Economics 2023 Paper II 50 marks Discuss

Q6

(a) Discuss the characteristic features of Agreement on Agriculture (AOA) under Uruguay Round of GATT and examine its impact on Indian agriculture. (20 marks) (b) State the key features of the Targeted Public Distribution System (TPDS) in India. Do you believe that TPDS has been successful in achieving its objectives? Justify your answer. (15 marks) (c) State the salient features of the Foreign Exchange Management Act (FEMA), 1999 in India. To what extent it deviates from the Foreign Exchange Regulation Act (FERA), 1979? (15 marks)

हिंदी में प्रश्न पढ़ें

(a) गैट के उरुग्वे दौर के तहत, कृषि-आधारित समझौते (ए० ओ० ए०) की प्रमुख विशेषताओं की व्याख्या कीजिए तथा भारतीय कृषि पर पड़ने वाले इसके प्रभावों का परीक्षण कीजिए। (20 अंक) (b) भारत में लक्षित सार्वजनिक वितरण प्रणाली (टी० पी० डी० एस०) की प्रमुख विशेषताओं को बताइए। क्या आपको विश्वास है कि टी० पी० डी० एस० ने निहित उद्देश्यों को सफलतापूर्वक प्राप्त कर लिया है? अपने उत्तर को उचित सिद्ध कीजिए। (15 अंक) (c) भारत में विदेशी विनिमय प्रबंधन कानून (फेमा), 1999 की प्रमुख विशेषताओं को लिखिए। विदेशी विनिमय विनियमन कानून (फेरा), 1979 से यह किस प्रकार भिन्न है? (15 अंक)

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Directive word: Discuss

This question asks you to discuss. 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 'discuss' in part (a) demands a balanced exposition of AOA features followed by critical examination of impacts, while parts (b) and (c) require 'state' and analytical depth respectively. Allocate approximately 40% of time/words to part (a) given its 20 marks, with ~30% each to parts (b) and (c). Structure with a brief integrated introduction, three distinct sections for each sub-part with internal analysis, and a concluding synthesis on India's evolving economic governance framework.

Key points expected

  • Part (a): Three pillars of AOA—domestic support (Amber/Blue/Green Box classification), market access (tariffication and tariff bindings), and export subsidies (reduction commitments); specific impact on Indian agriculture including MSP constraints, import surge vulnerabilities, and food security concerns
  • Part (b): TPDS features—targeting via BPL/APL categories, dual pricing, ration card system, and decentralised procurement; evaluation against objectives of poverty alleviation, price stabilisation, and nutritional security with evidence on inclusion/exclusion errors
  • Part (c): FEMA 1999 features—facilitation over regulation, current account convertibility, delegated legislation to RBI, and civil offence framework; deviation from FERA 1979—criminal to civil penalties, presumption of innocence, removal of draconian imprisonment provisions, and shift from conservation to management philosophy
  • Critical analysis of AOA's asymmetry: developed countries' Green Box exploitation vs. India's Amber Box constraints under de minimis limits
  • TPDS effectiveness assessment with empirical reference to Shanta Kumar Committee findings, NFSA 2013 reforms, and Aadhaar integration outcomes
  • FEMA's regulatory philosophy shift contextualised with post-1991 BoP crisis lessons and India's forex reserve accumulation trajectory

Evaluation rubric

DimensionWeightMax marksExcellentAveragePoor
Concept correctness25%12.5Precise delineation of AOA's three pillars with correct Box classifications; accurate distinction between BPL/APL/AAY under TPDS; exact understanding of FEMA's current vs. capital account provisions and correct identification of FERA's Section 5(1)(e) restrictions versus FEMA's Section 5 liberalisationBroadly correct identification of AOA pillars but confused Box categories; generic description of PDS without TPDS-specific targeting mechanism; superficial awareness of FEMA-FERA difference limited to 'civil vs. criminal' without substantive provisionsConflation of AOA with AoA (Agreement on Textiles); treating TPDS as identical to universal PDS; stating FEMA increased restrictions or confusing it with FEMA 1973 (Foreign Exchange Management Act of different vintage)
Diagram / model10%5Appropriate use of Amber Box domestic support reduction schedule diagram for part (a); TPDS targeting funnel diagram showing exclusion/inclusion errors for part (b); forex reserve adequacy metrics (import cover, short-term debt ratio) for part (c)Basic tariffication diagram for AOA without Box classifications; simple flowchart of PDS supply chain without analytical focus; rudimentary comparison table of FERA-FERA featuresNo diagrams where appropriate, or irrelevant diagrams (e.g., Laffer curve, Phillips curve) forcibly inserted; incorrect labelling of axes or misrepresentation of WTO commitment schedules
Quantitative reasoning15%7.5Specific figures: AOA domestic support de minimis thresholds (10% of agricultural production value); India's bound vs. applied tariff gaps; TPDS coverage statistics (75% rural/50% urban under NFSA); forex reserve trajectory ($40bn in 1998 to $600bn+ current); FERA conviction rates vs. FEMA compounding statisticsRounded approximation of WTO commitment percentages; general awareness of TPDS beneficiary numbers without precision; vague reference to 'forex reserves increased' without magnitude or timelineInvented statistics or orders of magnitude errors (e.g., stating AOA requires 50% tariff reduction for all products); confusing lakh crore with million/billion; anachronistic data (pre-1991 figures for FEMA analysis)
Indian / empirical examples25%12.5For (a): Indo-US cotton dispute, sugar export subsidies WTO challenge, and India's food security reservation at Bali/Nairobi; For (b): Shanta Kumar Committee (2015) findings on 46% leakages, Jharkhand's PDS reforms, Delhi doorstep delivery pilot; For (c): 1991 BoP crisis context, 1997 Asian contagion impact on FEMA drafting, RBI's Master Directions under FEMAGeneric reference to 'farmer suicides' without AOA linkage; mention of Aadhaar in PDS without specific outcomes; awareness of 1991 reforms without connecting to FERA's obsolescenceExamples from wrong jurisdictions (EU's CAP for AOA analysis, US SNAP for TPDS); anachronistic references (FERA 1973 instead of 1973 Act's 1974 enforcement); irrelevant examples (GST, demonetisation) without establishing logical connection
Policy implication25%12.5For (a): Strategic recommendations on Green Box expansion (PM-KISAN, PMFBY), peace clause utilisation, and Cairns Group positioning; For (b): Policy synthesis on DBT feasibility, fortification integration, and One Nation One Ration Card federal coordination; For (c): Forward-looking analysis on FEMA's adequacy for capital account convertibility, cryptocurrency regulation gaps, and IFSCA framework harmonisationStandard reform suggestions without prioritisation (e.g., 'government should reduce leakages'); generic statement that FEMA needs updating without specifying domains; disconnected laundry list of recommendations across partsPolicy prescriptions contradicting the question's premises (e.g., advocating India's withdrawal from WTO); unrealistic suggestions (universal cash transfer without fiscal costing); regressive recommendations (reverting to FERA-style criminal penalties)

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