Q7
(a) Critically examine the various poverty alleviation programmes in India since 1970's. (20 marks) (b) Differentiate between Current Account convertibility and Capital Account convertibility. What were the pre-conditions recommended by Tarapore Committee-I for adopting Capital Account convertibility. (15 marks) (c) Describe the main features of Monetary Policy, 2022. How far the objectives of this policy differ from the previous monetary policy? (15 marks)
हिंदी में प्रश्न पढ़ें
(a) वर्ष 1970 के बाद से, भारत में विभिन्न गरीबी निवारण कार्यक्रमों की आलोचनात्मक समीक्षा कीजिए । (20 अंक) (b) चालू खाता परिवर्तनीयता तथा पूंजी खाता परिवर्तनीयता में भेद कीजिए । तारापोर समिति-I द्वारा पूंजी खाता परिवर्तनीयता को अपनाने के लिए किन पूर्व-शर्तों की अनुशंसा की गई थी ? (15 अंक) (c) मौद्रिक नीति 2022 की प्रमुख विशेषताओं का वर्णन कीजिए । इस नीति के उद्देश्य पूर्ववर्ती मौद्रिक नीति से किस सीमा तक भिन्न हैं ? (15 अंक)
Directive word: Critically examine
This question asks you to critically examine. 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
The directive 'critically examine' for part (a) demands balanced analysis with judgment, while parts (b) and (c) require differentiation and description respectively. Allocate approximately 40% of time/words to part (a) given its 20 marks, and roughly 30% each to parts (b) and (c). Structure with a brief integrated introduction, three distinct sections for each sub-part with clear sub-headings, and a concluding synthesis on India's evolving economic policy framework.
Key points expected
- Part (a): Evolution from IRDP (1970s) to NREGA (2005) and NFSA (2013); critique of targeting errors, leakages, and graduation failure; comparison of wage vs. self-employment programmes; mention of Tendulkar vs. Rangarajan poverty line debates
- Part (b): Clear distinction between current account (trade in goods/services, income transfers) and capital account (FDI, FPI, external borrowing) convertibility; Tarapore-I pre-conditions: fiscal deficit reduction, inflation control, NPA reduction, forex reserves adequacy, financial sector reforms
- Part (c): Features of MPC's 2022 policy: repo rate hikes, stance change from accommodative to neutral to withdrawal of accommodation, inflation targeting amid supply shocks; comparison with 2016-2020 liquidity surplus era and COVID-era unconventional measures
- Critical analysis of why CAC remains partial in India despite 1997 Tarapore recommendations; connection between poverty programmes and financial inclusion for monetary policy transmission
- Empirical evidence: NREGA wage-productivity gap, capital flight during 2013 taper tantrum, inflation targeting success/failure post-2016 MPC framework
Evaluation rubric
| Dimension | Weight | Max marks | Excellent | Average | Poor |
|---|---|---|---|---|---|
| Concept correctness | 25% | 12.5 | Precise definitions: distinguishes Garibi Hatao from later targeted programmes; correctly identifies CAC as freedom for capital mobility vs. CAC as trade-related; accurately describes flexible inflation targeting (FIT) framework and 4% CPI target with ±2% band; no confusion between repo and reverse repo | Basic programme identification with some chronological errors; vague distinction between current and capital account; general awareness of RBI rate hikes without FIT specifics | Confuses IRDP with NREGA; treats CAC and CAC as identical; describes 2022 policy as purely expansionary without recognizing tightening cycle; fundamental misunderstanding of convertibility concepts |
| Diagram / model | 10% | 5 | Uses Phillips curve to show inflation-unemployment trade-off in monetary policy context; draws Mundell-Fleming model to illustrate impossible trinity constraints for CAC; poverty trap diagram for part (a) | Simple flowchart of monetary policy transmission; basic diagram of balance of payments components | No diagrams where appropriate; or irrelevant diagrams (e.g., demand-supply for goods market in monetary policy question) |
| Quantitative reasoning | 15% | 7.5 | Cites specific data: poverty ratio decline from 55% (1974) to ~10% (2011-12, Tendulkar) or 21.9% (Rangarajan); forex reserves position ($600bn+ buffer); repo rate trajectory 4% to 6.5%; fiscal deficit targets from FRBM; NREGA coverage ~15 crore households | Round-figure estimates for poverty reduction; general mention of inflation above 6% target; vague reference to 'adequate' reserves | No quantitative data; or invented statistics; confuses millions with crores; wrong units for forex reserves |
| Indian / empirical examples | 25% | 12.5 | For (a): cites SEWA, Kudumbashree, or MGNREGA's Kerala vs. Bihar implementation variance; for (b): references 1991 BoP crisis, 2013 taper tantrum, or 2022 rupee depreciation; for (c): specific MPC decisions (April 2022 first hike, December 2022 stance change) | Generic mention of NREGA success stories; general reference to 1991 reforms; awareness that rates rose in 2022 without specific meetings | No Indian examples; uses developed country cases (US Fed policy) without Indian adaptation; or anachronistic references (e.g., planning commission in current context) |
| Policy implication | 25% | 12.5 | Synthesizes across parts: argues universal basic income as poverty programme successor given CAC constraints; discusses how monetary tightening 2022 affected MGNREGA real wages; evaluates whether Tarapore pre-conditions are now met for fuller CAC; recommends DBT integration with JAM trinity for leakage reduction | Separate policy conclusions for each part without integration; standard recommendations (better implementation, more funding) | No forward-looking policy recommendations; or unrealistic suggestions (immediate full CAC); purely descriptive without evaluative judgment |
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