness regarding farmer's rights → leveraging FPOs + cooperative farming models. 5. leveraging technology + promoting R&D → GIS, remote sensing + soil mapping + crop clinics and testing laboratories + on farm experiment facilities.

Answer 49

Protect the interests of consumers + encourage free and fair competition in the market + bring transparency + strengthen the regulatory regime. 1. Appointment of a nodal person →look into the compliances of the CPA and E-Commerce Rules as applicable. 2. Information Disclosures: Rule 4(2) provides for disclosure of material information on the e-commerce marketplace in clear and accessible manner→ Every seller to make sure that descriptions, images, and other content of goods or services are accurate. 3. Grievance redressal mechanism→appointing a Grievance Officer. 4. Every marketplace e-commerce entity to provide information relating to return, refund, exchange, warranty and guarantee, delivery and shipment, modes of payment for consumers to make informed decisions. 5. E-commerce Rules 2020 clearly states→no marketplace seller shall falsely represent itself as a consumer and post reviews about goods or services.

Answer 50

1. Prohibition on display or promotion of misleading advertisement by e-commerce entity. 2. E-commerce firms offer imported goods or services for sale→ Name + details of importers to be mentioned. 3. Filter mechanism to display notification regarding the origin of goods + suggestions of alternatives to ensure a fair opportunity for domestic goods; 4. Sponsored listing of products and services are distinctly identified with clear and prominent disclosures. 5. No e-commerce entity shall organize a flash sale of goods or services offered on its platform. 6. E-commerce companies will have to appoint a chief compliance officer, nodal contact person for 24×7 coordination with law enforcement agencies and a resident grievance officer. 7. Every company which intends to operate in India will also have to register itself with the DPIIT (Department for promotion of industry and internal trade)

Answer 51

1. Overregulation →retarding growth and job creation 2. Issue of delivery charges + 'add on charges' not covered→sellers advertise low prices at the start of the purchasing process → later on, several additional charges, taxes, fees imposed/disclosed towards the end (DRIP PRICING) 3. Implementation of these rules → increase in operational expenses of e-com companies. 4. Rules unclear about the 'flash sales' → whether all the flash sales are prohibited or are there certain criterias.

Answer 52

1. Simplify the 'Principal Place of Business' (PPoB) requirement by making it digital 2. Build infrastructure → physical + digital→ Use of AI for better logistics support. 3. Skilling policy and programmes →focus e-commerce sector to meet future demand . 4. Identify products that have potential for the export market, connect e-commerce with exportoriented manufacturing clusters and leverage existing SEZs to create e-commerce export zones. 5. Promotion of robust data protection frameworks along the lines of EU's General Data Protection Regulation (GDPR). 6. Provide MSMEs with support to understand→how e-commerce functions, awareness programs, incentives to those using digital marketplace.

Answer 53

1) Buying and selling of good or services via the internet. E.g. a) The sale of products directly to a consumer b) service → coaching, writing, and influencer marketing, etc., that are purchased online. 2) Types of e-commerce: a) Business to Business (B2B) b) Direct to Consumer (D2C)→ brand is selling directly to their end customer without going through a retailer, distributor, or wholesaler c) Consumer to Consumer (C2C) d) Consumer to Business (C2B) e) Business to Consumer (B2C) 3) Classification of e-commerce sites: a) Market based model→providing an IT platform by an ecommerce entity to act as a facilitator between buyer and seller e.g. Amazon, flipkart b) Inventory based model →an e-commerce activity where inventory of goods and services is owned by ecommerce entity and is sold to the consumers directly e.g. Jabong

Answer 54

1) Market is expected to grow from US$ 38.5 billion (2017)→US$ 200 billion by 2026. 2) India's e-commerce orders volume increased by 36% in the last quarter of 2020; largest beneficiary→personal care, beauty and wellness (PCB&W) segment.

Answer 55

1) Increase in internet and smartphone penetration→ launch of 4G network; 2020→internet connections =776.45 million, driven by the 'Digital India' programme 2) Pandemic and consequent lockdown →sudden rise in volume of sales taking place through e commerce site. (Temporary reason but will have behaviour change for longer term) 3) Increasing financial inclusion due to digital banking → ease of online payments. 4) Change in lifestyle--> less time for shopping→easy to shop online. 5) Increased options for the customer with better deals. 6) Government support e.g. GEM portal, National retail policy, eased FDI norms, consumer protection (e-commerce) rules etc 7) Inflow of FDI from e-commerce giants- Indian Government hiked the limit of FDI in E-commerce marketplace model to up to 100% (in B2B models)

Answer 56

1) Financial fraud and theft of sensitive information→Breach of right to privacy. 2) Whole sector depends on internet connectivity → digital divide → not able to reach its full potential 3) Issue of less accountability and responsibility of the e-com companies as compared to physical market shops → lack of trust among the customers→ 95% share of physical market only 5% shopping on online portals 4) Poor logistics → delayed orders → increased shipping cost. 5) Sellers, as in offline, are required to have a physical 'Principle Place of Business' which, given the nature of e-commerce, is not practical.

Answer 57

1. A multi-dimensional concept→economic growth that is distributed fairly across society and creates opportunities for all → benefitseveryone→reducing the disadvantages faced by the poor→not restricted to poverty reduction alone. 2. Basic principle → equity 3. Comprises both outcomes and processes, involving participation and benefit-sharing. 4. Elements of Inclusive Growth: a) Social development b) equitable + fair distribution of income c) Good governance d) economic development e) equal opportunity f) environmental protection

Answer 58

1. To achieve the overall progress of the country→ with equity + sustainable development. 2. To attain certain targets relating to poverty, employment, education, infrastructure, health, women and children, gender equality, regional equality etc. 3. To present itself before the world as the leader of holistic development of people. 4. To reap the full potential of its demographic dividend → preparing for technological change (IR4 technologies) and shifting employment patterns (from industry to services and from traditional to modern). 5. To ensure political stability → high inequality→ sign of falling state.

Answer 59

1. High inequality + poverty→India's gini coeff= 0.35 (world Bank) + top 10% of the Indian population holds 77% of the total national wealth (OXFAM International) +300 million people still live in extreme poverty (UNDP) 2. Lack of access to basic services→good healthcare + quality education 3. Excess reliance on informal sector: 80% of the labour force →excluded from accessing many of the resources and thereby improve their life chances. 4. Social stratification on the lines of gender, caste and religion + diverse desires →eg; city people vs tribal people 5. Lack of financial inclusion: according to World Bank→190 million adults in India do not have a bank account; India=world's second largest nation in terms of unbanked population after China. 6. Rise in unemployment rate: sharply rose to 7.11 per cent in 2020.

Answer 60

1. Progressive taxation policy →income redistribution + money with govt → spent for inclusive growth. 2. NITI Aayog's Strategy for New India @75 → Government to make economy, social services and environment inclusive of all sections of the society. E.g→ one of the objectives: cities to ensure that urban poor and slum dwellers including recent migrants can avail city services. 3. MGNREGA →to control seasonal unemployment. 4. PM Jan DhanYojana→to improve financial inclusion. 5. PM Jeevan JyotiBima Yojana + PM SurkhshaBimaYojana→ for improving social inclusion. 6. Start-up India + Make in India → for inclusion of MSMEs in the larger economy. 7. Labour codes for formalization of economy 8. Pt. DeenDayalUpadhyayaGrameenKaushalyaYojana (DDU-GKY)→ for skill improvement of demographic dividend of the country. 9. National Rural Health Mission (NRHM) + Mission Ayushman : for making health accessible and affordable for all. 10.New Education policy to make education inclusive and effective. 11.#Accessible India Campaign.

Answer 61

1. Global hunger index→measure and track hunger at the global, regional, and national levels. Four indicators: a) undernourishment b) child wasting c) child stunting d) child mortality. 2020 Global Hunger Index→India = 94th/107 countries→India has a level of hunger that is serious 2. Human development report (UNDP) → a) MDPI (covering 10 multi dimensional indicators) b) HDIGDI (longevity + education (Expected years of schooling+ Mean years of schooling) + income per capita) c) gender inequality index (reproductive health + empowerment +labour market) 3. OXFAM REPORTon Inequality: a) combined total wealth of 63 Indian billionaires>total Union Budget of India for the fiscal year 2018-19 b)female domestic worker 22,277 years to earn what a top CEO of a technology company makes in one year c) rich are getting richer and poor are getting poorer d) India's richest 1 per cent hold more than four-times the wealth held by 953 million people who make up for the bottom 70 per cent of the country's population.

Answer 62

1. National Institute of Solar Energy assessed→Country's solar potential=748 GW 2. World's 11th largest solar capacity. 3. Solar power development → 5th position globally 4. Solar power capacity → increased by more than 14 times in the less than 7 years from 2.6 GW in March,2014 to 37.46 GW in 31.12.2020.

Answer 63

1. Locational advantage: Tropical region + nearness to equator → about 5,000 trillionkWH/year+ most parts = 4-7 kWh per sq. m per day. 2. Large tracts of land which is barren, deser and large lakes→ solar power plants can be set up in such areas. 3. Huge population→high demand→ huge scalability in India. 4. Ability of Off-grid decentralized generation→advantageous from a rural electrification + remote areas where grid can't reach eg Andaman nicobar islands. 5. Diversification of energy basket→ stability + security. 6. Government support → National (national solar mission) + International (ISA)

Answer 64

1. Environmental sustainability→ renewable clean source → reduced dependence over exhaustible polluting resources. 2. Social benefits→reduction in drudgery among rural women and girls engaged in the collection of fuel wood from long distances + cooking in smoky kitchens + minimization of the risks of contracting lung and eye ailments + Solar study lamps (better education opportunities) + improvement in the standard of living. 3. Economic benefits: decreasing per unit cost of electricity + export promotion + Innovation promotion + reduction of imports of petro products + Self-reliance + employment generation at village level. 4. National + international commitments→ 175GW renewable energy target by 2022

Answer 65

1. Lack of reliable nature → battery storage required → lithium batteries not made in a big way in India→lithium mining → environmentally polluting. 2. Grid integration+ poor financial condition of Distribution Companies (DISCOMs). 3. High cost due to imported components (local manufacturing still not picked up) 4. Land Scarcity: Exclusive installation of solar cells → has to compete with other necessities that require land. 5. Manufacturers → focus on export markets to maximize profit→tie-up with foreign players in Europe and United States →reduced supplies for local market. 6. Overlapping jurisdictions: too many agencies like MNRE, IREDA, SNA, electricity board and electricity regulatory commission. 7. Confusion along the GST and the import duty on solar equipment→ yet to be resolved completely.

Answer 66

1. National Solar Mission (Jawaharlal Nehru National Solar Mission): under National Action Plan on Climate Change→targets installing 100 GW grid-connected solar power plants by 2022. 2. Schemes→ a) Solar Park Scheme, Canal bank & Canal top Scheme b) PM-KUSUM scheme c) Grid Connected Solar Rooftop Scheme d) Provision of roof top solar and Guidelines for development of smart cities e) Atal Jyoti Yojana f) UMPP solar projects like Kurnool, pavagarh etc. 3. National Institute of Solar Energy→apex institute for research and development 4. Infrastructure status for solar projects + Green energy corridor concept 5. Waiver of Inter State Transmission System (ISTS) charges and losses.

Answer 67

1. International Solar Alliance + one sun one world one grid initiative 2. India's Intended Nationally Determined Contributions (INDCs) target to achieve about 40 percent cumulative electric power installed capacity from non-fossil fuel-based energy resources and to reduce the emission intensity of its GDP by 33 to 35 percent from 2005 level by 2030 → specific reliance on Solar energy. 3. MOUs with different countries for cooperation e.g. France, Saudi Arabia, Uzbekistan, Spain etc.

Answer 68

1) Existing issues→a) loss making (13 p/km) b) Cross subsidisation c) High operating ratio (~98%) d) Frequent delays + poor services e) Red tapism f) Overload (In 64 years freight loading -grown by 1344% & passenger kms by 1642%, the Route kms - grown by only 23%) g) Accident potential 2) Huge significance→ economic development, social inclusion, demographic redistribution, industrial linkages, cheaper transport, less CO2 emissions 3) Future potential → Low cost travelling& transportation, high speed, multimodal transportation, international rail corridors → all requires world class railway infrastructure + administration

Answer 69

1) Subsuming railway budget within general budget → Depoliticization + efficient financial allocation 2) Restructured railway board (1 chairperson + 4 members) + Merged cadres (group A) as Indian Railway Management Services (IRMS)→reduced departmentalisation&inter-departmental rivalries 3) Sreshtha(New R&D organisation) + Sutra (World class data analytics, simulation softwares, network optimisation &decision support systems) 4) Roping in of private players →private operators to run trains on as many as 150 routes on the Indian Railways network→ efficient + faster movement 5) Rashtriya Rail SanrakshaKosh (National Rail Safety Fund) with a corpus of Rs 1 lakh crore.

Answer 70

1) Better services + maintenance + competition + private players can be held accountable 2) Technology boost + reduction in transit time → demand-supply balance 3) Better capacity utilization →increased freight & passenger transport →more jobs + Cheaper transportation costs than Roads → reduces Logistics to GDP →Increases economy's competitiveness 4) Less political interference → decisions based on merit and not on political voices 5) Monetization of assets →Govt. can spend these on social sector

Answer 71

1) Potential rise in ticket fairs as prices will be Market driven 2) Social exclusion due to profit orientation→backward areas may go unserved + concessions to senior citizen, women, divyangs might not be there. 3) Fear of formal job losses 4) Lack of modernised signal system → high traffic load→ private trains will be delayed too 5) Dual control → split responsibility can cause poor accountability 6) Private players may increase the existing load without capacity addition→ compromises safety

Answer 72

1) Bibek Debroy recommendations:a) promoting liberalisation b) separate core& non-core activities 2) Leveraging IRCTC → has experience in running 'tejas express' → unity of command under single administration of railways and its undertaking. 3) Subsidies + tax incentives to companies that would provide low-cost services. 4) Expanding rail track networks + modernising signal system 5) Learning from PPP models of Germany – division between operator and infrastructure developer

Answer 73

1) Unified code consolidating 4 existing laws→SEBI Act 1992(powers to regulate capital market), Depositories Act 1996 (regulates all the depositories of the country), Securities Contracts (Regulation) Act 1956 (governs stock exchanges) and Government Securities Act, 2007 (Power to RBI to amend the laws governing the G-sec market) 2) Announced in budget 2021-22

Answer 74

1) To increase the operational efficiency of SEBI → reduces the turnaround time for approvals→ ease of doing business improved→increased investments into capital market 2) To have a unified legislation regulating various forms of securities like equity, commodity, currency and interest rate → removes contradictions, overlaps and outdated provisions. 3) To give better legal clarity to investors + intermediaries 4) As a part of BN Sri Krishna committee (FSLRC) recommendation to merge 15 acts into Single code.

Answer 75

1) Simplification + rationalisation of laws →reduced friction between various financial regulators→ better enforcement 2) Cutting down of compliance cost in Financial Markets →More investor friendly 3) Rise in investor confidence → increase in credit ratings→Long run, Easier for Govt. to raise loans 4) Inflow of capital can increase → overcoming the Pandemic shocks

Answer 76

1) Falling GDP due to Covid → hinders the development of capital market 2) Inflation → reduced purchasing power →reduced investments 3) Non uniform tax systems → under growth of businesses 4) Low education and high unemployment

Answer 77

1) Union Budget 2021-22 →permanent institutional framework →purchase investment grade debt securities (low to medium risk securities)→ develop the Bond Market. 2) Development of a world class Fin-Tech hub at the GIFT-IFSC. 3) Warehousing Development and Regulatory Authority will be strengthened to set up a commodity market ecosystem arrangement 4) Investor charter →right of all financial investors across all financial products.

Answer 78

1) Either fully or partially powered on electric motor, instead of an internal combustion engine 2) Two basic types of EVs: All-electric Vehicles (AEVs) and Plug-in Hybrid Electric Vehicles (PHEVs).

Answer 79

1) AEVs → powered by one or more electric motors → exclusively uses battery for energy → rechargeable by plugging into the grid → consume no petroleum-based fuel → no tailpipe emission 2) PHEVs → use batteries to power an electric motor whose battery can be recharged by plugging it into an external source of electric power or even by its on-board engine and generator.

Answer 80

1) At present, EVs represent <1% of the total vehicle sales in India. 2) More than 30% of the new vehicle sales in India will be electric by 2030 (Global EV Outlook) 3) FY 2020→ EV sales of 2 wheelers & buses → increased 21% & 50%; electric cars →5% decline 4) In January 2021, the maximum units were sold in Uttar Pradesh, followed by Bihar and Delhi.

Answer 81

1) Mitigation of Global Warming → average 3% GDP loss every year 2) Controlling Air pollution → India has 21/30 global cities with the worst air pollution (World Air Quality Report, 2019) → much of the pollution load due to vehicular emissions 3) Boosts make in India → achieve manufacturing share of 25% GDP by 2022 → boosts employment 4) Large-scale adoption of electric vehicles → can save $60 billion on oil imports by 2030.

Answer 82

1) Batteries related → lithium & cobalt imported + Capital intensive + poor charging infrastructure 2) Policy related → Policy uncertainty + Lack of dedicated guidelines + high rates of GST 3) Apprehension of job losses → requirement of skilled labour + automation impact 4) Limited Grid Capacity →India is able to add only 20GW/ annum to its grid →India's EVs market needs a minimum of 10 GW of cells by 2022→ extra demand → difficult task 5) EV related → Poor range on single charge + Most electricity generated from coal only

Answer 83

1) Enabling charging infrastructure + battery swapping model + improving electric grid capacity 2) Increasing R&D in technologies like fuel cells 3) Strengthening bi lateral relations → Chile, Bolivia, Australia, Congo → for Lithium and Cobalt. 4) Focus on increasing investments → Govt + private + FDI & favourable policies like tax cuts etc. 5) Formation of robust electric waste handling policy

Answer 84

1) Favourable government steps → a) Setting up at least one EV charging kiosk at petrol pumps across the country b) National Electric Mobility Mission Plan (NEMMP) c) Faster Adoption and Manufacturing of (Hybrid) and Electric Vehicles (FAME) scheme d) Tax benefits e) Niti Aayog + ITF → decarbonising India's transport initiative f) NTPC → commissioned its 1st EV charging station 2) Awareness and outreach campaigns →'Switch Delhi' Campaign. 3) Increasing Foreign investments like Tesla motors etc. 4) Categorization of Charging of batteries as service

Answer 85

1) Digital currency = electronic model of currency notes and coins→stored in digital wallet→can be transformed into cash in hand. 2) Cryptocurrency = encrypted form of digital currency→highly volatile→advanced blockchain technology to maintain smooth transaction flow - Bitcoin, Ethereum, Dogecoin. 3) Sovereign cryptocurrencies = Countries recognising cryptocurrency as legal tender. Eg→ Marshal island's SOV → sovereign digital currency

Answer 86

1) Ease of transfer → no middlemen/third party required→ decentralised currency. 2) Investment opportunity → huge profits → 2017: few $100→ 2021 $62000 3) Privacy + security → blockchain technology used → cannot be traced. 4) Low crypto currency charges unlike banks which charge several types of fees. 5) Lots of cryptocurrencies present→multiple options→ crypto exchanges can be used to trade them.

Answer 87

1) Security threats →absence of any central agency + anonymous blockchain technology →terror financing + other financial crimes. 2) High volatility in valuation + lack of liquidity 3) Data threat → digital mafias to penetrate the crypto market 4) Not recognised yet in most countries→ unregulated→loss of revenue for the government for transaction in cryptocurrency 5) Highly energy intensive→energy consumption by these = total energy consumption of mid-sized economies like Switzerland, Ireland etc.

Answer 88

1) Subhash Chandra Garg committee → cryptocurrency cannot be used as legal tender or currency at any place in India. 2) 2018-19 budget speech, Finance Minister→ Cryptocurrencies not a legal tender. 3) 2018: RBI circular→ preventing all banks from dealing in cryptocurrencies→declared unconstitutional by the Supreme Court in May 2020. 4) 2021→Cryptocurrency and Regulation of Official Digital Currency Bill, 2021, to create a national digital currency + ban all private cryptocurrencies. Note: national digital currency = digital form of a country's fiat currency. Instead of printing paper currency or minting coins, the central bank issues electronic tokens. This token value is backed by the full faith and credit of the government.

Answer 89

1) Categorising the cryptocurrencies as public (government-backed) or private (owned by an individual) inaccurate → they are decentralised but not private.

Answer 90

1) Non-banking financial companies. 2) Multiple regulators of the NBFCs (RBI, SEBI, IRDA, NHB etc.)→ given a kind of ‘umbrella’ definition→ is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance business, chit business but does not include any institution whose principal business is that of agriculture activity, industrial activity, purchase or sale of any goods (other than securities) or providing any services and sale/purchase/construction of immovable property. 3) Based on their liability structure →classified into two broad categories→ a) deposit-taking NBFCs (NBFC-D), and b)Non-deposit taking NBFCs (NBFC-ND)."

Answer 91

1) One definition→financial intermediaries which facilitate credit but not subject to regulatory oversight. 2) Second definition→Institutions serving the unserved areas (not always serviced by commercial banks)"

Answer 92

1) Complementary to the banking sector due to their—a) customer-oriented services b)simplified procedures c)attractive rates of return on deposits d)flexibility and timeliness in meeting the credit needs of specified sectors. 2) RBI’s Financial Stability Report →NBFCs have continued to perform better than the banks. 3) Increase the financial inclusion→ NBFCs are there where banks are not there 4) Technologically rich→ use of mobile phones + internet 5) Ground level understanding of their customers profile →gives them an edge to customize their products according to client needs→ deepen financial markets."

Answer 93

1) Not required to maintain CRR and SLR →defaults and bankruptcy→contagion in the market→Break of trust + loss of savings →Liquidity crunch in the economy 2) Ticking financial bomb →Nexus of NBFCs + credit rating agencies + auditors→false information about creditworthiness of the NBFCs → crores of investments at risk →e.g., Infrastructure Leasing & Financial Services (IL&FS) 3) Asset liability mismatch→ not able to meet its credit requirements 4) “Connected lending”→ Financial Scams."

Answer 94

1) Special liquidity scheme→SPV to issue securities→bought by RBI→funds given to NBFCs 2) Targeted long term repo operations 3) For certain NBFCs→ maintain 10% of their deposits in liquid assets→to maintain liquidity. 4) Compulsory registration with RBI for NBFCs having net funds > Rs 50 lakhs 5) Periodical returns to the RBI on various matters relating to their operations."

Answer 95

1) Creating a four-tier structure + progressive increase in intensity of regulation. a) Base Layer: Least regulatory intervention→NBFC-ND with threshold at 1000 crores (non-systemically important) b) Middle Layer: Stricter regulatory regime→ systemically important NBFCs + NBFC-D c) Upper Layer: regulatory superstructure → Bank like NBFCs having large potential of systemic spill-over of risks →impact financial stability. d) Top Layer→If certain NBFCs lying in the upper layer are seen to pose extreme risks as per supervisory judgement, they can be put to top layer."

Answer 96

(1) Policies creating Dwarfs (Firms = smaller + older than 10 years.) e.g. If the firms grow beyond the thresholds that these policies employ→ unable to obtain the said benefit. (2) Out of formal network → 90% of the MSMEs informal (3) Lack of investment from private sector → funds shortage → low innovation (4) Credit non-availability + delay in payments ; even after govt procurement, funds are not released on time. (5) Technology constraints + obsolete machinery → low production + productivity + quality (poor economies of scale) (6) obsolete marketing strategy → poor branding + skeptic attitude towards their products (7) maximum presence of semi skilled + unskilled workforce"

Answer 97

(1) Udyog Aadhar Number: unique identifier → one stop solution for MSMEs offered by all Ministries + Departments. (2) ASPIRE (a Scheme for Promoting Innovation and Rural Entrepreneurs) → setting up network of technology centers and incubation centers. (3) Credit in 59 minutes scheme → cheap + fast access to credit → working capital and term loan worth Rs. 1 lakh to Rs. 1 crore. (4) Atma nirbhar bharat abhiyan→Special attention to MSMEs (5) Udyam registration (based on self certification) → To deal with informal nature → incentives attached to registration e.g. payment within 45 days. (6) Subordinate debt scheme→ promoter will give credit to the MSME→government will bear the risk of loan to promotor by the bank. (7) Funds of Fund Scheme →corpus of `10,000 crore → financial relief and funding to MSMEs (8) CHAMPIONS portal→to help the MSMEs in terms of finance, raw materials, labour, permissions, etc. (9) Trade Receivable System (TReDS) by RBI → for timely payment to MSMEs. (10) Zero effect-Zero defect policy → for making MSMEs efficient and environment friendly."

Answer 98

(1) Greening of MSMEs → Efficient technology + green sectors like renewable energies (2) Clusterisation model → eg Kanpur leather industry/Ahmedabad textile industry (3) Implementing new labour codes → balance full time/part time workforce (4) Providing cheaper electricity + natural gas to MSME→ Currently, power DISCOMs and city gas distribution companies do not permit MSMEs to procure their own electricity or natural gas → charge them higher rates than their global counterparts. (5) Promoting sectors with high spill-over effects on other sectors e.g. Tourism → impact on hotel & catering, transport, real estate, entertainment etc. for job creation. (6) Awareness generation regarding their IPR to register trademarks + patents."

Answer 99

(1) Micro, Small, and Medium Enterprises → first time defined under MSME development Act 2006. (2) Redefined by the MSME Development (Amendment) Bill, 2018. (3) Two categories: (i) Manufacturing; and (ii) Those engaged in providing/rendering of services. Classification of enterprises into micro, small and medium enterprises (in Rs) Kind of enterprise Act of 2006 Bill of 2018 Manufacturing Services All enterprises Investment towards plant & machinery Investment towards equipment Annual Turnover Micro 25 lacs 10 lacs 5 Cr Small 25 lacs to 5 Cr 10 lacs to 2 Cr 5 Cr to 75 Cr Medium 5 Cr to 10 Cr 2 Cr to 5 Cr 75 Cr to 250 Cr"

Answer 100

(1) Investment criterion led to Pan Peter Syndrome → with increase in size → increase in regulations and rules → discouraged MSMEs to become bigger. (2) Classification based on Annual turnover → No need for frequent inspections →to check the investment in plant and machinery. (3) Differentiation between manufacturing and services MSMEs removed → Transparent, non-discriminatory policy formation."

Answer 101

(1) More than 6 crore MSMEs→ around 95% of total industrial establishment in India → backbone of Indian economy (2) Contributes 30% to India’s output/GDP + 45% to manufacturing output/GDP (3) Contributes around half of the exports (4) Employs more than 11 crore workers→ four times more labour intensive than normal industries. (5) Provides diversity to manufacturing + services ranging from textiles to space equipments to food processing. (6) Presence in rural areas → reduced regional disparity"

Answer 102

(1) Poverty alleviation →Local economic development → more jobs being created→ breaking vicious cycle of poverty → SDG 1, 8, 10 (2) Bring diversity of business and risks→ strengthen resilience of the economy→ SDG 9 (3) Utilization of locally endowed natural resources →environmentally conscious→ SDG 12, 13, 14, and 15."

Answer 103

(1) Less Capital Intensive → suitable to India (low middle income country) (2) Extensive Promotion & Support by Government→ single window registration + credit facilities etc (3) Reservation for Exclusive Purchase by Government → 25% procurement from MSMEs (4) Export Promotion + branding →increase in accessibility of MSME products (5) Growth in demand in the domestic market size due to overall economic growth"

Answer 104

(1) To popularise indigenous products (local products) → make them global (increase accessibility and branding) → increase exports + reduce imports. (2) To promote local manufacturing + local market + local supply chains. (3) To make Indian products globally competitive. (4) To make India self-reliant “AtmaNirbhar” (5) Not against globalisation but new form of globalisation→Conversion from profit-driven to people-centric. (6) shifting the focus from ‘Make in India’ to ‘Make for World.’"

Answer 105

(1) Over 30 years ago→no much Indian brands were there + lack of trust on local brands (2) Now→more than 60%of the brands in the food industry are local brands (3) Local brands comprise 57% of shopper’s decision (4) Indian brands not much popular → personal hygiene, cosmetic, and consumer durable segments."

Answer 106

(1) product quality improvement policies → zero effect zero defect (2) “Brand India” promotion in foreign market by India brand equity foundation (IBEF) (3) Focussing on emerging technologies→ robotics, 3D printing, artificial intelligence etc (4) Link itself to global value chain (5) Developing manufacturing clusters + start-ups + efficient forward-backward linkages (6) Consumers Awareness about the local brands (7) Government support to MSMEs + handholding"

Answer 107

(1) Reduced current account deficit (2) Rise in India’s presence in global market → strategic advantage vis-a-vis China (3) High potential to boost employment (4) Increased local consumption → increase in economic activities → increased GDP"

Answer 108

(1) Might be seen as “protectionist policy” by other countries (2) manufacturing is still weak → dependence for raw materials like lithium on foreign countries inevitable (3) reduction in competition from foreign products → quality deterioration (4) Global economy → works on GIVE & TAKE → India’s stance of only taking from global economy → not sustainable. (5) Initial Demand-Supply mismatch due to reduced imports of certain necessary items."

Answer 109

(1) PM has made it clear → vocal for local = self reliance and not self-centeredness. (2) Progress of India = progress of whole world (3) Rise in global competition → innovation → strengthening of globalisation"

Answer 110

(1) Set of regulations→consolidating central labour laws in 4 categories (2) Recommendations by Second Labour Commission (1999) (3) Four codes → a) Code on wages b) Code on industrial relations c) code on social security d) Code on occupational safety, health and working conditions."

Answer 111

(1) Wage code→ a) Floor wage fixed by Centre, b) Fixing the minimum wage→ must be >floor wage + revised every 5years, c) Overtime Wages→ must be at least twice the normal rate of wages, d) Wage deduction should not exceed 50% of the employee’s total wage, e) no gender discrimination. (2) Code on industrial relations→ a) prior permission from the govt for closure, lay-off and retrenchment for an establishment having at least 300 workers, b) Negotiating Union→one having >51% of the workers as members = sole negotiating union c) Negotiating council→if no sole negotiating union→representatives of unions that have at least 20% of the workers as members. d) industrial tribunals for settlement of disputes. (3) Code on social security → a) Social security fund by centre as well as states for unorganised workers, gig workers and platform workers, b) National Social Security Board→recommend + monitor schemes, c) In case of pandemic/epidemic/disaster→ contributions to PF/ESI can be reduced. (4) Code on occupational safety → a) occupational safety board at national + state level, b) valid for establishment > 10 workers, c) welfare facilities at premises."

Answer 112

(1) Simplification of laws →reduction of overlapping + contradictory + multiple definition-based provisions. (2) Inclusive nature → for the first-time gig worker + migrant workers included + social security for self-employment sector. (3) Reduced chances of “unionisation” → collaboration →efficient dispute resolution (4) Institutional mechanism → NSSB to recommend + monitor schemes (5) Federal spirit respected → states given power to decide for their own minimum wage above floor wage."

Answer 113

(1) Lack of clarity→ in case no union has required support of at least 20% workers (2) enforcement of tribunal award →govt may defer it on certain grounds →aim defeated (3) No universal social security→ only the enterprises above certain threshold covered. (4) Provisions on gig workers and platforms workers are unclear (5) Size based threshold→burden on small establishments + firms remain small."

Answer 114

(1) Labour Market Information System (LMIS) → identifying skill shortages + training needs + new employment opportunities (2) Implementing govt schemes → PM shramyogi mandhan yojna, Atal pension scheme, Shram suvidha portal, transparent labour inspection scheme. (3) Increase in quality apprenticeship (apprentice protsahan yojna) and self-certification of documents. (4) Skill development under shramev jayate →key element under make in India. (5) Other supplementary reforms→ raising income and demand, stabalising business climate, infrastructure upgradation, skilling of workforce and consistent export - import policy to increase overall investment and jobs."

Answer 115

(1) Steps to increase production + productivity + employment opportunities without compromising worker’s interest. (2) Protection + strengthening of worker’s rights. (3) Balancing industrialist + workers interest."

Answer 116

(1) Industrial Disputes Act 1947 → layoff + retrenchment + closure of industrial enterprises + strikes+ lockouts. (2) Factories act 1948 → safety measures on factory premises + health and welfare of workers. (3) The Minimum Wages Act, 1948 → skilled and unskilled labours. (4) Employee providend funds act and employee state insurance act → social security"

Answer 117

(1) Multiple and complex set of laws →high inter-state variations→technical language→ difficult compliance and enforcement→foundation for corruption, rent seeking and exploitation (2) Inflexible laws→firms (employing>100 workers)→require govt approval for firing workers→no new hiring. (3) High degree of informalisation→90% → laws not applicable→poor social security (4) Gender discrimination→unequal wages → poor enforcement of minimum wages act (5) Issues with trade unions→multiples numbers→ frequent strikes + inter-union rivalry + politicisation → industrial disputes act unclear about the union’s rights (6) Lack of formal jobs + nexus with enforcement officers→ Contractualisation + exploitation of labour (7) Share of manufacturing decreasing→16.6% in 1990→ 13.7% in 2019"

Answer 118

(1) Legislative reforms→ (a) payment of bonus amendment act (the bonus bracket was increase→ more workers to get bonus), (b) maternity benefit act 2017(extended maternity leave, crèche facilities etc) (c) child labour prohibition and protection act (complete prohibition of employment of children below 14 years except family business + stricter punishment for violators) (2) Governance reforms→ fixed term employment, ease of compliance for establishments etc (3) EPFO initiatives →employee enrolment campaign, Reduction in administrative charges etc (4) Number of schemes →labour identification number, atal pension yojna, national child labour protection scheme, aids to child and women labour etc (5) Codification of labour laws"

Answer 119

(1) International production sharing →production broken into activities + tasks carried out in different countries. (2) Acc to World Bank→ GVC = series of stages in the production→ Each stage adds value. eg- a bike assembled in France with parts from Germany, Italy, and Malaysia and exported to the Arab Republic of Egypt is a GVC. Note : supply chain = all parties in fulfilling a customer request → customer satisfaction, value chain = interrelated activities a company uses to create a competitive advantage."

Answer 120

(1) Multiple geographical locations→ countries working together→ globalization → Integration of the world economies. (2) Interdependency of the countries increase→ integration"

Answer 121

(1) Powerful driver of productivity + efficiency → country having specialities are involved (2) Access to international market increase (3) Diversification of export sector → number of products from diff countries increase (4) Following international standards →Quality + R&D + Technological Advancement (5) Improving Employment opportunities (6) Knowledge and ideas sharing"

Answer 122

(1) Upgradation of local companies (2) Diversification of skill sets of workers (3) Upgradation of Infrastructure→ Multimodal logistics, port facilities etc (4) Conditional FDI→ eg : incentive to foreign companies giving employment with environmental sustainability. (5) Simple taxation regime."

Answer 123

(1) Shifting of global manufacturing base→India emerging as hub (2) Low-cost labour + high class technology available (3) Dedicated focus towards EODB (4) Make in India mission + Start up India mission (5) Mega infra projects → sagarmal, setubhartam, freight villages, INSTC, asian highway project, Blue dots network and QUAD"

Answer 124

(1) GVC → Upgradation of infra→ policy reforms→ employment generation→ economic growth→ reduction of poverty. (1% increase in GVC participation → per-capita income increase by more than 1%) (2) Improved Firm level productivity→ improved profits→ improved tax collection (3) Interconnected regimes →build resilience, stability and flexibility in the production networks (4) To mark its presence in the global economic order eg: pharmaceutical sector → reducing dependence on China."

Answer 125

(1) Phases of industrial revolution ; (a) phase1→ mechanisation + water and steam power (b) phase2 →electricity + iron steel, rail lines (c) phase 3 → cyber systems + automation (d) phase4 → cyber physical systems. (2) Key elements → fusion of technologies ranging from the physical, digital to biological spheres. (3) Describes → growing trend of automation + data exchange in technology + processes within the manufacturing industry. (4) Four fundamental principles → (a) interconnection (b) information transparency (c) Technical assistance (d) decentralised decisions (5) Includes→ Internet of Things (IoT) + Industrial Internet of Things (IIoT) + Cyber-physical Systems (CPS) + Smart Manufacturing + Cloud Computing + Big Data + Robotics + Cognitive Computing + Artificial Intelligence."

Answer 126

(1) Technological revolution→fundamentally alter the way we live, work and relate to one another. (2) Technology→ almost all the sectors → Improves efficiency and effectiveness; eg 3D printing used for shoe manufacturing by adidas. (3) Protects→ environment→ achieving SDGs (4) Increase the volume+speed → accessibility (5) Alternative to physical workplaces → professional + personal life balance."

Answer 127

(1) Old pedagogy practices in schools colleges→ Lack of skilled personnel (2) Fear of job losses → semi skilled + unskilled workers discriminated (3) Income inequality + Gender inequality →digital resources limited to dominant sections. (4) Digital divide → accessibility restricted (5) Cyber attacks (6) 3D manufacturing →ethical issues ; eg-piracy because files can be easily copied (7) Poor funding for R&D→ indigenous base not developed→ dependence on foreign players."

Answer 128

(1) Promotion of investments in digital infrastructure. (2) National education systems → development of competencies in ICT and STEM (3) Capacity building programme→new skills (4) Competitive grants→R&D promotion (5) Regulatory frameworks → data protection (personal-BN srikrishna panel) + non personal data (Kris Gopalkrishna committee)"

Answer 129

(1) Demographic dividend + Presence of skilled workforce in IT→ can be tapped. (2) Fast growing market size →rise in investors confidence (3) New education policy specifically focussing on practicle knowledge (4) Digital India Mission → Improved Digital Infra (5) Tele-density ~ 93% and ~ 50 crore Indians →mobile phones. (6) MSME→ at forefront of 4IR→ Handholding by the government (7) Dedicated govt focus →Samarth udyog bharat 4.0"

Answer 130

1) Computerisation of land records (1988) → pilot project in 8 districts → resolve the issues of manual system 2) PESA 1996 → Gram Sabhas given power to regulate their land + resources → implementation of land reforms + land consolidation 3) Forests rights act 2006 → a) “title rights” on land to tribals b) “use rights” for minor forest produce c)“relief and development rights” for rehabilitation in case of eviction. 4) Digital India lands record modernisation programme → integrated land information management computerisation of land records + map digitisation. 5) Land acquisition act 2013 → higher compensation to those deprived of their land by govt (public + private) projects. 6) Model land leasing act 2016 → balance the needs of landlords and lease holder → bring in unproductive land to productive uses → recognising cultivators → provide credit 7) Swamitva yojna → mapping the land parcels in rural areas using drones. 8) Niti Ayog’s draft model land titles act 2019 → state guaranteed ownership. 9) ULPIN → unique land parcel identification number → link all property transactions"

Answer 131

1) huge land lying vacant under govt, eg – 2.35 lakh acre surplus land under 58 underperforming CPSUs 2) 2/3rd of all the pending cases in courts → property disputes ; Niti Ayog → 20 years = avg time to settle such cases 3) Recent agricultural census → size of operational landholding decreased since 1971 + fragmentation of land expected to rise. 4) Absence of nationwide template ie standardised national registry of land records."

Answer 132

1) Digitisation of land records eg- Bhoomi project (Karnataka) 2) Responsible legislations like Rajasthan’s urban land act which makes state as the guarantor of land titles 3) Distributing ceiling surplus lands → land reforms division to fix annual targets 4) Monetisation of govt wastelands 5) Consolidation of landholding → kerala, TN, Gujrat 6) Promoting cooperative farming 7) Leveraging technology → Andhra Pradesh using block chain technology to prevent property frauds."

Answer 133

1) Reforming the regulation of land → a) ownership b) rent/lease/sale/operations c) Inheritance 2) Redistribution of land from rich to poor. 3) Improving land tenure + institutional ecosystem."

Answer 134

1) Ensure redistributive justice → socio economic inequality 2) Develop system of peasant proprietorship → land belongs to tiller 3) India = agrarian economy → huge income inequalities → implement socialistic principles 4) Elimination of exploitation in land relations. 5) Increasing agriculture production + productivity"

Answer 135

Permanent settlement system b) Ryotwari system c)Mahalwari system 1) permanent settlement system = fixed land revenue to be paid by zamindar to company 2) ryotwari system = revenue to be paid by farmers/ryots 3) mahalwari system = revenue to be paid by whole village (mahals) note : British legislated laws → Rent act 1859, Tenancy and rent act 1885."

Answer 136

1) Ownership rights stayed with the zamindars 2) High peasant indebtness 3) Rise in peasant revolts. 4) Rise in socio-economic inequalities → small farmers + labourers → most vulnerable 5) Rise in food insecurity"

Answer 137

1) bhoodan and gramdan movements → Vinoba Bhave bhoodan = zamindars persuaded to gift their land to farmers gramdan = collective village living → villagers to vest their all ownership rights to gram sabha 2) Abolition of zamindari system → to remove intermediaries between state and actual cultivators 3) Land consolidation → to bring together small plots of fragmented land. 4) Tenancy reforms → to protect the tenants → regulation of rent + security of tenure + ownership rights 5) Land ceilings → fixing the maximum amount of land which individual/family can possess."

Answer 138

1) 2.5 cr farmers bought into direct relationship with the state 2) 61ha of land → distributed to landless farmers. 3) Large scale privately owned forests and wasteland → under state 4) Land consolidation → support to green revolution"

Answer 139

1) Landlordism abolished but “absentee landlordism” continued 2) Legislations not uniform; eg WB = uniform ceilings but Maharashtra, gujrat= different ceilings for different classes. 3) Poorly designed legislations → ceiling not decided on the basis of soil quality, population density, climate. 4) Poor enforcement mechanism → tenants denied of their rights 5) Large tracts of unused land under government. 6) Unclear titles → black money in real estate + benami property. note : Planning commission – “land reforms remain an unfinished business”"

Answer 140

(1) Process of unlocking the value of investment made in public assets. (2) Part of 3 pronged strategy a) DFI b) Monetising assets of public sector banks c) Increasing capital expenditure. (3) Budget 2021 → launched to assess the value of unutilised/underutilised govt assets (4) National asset monetisation plan → dashboard → tracking the progress + increase visibility to investors. (5) Niti Ayog to prepare the plan for FY21-24 (6) Target → raise 2.5 lakh crore."

Answer 141

(1) To give boost to infrastructure projects → potential brownfield infrastructure assets (2) Covid pandemic → increased spending + reduced revenue → borrowing increased by 2.3 times (3) Subdued private sector investments (4) Recommended by Vijay Kelkar committee on roadmap for fiscal consolidation (5) International experience → China, USA, France have effectively utilised this"

Answer 142

(1) Broader contours available (2) Transferring of assets to a trust (3) leasing / renting out of assets (4) Awarding of assets to private players. Eg → 150 passenger trains. (5) Leveraging InvITS + PPP models like tol-operate-transfer"

Answer 143

(1) NHAI operational toll roads (2) Oil and gas pipelines of GAIL, IOCL, HPCL (3) AAI airports in tier 2 and 3 cities (4) Railway infrastructure assets (5) Sports stadium (6) Warehousing assets of CPSEs."

Answer 144

(1) Driving investments in the economy (2) Higher public sector capital expenditure → multiplier effect → crowd in private investments. (3) Proceeds of this → can be used in fresh projects (4) India’s vision of $5 trillion economy"

Answer 145

(1) India = pharmacy of the world → supplies 50% of the global demand for vaccines. (2) Largest provider of generic drugs; 3rd largest in terms of volume. (3) Regulated → Drugs & cosmetics act1940; CDSCO = approval of new drugs, clinical trials, coordination."

Answer 146

(1) Footloose industry → independent of specific local resources. (2) Raw materials → proximity to petrochemical hubs or ports → inter industrial linkages (3) Proximity to market →reduced transportation cost (4) Capital availability (5) Skilled labour (6) Efficient transportation"

Answer 147

(1) High dependence on China for raw materials (APIs) (2) Lack of research components (3) Fragmented industry (4) Fake version of high value brands → spurious medicines → competitiveness hurt (5) Government policies like price capping, IPR policies → profits + investor confidence reduced (6) Marketing malpractices → nexus among pharma companies and doctors, misleading advertisements

Answer 148

(1) China facing shortage of raw material (2) Huge population and diversity → suited to clinical trials and indigenous medicines (3) Lifestyle diseases rising (4) Health insurance (penetration + density) increasing (5) Government focus → ayushman bharat, pharma vision, rashtriya arogya nidhi, national digital health policy, national digital health mission (NDHM) and National biopharma mission. (6) Medical tourism."

Answer 149

(1) India → supplier of medicines like hydroxychloroquine to USA (2) Development of “vaccine diplomacy” (3) Scope of R&D increased → private players participation boosted (4) Market expansion → domestic + external"

Answer 150

(1) Small scale raw material manufacturing units/incubators industry-academia tie ups (2) Integrating all the, medical systems → Ayush (3) Promoting ease of doing business, e-pharmacy, pharma parks (4) Developing “medical diplomacy”. (5) Implementing Maleshkar committee recommendations → strengthen state drug control organisations, setting national drug authority."

Answer 151

(1) Green revolution refers to the transformation of methods/operations in agriculture in order to boost the production and productivity with the introduction + development of HVY seeds. (2) Agricultural system converted = industrial system. (3) The three important components a) Irrigation facilities b) Chemical fertilizers c) Machines (4) Objectives: a) short term – to address India’s hunger crises b) long term – agricultural modernisation, industrial development and rural development. (5) Rice + Wheat = key crops in India’s green revolution."

Answer 152

(1) Seeds of green revolution → Mexico in 1960s (2) Term 'green revolution' was coined by William S. Gadd in 1968. But the father of GR = Norman e Borlaug (3) India specific → After independence → population rise, wars, inflation, poverty => food insecurity • PL 480 programme where India relied on USA for its food needs. • 1961-india on brink of mass famines • 1960s-beginning of green revolution in India."

Answer 153

(1) Rise in production + productivity → India = 'self-reliant' in food grain production. (2) Increased exports + reduced imports =>Reduced current account deficit. (3) Raised farm income + employment diversification => Better socio-economic outcomes in health and education sector. (4) Mechanisation and commercialisation of agriculture → Support to Industries => developing inter-industrial linkages. Food processing sector is the sunrise sector. (5) Regional development; especially the north-west India. (6) PDS-MSP-NFSA system started in later years to ensure food security"

Answer 154

(1) Reduced inter crop and intra crop diversity → nutrition rich crops (pulses, fruits and vegetables) lagged behind. (2) Regional inequalities rose → the western and eastern India. (3) Income inequalities rose; small and marginal farmers, landless labourers were at disadvantage. (4) Deterioration of natural resources a) depletion of groundwater (rise in uranium, arsenic and fluoride contamination (b) Soil erosion + land degradation (c)eutrophication (5) Environmental pollution due to stubble burning and delaying of sowing of kharif crops. (6) Health impacts → imbalanced use of chemicals (NPK) (a) disorders like methemoglobinemia (b)biomagnifications + bioaccumulation (c) rising cases of cancer in states like Punjab (7) Food mismanagement due to violation of buffer stock norms. Note: Economic survey 2019-2020 has pointed out – 'Agriculture growth is stagnant in last 6 years'"

Answer 155

(1) Diversification from farming to allied activities – livestock, fisheries, poultry and horticulture. (2) Focus on eastern region => bringing green revolution to eastern India (BGREI) (3) Implementing government schemes => krishnottiyojanaparamparagatkrishivikasyojna, mission for integrated development of horticulture rashtriyagokul mission. (4) Crop Diversification=> pulses, vegetables, fruits etc (5) Extension services and intensive farmers awareness programs (6) Field trials=> Innovative practices=>natural farming, zero budget farming, lee farming etc."

mgp cc - economics Flashcards

(183 cards)