Economics 2022 Paper II 50 marks 150 words Compulsory Critically analyse

Q5

Answer the following questions in about 150 words each: (a) Do you think that Indian development planning is a transition from centralised planning to indicative planning and subsequently to market based development? Explain. (10 marks) (b) Discuss the prospects and challenges faced by Indian Agriculture due to World Trade Organisation (WTO) provisions. (10 marks) (c) Analyse the challenges for economic recovery in India posed by sluggish growth in rural wage rates during the pandemic period. (10 marks) (d) Do you think that flow of Foreign Direct Investment (FDI) would always be good for the growth of Indian economy? Critically analyse. (10 marks) (e) Discuss the desirability of increased public expenditure in India in recent years. (10 marks)

हिंदी में प्रश्न पढ़ें

निम्नलिखित में से प्रत्येक प्रश्न का उत्तर लगभग 150 शब्दों में लिखिए : (a) आपके मत में, क्या भारत का विकास आयोजन केन्द्रीकृत आयोजन से सांकेतिक आयोजन, तत्पश्चात् बाजार-आधारित विकास की ओर संक्रमण है ? स्पष्ट कीजिए। (10 अंक) (b) विश्व व्यापार संगठन के प्रावधानों के कारण, भारतीय कृषि पर पड़ने वाले प्रभावों की संभावनाओं तथा चुनौतियों की विवेचना कीजिए। (10 अंक) (c) भारत में महामारी की अवधि में ग्रामीण मजदूरी-दरों में धीमी वृद्धि के कारण, आर्थिक पुनरुत्थान की चुनौतियों का विश्लेषण कीजिए। (10 अंक) (d) क्या आपको लगता है कि विदेशी प्रत्यक्ष निवेश का प्रवाह भारतीय अर्थव्यवस्था के विकास के लिए सदैव अच्छा होगा ? आलोचनात्मक विश्लेषण कीजिए। (10 अंक) (e) हाल के वर्षों में, भारत में और अधिक सार्वजनिक व्यय करने की वांछनीयता की विवेचना कीजिए। (10 अंक)

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Directive word: Critically analyse

This question asks you to critically analyse. The directive word signals the depth of analysis expected, the structure of your answer, and the weight of evidence you must bring.

See our UPSC directive words guide for a full breakdown of how to respond to each command word.

How this answer will be evaluated

Approach

Critically analyse demands balanced argumentation with evidence. Allocate ~30 words per sub-part (150 words each): for (a) trace planning evolution from Second Five Year Plan to NITI Aayog; for (b) contrast AoA benefits vs. subsidy caps; for (c) link rural wage data to consumption demand; for (d) weigh FDI inflows against crowding-out and profit repatriation; for (e) assess fiscal stimulus versus debt sustainability. Conclude each part with a nuanced judgment.

Key points expected

  • (a) Distinguish centralized planning (1950s-80s), indicative planning (1991-2014), and market-based development post-NITI Aayog 2015, citing plan holiday and liberalization markers
  • (b) Explain WTO Agreement on Agriculture prospects (market access) versus challenges (AMS limits, de minimis 10% cap, Blue Box restrictions) for Indian farmers
  • (c) Connect sluggish rural wage growth (MGNREGA wage stagnation, agricultural real wage decline 2020-21) to depressed rural demand and consumption-led recovery constraints
  • (d) Critically evaluate FDI benefits (technology transfer, employment) against costs (profit repatriation, crowding out domestic MSMEs, sectoral imbalances)
  • (e) Assess desirability through Keynesian multiplier effects versus Ricardian equivalence concerns, citing post-COVID fiscal expansion and FRBM targets
  • (a) Mention dismantling of Planning Commission 2014 as structural break in planning philosophy
  • (c) Reference Periodic Labour Force Survey (PLFS) data on rural wage trends during pandemic
  • (d) Cite sector-specific FDI patterns: 100% automatic route in some sectors versus restricted multi-brand retail

Evaluation rubric

DimensionWeightMax marksExcellentAveragePoor
Concept correctness25%12.5Precisely defines indicative planning, AoA provisions, rural wage-consumption nexus, FDI crowding-out, and fiscal multipliers; correctly identifies NITI Aayog's role, de minimis limits, and FRBM constraints without conceptual conflationBroadly understands planning transition and WTO basics but confuses AMS with aggregate measures or misstates NITI Aayog's binding nature; treats FDI benefits uncriticallyConflates centralized and indicative planning; misunderstands WTO subsidy classifications; presents FDI as unambiguously positive; confuses revenue and capital expenditure
Diagram / model10%5Uses AD-AS framework for (c) rural demand shock, Linder hypothesis or product cycle for (d) FDI technology transfer, or Harrod-Domar growth model for (e) public investment-growth linkage where space permitsMentions models without clear application; draws generic investment-growth relationship without specifying mechanismNo diagrammatic representation; misapplies models (e.g., Phillips curve for structural unemployment)
Quantitative reasoning15%7.5Cites specific figures: MGNREGA wage index trends, FDI inflows as % of GDP (2.5-3%), fiscal deficit targets (6.4% BE 2022-23), or agricultural support values near AMS limits ($17.6 bn notified)Uses approximate ranges without precision; mentions 'high fiscal deficit' without benchmark comparisonNo quantitative backing; makes unsupported claims about wage stagnation or FDI scale
Indian / empirical examples25%12.5Deploys specific evidence: NITI Aayog's SDG India Index, India's Peace Clause usage at WTO, PLFS rural wage data 2019-21, FDI equity inflows sectoral breakdown (services vs manufacturing), PM-KISAN as countercyclical expenditureReferences generic 'green revolution' or 'liberalization 1991' without specificity; mentions MGNREGA without wage dataNo Indian examples; relies on hypothetical cases or foreign illustrations (China FDI model)
Policy implication25%12.5Derives actionable insights: need for decentralized planning under NITI Aayog, demand for Special Safeguard Mechanism at WTO, MGNREGA wage-productivity linkage, FDI screening in sensitive sectors, and countercyclical fiscal rules with debt-GSDP targetsStates obvious recommendations ('increase investment') without institutional mechanism; proposes unrealistic solutionsNo policy conclusions; ends with descriptive summary or normative platitudes without implementation pathway

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