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Economics 2022 Paper II 50 marks Highlight

Paper II — Q2

(a) Highlight the major features of National Income trend and its sectoral composition during the last five decades. (20…

(a)

Highlight the major features of National Income trend and its sectoral composition during the last five decades. 20 marks

(b)

Describe in brief the factors that led to the establishment of Reserve Bank of India (RBI) in the country. 15 marks

(c)

Discuss, how the green revolution has affected the indigenous crops in India? What measures have been initiated by the Government in the later years to improve the productivity? 15 marks

हिंदी में प्रश्न पढ़ें
(a)

विगत पांच दशकों में राष्ट्रीय आय की प्रवृत्ति तथा इसकी क्षेत्रीय संरचना की प्रमुख विशेषताओं को चिह्नांकित कीजिए । (20 अंक)

(b)

उन कारकों को संक्षेप में बताइये जिनके फलस्वरूप देश में भारतीय रिजर्व बैंक की स्थापना हुई । (15 अंक)

(c)

विवेचना कीजिए कि किस प्रकार हरित क्रांति ने भारत में देशज फसलों को प्रभावित किया है । उत्पादकता में सुधार हेतु, सरकार द्वारा बाद के वर्षों में कौन से उपाय शुरू किए गये हैं ? (15 अंक)

Q2 of the 2022 UPSC Mains Economics Paper II, as printed
The question as printed in the 2022 Economics paper
Evaluate your answer to this question → See all 2022 Economics questions

Model answer

Written by UPSC Answer Check against this question's marking rubric, to the expected length. UPSC does not publish answers for Mains — this is one way to score well, not an official key.

Part (a): National income trend and sectoral composition Over the last five decades, India’s national income trend shows a clear break from the low “Hindu rate of growth” of about 3.5 per cent in the pre-reform period to a faster, though uneven, expansion after the 1991 reforms. The major feature is not only rising GDP growth but a structural shift in sectoral composition: agriculture, which provided the base of income and employment, has steadily lost weight, while services have become the dominant engine of growth. In 1970-71, agriculture and allied activities accounted for about 44-45 per cent of GDP at constant prices, and the share was closer to half in the 1950s; today it is around 15 per cent. The tertiary sector, which was about 33 per cent in 1970-71, has risen to about 55 per cent, reflecting urbanisation, financial deepening, trade, transport and communication. Manufacturing has remained comparatively stagnant, hovering around 15-17 per cent, so the economy has moved from agriculture-led to services-led growth without a strong industrial middle. The trend is faster growth with persistent structural imbalance.

Part (b): Factors leading to RBI Before RBI, India lacked a central monetary authority. The colonial monetary system was fragmented, with multiple currency systems and provincial bank notes, and exchange-rate instability made trade and credit uncertain. The post-1919 boom and the 1929 depression exposed the absence of a lender of last resort and a coherent policy for bank notes, credit and foreign exchange. The need for a central bank also became urgent because commercial banks were not coordinated and currency issuance was not under a single authority. It also had to coordinate discount rates, rediscounting and reserve requirements, functions previously dispersed among the government and private banks. The Hilton Young Commission of 1926 examined these weaknesses and recommended the establishment of a central bank to issue currency, manage reserves and stabilise the rupee. On this basis the RBI Act was enacted in 1934, and the Reserve Bank of India commenced operations on 1 April 1935. Initially it was a shareholders’ bank, but after independence it was nationalised in 1949, making it a public institution responsible for monetary stability, banking supervision and development finance. This centralisation was essential for managing inflation, liquidity and the external value of the rupee.

Part (c): Green revolution, indigenous crops and productivity measures The Green Revolution, centred on high-yielding varieties of wheat and rice, improved foodgrain output but also affected indigenous crops. It displaced traditional millets such as jowar, bajra and ragi, and reduced the area of pulses and oilseeds, leading to a loss of crop diversity. Because the new varieties were concentrated in irrigated regions, they reinforced monoculture and created ecological concerns, especially water depletion and soil degradation. In later years, the Government has tried to improve productivity while correcting these imbalances. The National Food Security Mission, launched in 2007, focuses on rice, wheat and pulses to narrow yield gaps, while separate oilseeds missions address oilseed productivity. Rashtriya Krishi Vikas Yojana supports state-level crop diversification and productivity enhancement. Promotion of millets as nutri-cereals, organic farming initiatives and crop diversification programmes aim to restore indigenous crops and sustainable farming. Crop diversification programmes also encourage locally adapted varieties suited to rain-fed and dryland conditions. PM-KISAN, though not a direct productivity measure, provides indirect liquidity support to farmers, enabling investment in inputs and risk management.

Thus, the way forward is to pair faster growth with a stronger manufacturing base, and in agriculture to combine productivity with ecological and nutritional balance. A balanced strategy should therefore strengthen industry, stabilise financial policy, and make agriculture more productive, climate-resilient and nutrition-oriented.

What "Highlight" is asking you to do

Bring the notable features of the named material forward and make their weight visible — what each feature is, and what gives it importance. Highlight expects substantive coverage of the features, not a thin selection from them.

Structure that answers it

The material and what makes a feature notable within it → feature, with the point that gives it weight → the same for each further feature → the composite picture they form

Where marks are lost

Naming features flatly as a list and never showing why any one of them signifies.

All UPSC directive words, compared →

How this answer will be evaluated

Approach

Framework: UPSC Economics Paper II. (a) highlight: name the salient points > one line of substance each > close | (b) describe: define > structure or process in order > labelled diagram > significance | (c) discuss: intro > 3-4 dimensions > example > balanced close Full marks: Comprehensive, data-driven, with specific policy references and clear structural analysis.

Key points expected

  • Trend of National Income growth (e.g., 1950-2020)
  • Sectoral composition: Primary, Secondary, Tertiary shares
  • Structural transformation: shift from agriculture to services
  • Key phases: pre-liberalization vs post-1991 growth
  • Inadequacy of the Imperial Bank of India (1921)
  • Need for a central bank for currency management
  • Recommendations of the Hilton Young Commission (1926)
  • Role of the RBI Act, 1934

Evaluation rubric

Each sub-part is marked on its own, against the marks and word limit printed on the paper.

  1. (a) Salient points of National Income trend and sectoral composition over 5 decades. 20 marks

    highlight— name the salient points → one line of substance each → close

    Must cover

    • Trend of National Income growth (e.g., 1950-2020)
    • Sectoral composition: Primary, Secondary, Tertiary shares
    • Structural transformation: shift from agriculture to services
    • Key phases: pre-liberalization vs post-1991 growth

    Loses marks

    • Listing sectors without discussing their changing shares
    • Ignoring the 'trend' aspect (static description only)
    • Confusing National Income with GSDP

    Earns more

    • Reference to specific 5-year plans or policy shifts
    • Mention of 'Hindu rate of growth' vs post-reform growth
    • Data on per capita income trends
    • Reference to NSSO or RBI data sources

    Extra mark

    • Specific growth rate figures for key decades
    • Reference to specific economic surveys
  2. (b) Factors leading to the establishment of the Reserve Bank of India (RBI). 15 marks

    describe— define → structure or process in order → labelled diagram → significance

    Must cover

    • Inadequacy of the Imperial Bank of India (1921)
    • Need for a central bank for currency management
    • Recommendations of the Hilton Young Commission (1926)
    • Role of the RBI Act, 1934

    Loses marks

    • Confusing RBI establishment with nationalization
    • Failing to mention the Imperial Bank of India
    • Vague statements without specific commissions or acts

    Earns more

    • Mention of the 1935 establishment date
    • Reference to the transfer of currency issue from Government
    • Mention of the 1949 nationalization of RBI

    Extra mark

    • Specific quote from Hilton Young Commission
    • Reference to the specific section of RBI Act 1934
  3. (c) Impact of Green Revolution on indigenous crops and government measures for productivity. 15 marks

    discuss— intro → 3-4 dimensions → example → balanced close

    Must cover

    • Decline in area and production of indigenous crops (e.g., millets, pulses)
    • Shift to high-yielding varieties (HYVs) of wheat and rice
    • Government measures: Mission for Development of Millets (2023)
    • Promotion of organic farming and sustainable agriculture

    Loses marks

    • Failing to link Green Revolution to the decline of indigenous crops
    • Listing measures without connecting them to productivity improvement
    • Ignoring the 'indigenous crops' aspect of the question

    Earns more

    • Mention of specific indigenous crops (e.g., bajra, jowar, ragi)
    • Reference to the 'Shree Anna' campaign
    • Mention of the National Food Security Mission (NFSM)
    • Reference to the 2023 International Year of Millets

    Extra mark

    • Specific data on decline in millet production
    • Reference to specific state-level initiatives

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