All 8 questions from UPSC Civil Services Mains Economics 2024 Paper II (400 marks total). Every stem reproduced in full, with directive-word analysis, marks, word limits, and answer-approach pointers.
8Questions
400Total marks
2024Year
Paper IIPaper
Topics covered
Economic history and contemporary schemes (1)Unemployment, development strategy and industrial history (1)MSMEs, national income growth and industrialisation (1)Fiscal policy, farmers and corporate sector, TRIMS (1)Planning models, growth patterns, FDI and poverty (1)Foreign investment, exports and second green revolution (1)Fiscal federalism, women in agriculture, rural poverty (1)Monetary policy, agricultural credit and subsidies (1)
A
Q1
50M150wCompulsorydiscussEconomic history and contemporary schemes
Answer the following questions in about 150 words each:
(a) Mention the items of 'Economic Drain' from India as conceived by Dadabhai Naoroji. (10 marks)
(b) Discuss why the railway system developed by the East India Company went against the Indian interest. (10 marks)
(c) Discuss why 'Laissez Faire' was not good for India during the pre-independence India. (10 marks)
(d) Describe why farmers derived little benefits from the commercialisation of agriculture in pre-independence India. (10 marks)
(e) What are the implications of "PM-Kisan Samman Nidhi" scheme ? (10 marks)
हिंदी में पढ़ें
निम्नलिखित में से प्रत्येक प्रश्न का उत्तर लगभग 150 शब्दों में लिखिए :
(क) दादाभाई नौरोजी द्वारा विचारित भारत से 'आर्थिक निकास' (Economic Drain) की अवधारणा में सम्मिलित मदों का उल्लेख कीजिए । (10 अंक)
(ख) विवेचना कीजिए कि ईस्ट इंडिया कंपनी के द्वारा विकसित रेलवे व्यवस्था क्यों भारत के हितों के विरुद्ध गयी । (10 अंक)
(ग) विवेचना कीजिए कि स्वतंत्रता-पूर्व भारत में अहस्तक्षेप नीति भारत के लिए क्यों अच्छी नहीं थी । (10 अंक)
(घ) वर्णन कीजिए कि स्वतंत्रता-पूर्व भारत में कृषि के वाणिज्यीकरण से किसानों को क्यों अल्प लाभ ही प्राप्त हुआ । (10 अंक)
(ङ) "पी. एम. किसान-सम्मान निधि" योजना के क्या निहितार्थ हैं ? (10 अंक)
Answer approach & key points
Framework: UPSC Economic History & Policy Analysis. (a) highlight: name the salient points > one line of substance each > close | (b) discuss: intro > 3-4 dimensions > example > balanced close | (c) discuss: intro > 3-4 dimensions > example > balanced close | (d) describe: define > structure or process in order > labelled diagram > significance | (e) analyse: intro > causes > effects > stakeholders/linkages > way forward Full marks: Precise, specific, and analytical; uses correct terminology and historical context.
Drain defined as unrequited transfer of wealth from India to Britain (Poverty and Un-British Rule in India, 1901)
Home Charges: interest on public debt raised in England, India Office expenses, pensions and furlough pay, military charges and stores
Private remittances: savings and salaries of British officials, profits and dividends of British firms, guaranteed interest on railway capital
Naoroji's estimates (about £8 million in 1867, £12 million in 1870, Rs 25 crore in 1893, Rs 51.5 crore in 1905) and effects on capital formation
Guarantee system (1849): 5% guaranteed interest paid from Indian revenue regardless of profit, encouraging waste
Route and freight design served ports, raw-material exports and British manufactures, not internal integration
Equipment, rails and engines imported; weak backward linkages; few Indians in skilled jobs
Accelerated de-industrialisation and commercialisation, drain of interest payments; balanced note on later benefits (famine relief, market integration)
One-way free trade: British goods entered freely while Indian goods faced duties in Britain; no protection for infant industries
De-industrialisation and ruralisation of the workforce
Non-intervention in famines, credit, irrigation and technical education
Contrast with state-led development (Japan, Germany); discriminating protection only from 1923
Forced commercialisation: cash needed to pay high land revenue and debts, not response to price incentives
Middlemen, moneylenders and traders captured most gains; dadni/advance system, indigo coercion
Exposure to world price volatility (cotton boom–bust after 1865, Depression 1929) and indebtedness, land alienation
Shift from food crops reduced food security; small fragmented holdings and no investment in technology
Design: ₹6,000 a year in three instalments by DBT to landholding farmer families (launched February 2019); scale (about 9.4 crore farmers, 23rd instalment June 2026; over ₹4.4 lakh crore disbursed)
50MexplainUnemployment, development strategy and industrial history
(a) What schemes are launched by the Government to deal with the problem of unemployment in India ? Why the problem still persists ? (20 marks)
(b) Why the Mahalanobis strategy of development was abandoned ? What were its inadequacies ? (15 marks)
(c) Explain the problems faced by the Jute industry during pre-independence India. Why the problem aggravated after partition of the country ? (15 marks)
हिंदी में पढ़ें
(क) भारत में बेरोजगारी की समस्या के निराकरण हेतु सरकार ने किन योजनाओं को शुरू किया है ? यह समस्या अभी भी क्यों बनी हुई है ? (20 अंक)
(ख) विकास की महालनोबिस रणनीति का क्यों परित्याग कर दिया गया ? इस रणनीति की क्या अपर्याप्तताएं थीं ? (15 अंक)
(ग) भारत में स्वतंत्रता-पूर्व, जूट उद्योग द्वारा सामना किये गये समस्याओं को समझाइए । देश के बंटवारे के पश्चात् यह समस्या क्यों और गंभीर हो गयी ? (15 अंक)
Answer approach & key points
Framework: UPSC Economics Paper II. (a) explain: definition/context > points in order > small example > short close | (b) critique: the claim > its strengths > its weaknesses > your judgment | (c) explain: definition/context > points in order > small example > short close Full marks: Precise scheme names, clear structural analysis, and specific historical context for Jute.
Rural wage employment: MGNREGA (100 days), now succeeded by the VB-G RAM G Act, 2025 (125 days, from 1 July 2026)
Self-employment and skills: PMEGP, MUDRA, Stand-Up/Start-up India, PMKVY/Skill India, DAY-NRLM, DDU-GKY, PM SVANidhi
Formal job creation: Employment Linked Incentive (PM Viksit Bharat Rozgar Yojana), PM Internship Scheme, PLI, National Career Service
Strategy: two/four-sector model, priority to capital goods and heavy industry in the Second Plan, public sector, import substitution
Inadequacies: neglect of agriculture and wage goods, food shortages and inflation; low employment absorption; foreign exchange crisis; inefficient PSUs and licence raj
Abandonment: mid-1960s crises (wars, droughts, 1966 devaluation, plan holiday), shift to Green Revolution; 1980s partial liberalisation; 1991 reforms
Balanced note on achievements: industrial base, capital goods capacity, technical institutions
Pre-independence: British managing agency control, dependence on exports, price fluctuations, Depression-era overcapacity and short-time working, poor wages and labour conditions
Raw jute growers exploited by middlemen and advance systems
Partition: about 80% of raw-jute area went to East Pakistan while all the mills stayed in India, causing raw material shortage and price rise
Further effects: competition from Pakistani mills later, loss of markets to synthetic substitutes; policy response (expansion of jute acreage in India, Jute Corporation)
50MhighlightMSMEs, national income growth and industrialisation
(a) Highlight the role of MSMEs in Indian Economy. What steps have been taken by the Government to enhance its contribution ? (20 marks)
(b) Describe the trend in the growth rate of national income in India from 1950 to 1980 and its impact on poverty. (15 marks)
(c) Discuss the inadequacies in the process of industrialisation in the pre-liberalised India. (15 marks)
हिंदी में पढ़ें
(क) भारतीय अर्थव्यवस्था में एम एस एम ई (सूक्ष्म, लघु, मध्यम उद्यमों) की भूमिका पर प्रकाश डालिए । इसके योगदान को बढ़ाने के लिए सरकार ने कौन से कदम उठाये हैं ? (20 अंक)
(ख) वर्ष 1950 से 1980 के दौरान भारत में राष्ट्रीय आय की वृद्धि-दर की प्रवृत्ति तथा इसका गरीबी पर पड़ने वाले प्रभाव की विवेचना कीजिए । (15 अंक)
(ग) उदारीकरण से पूर्व भारत में औद्योगीकरण की प्रक्रिया में अपर्याप्तताओं का वर्णन कीजिए । (15 अंक)
Answer approach & key points
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: Precise data, specific policy names, and clear logical flow.
Role: about 30% of GVA, about 45% of exports, large non-farm employment, dispersal of industry, linkages with large firms, entrepreneurship
Steps: Udyam registration and revised definitions (2020; limits raised in Budget 2025-26), CGTMSE and enhanced guarantee cover, MUDRA, PMEGP, TReDS and 45-day payment rule (s.43B(h)), MSME Samadhaan, RAMP, PM Vishwakarma, ZED, ECLGS during COVID
Assessment: effect of measures and remaining gaps
Growth about 3.5% a year (Hindu rate), per capita about 1.3%; plan-wise variation (1950s higher, 1960s crises, 1970s volatile)
Structural change: falling share of agriculture, rising industry and services
Poverty: headcount stayed around 50% (e.g., 54.9% in 1973–74, 51.3% in 1977–78); absolute numbers rose
Reasons: slow growth, population growth, agricultural dependence and harvest fluctuations (Ahluwalia 1978: no trend in rural poverty), inequality, limited trickle-down; shift to direct anti-poverty programmes in the 1970s
Heavy-industry, capital-intensive bias with low employment absorption
50MdiscussFiscal policy, farmers and corporate sector, TRIMS
(a) Discuss the changes made by the Government of India in the fiscal policy since liberalisation. How far these changes proved to be conducive to growth with social justice in the country ? Discuss. (20 marks)
(b) For faster increase in farmers' income, is it necessary to link them with corporate sector in India ? Discuss. (15 marks)
(c) What are the main features of 'TRIMS' ? How does it act against India's interest ? (15 marks)
हिंदी में पढ़ें
(क) उदारीकरण के उपरान्त, भारत सरकार द्वारा राजकोषीय नीति में किए गए परिवर्तनों की व्याख्या कीजिए । किस सीमा तक ये परिवर्तन देश में सामाजिक न्याय के साथ संवृद्धि में सहायक सिद्ध हुए हैं ? विवेचना कीजिए । (20 अंक)
(ख) भारत में किसानों की आय में तीव्रतर वृद्धि हेतु क्या उनको निगमित क्षेत्र से जोड़ा जाना आवश्यक है ? विवेचना कीजिए । (15 अंक)
(ग) 'ट्रिम्स' की प्रमुख विशेषताएं क्या हैं ? यह किस प्रकार भारत के हितों के विरुद्ध कार्य करता है ? (15 अंक)
Answer approach & key points
Framework: UPSC Economics Paper II Rubric. (a) discuss: intro > 3-4 dimensions > example > balanced close | (b) discuss: intro > 3-4 dimensions > example > balanced close | (c) explain: definition/context > points in order > small example > short close Full marks: Comprehensive analysis with data, balanced arguments, and clear policy implications.
Consolidation: FRBM Act 2003 and 2018 amendment (3% fiscal deficit, 40% central debt), post-COVID glide path to 4.5% by 2025-26, shift to a debt-to-GDP anchor
Tax reforms: rate rationalisation, corporate tax cut (2019), GST (2017) and GST rate rationalisation (2025), new personal tax regime and Income-tax Act 2025; widening base, digitisation
Expenditure: subsidy rationalisation and DBT, higher public capex, welfare schemes (rural employment guarantee, PM-KISAN, PMGKAY, Ayushman Bharat)
Assessment: growth acceleration and macro stability vs concerns on inequality, jobs, social-sector spending, state finances; balanced conclusion
Benefits: assured market and price, technology, inputs and credit, value chains, exports (contract farming, food processing)
Risks: unequal bargaining power, contract default, bias to large farmers and select crops, monopsony, weak dispute resolution
Institutional safeguards and alternatives: FPOs, cooperatives (Amul), Model Contract Farming Act 2018, e-NAM, repealed 2020 farm laws debate
Conclusion: useful but not sufficient; need public investment in irrigation, research, markets and income support
TRIMs Agreement (Uruguay Round, 1995): applies to goods; bans measures inconsistent with GATT Articles III and XI
Illustrative list: local content, trade-balancing, foreign-exchange balancing, domestic-sales/export restrictions; notification and transition periods
Impact on India: curbs on local-content policies (auto sector phase-out, solar DCR case DS456 lost in 2016), reduced policy space for industrial policy and technology absorption
Balanced view: India can use WTO-consistent tools (R&D, skills, infrastructure, PLI design) and push for S&DT
50M150wCompulsoryexaminePlanning models, growth patterns, FDI and poverty
Answer the following questions in about 150 words each:
(a) Examine the alternative model of planning given by C. N. Vakil. (10 marks)
(b) Is service-led growth in India sustainable ? Comment. (10 marks)
(c) What are the implications of depreciating Rupee on Indian Economy ? (10 marks)
(d) Comment on FDI in Multi-brand Retail sector in India. (10 marks)
(e) Is poverty 'capability deprivation' ? Discuss. (10 marks)
हिंदी में पढ़ें
निम्नलिखित में से प्रत्येक प्रश्न का उत्तर लगभग 150 शब्दों में लिखिए :
(क) सी. एन. वकील द्वारा नियोजन के वैकल्पिक प्रारूप (model) का परीक्षण कीजिए । (10 अंक)
(ख) क्या भारत में सेवा-आधारित विकास पोषणीय है ? टिप्पणी कीजिए । (10 अंक)
(ग) रुपये के मूल्य में गिरावट से भारतीय अर्थव्यवस्था के लिए क्या निहितार्थ हैं ? (10 अंक)
(घ) भारत के बहु-ब्रांड खुदरा क्षेत्र में एफ.डी.आई. (प्रत्यक्ष विदेशी निवेश) पर टिप्पणी कीजिए । (10 अंक)
(ङ) क्या गरीबी 'क्षमता-वंचन' है ? विवेचना कीजिए । (10 अंक)
Answer approach & key points
Framework: UPSC Economics Paper II. (a) examine: intro > how/why with reasoning > evidence > conclusion | (b) comment: context > arguments both sides > judgment > close | (c) analyse: intro > causes > effects > stakeholders/linkages > way forward | (d) comment: context > arguments both sides > judgment > close | (e) discuss: intro > 3-4 dimensions > example > balanced close Full marks: Comprehensive, well-structured, with data and named references
Vakil and Brahmananda, 'Planning for an Expanding Economy' (1956): wage-goods model as alternative to Mahalanobis
Wage goods (food, cloth, basic consumer goods) as the binding constraint; surplus labour can build capital if wage goods are available
Strategy: priority to agriculture and wage-goods, labour-intensive techniques, employment-led growth, liquid capital
Assessment: vindicated by 1960s food crisis and inflation; limits (neglect of capital-goods base, demand constraints)
Facts: services over half of GVA and a large share of exports (IT/ITeS, GCCs), rising services trade surplus
Strengths: skilled labour, digital infrastructure, GCCs, less import-intensive, stable export earnings
RBI response: FX intervention, reserves, capital-flow measures; overall effect depends on elasticities and pass-through
Policy: 51% under government route (2012) with conditions: minimum USD 100 million, 50% in back-end infrastructure, 30% sourcing from small industries, state discretion, cities above 10 lakh
50MevaluateForeign investment, exports and second green revolution
(a) Evaluate the policy of Government of India with regard to foreign investment in the country. Do you feel that there is a need for control of their activities ? (20 marks)
(b) What steps have been taken by the Government of India to increase exports during the last 10 years ? Have these yielded the desired result ? Examine. (15 marks)
(c) Why second green revolution was advocated for India ? Mention the recommendation of the National Commission for Farmers in this regard. (15 marks)
हिंदी में पढ़ें
(क) देश में विदेशी निवेश के सन्दर्भ में भारत सरकार की नीति का मूल्यांकन कीजिए । क्या आप महसूस करते हैं कि उनके क्रिया-कलापों को नियंत्रित करने की आवश्यकता है ? (20 अंक)
(ख) विगत दस वर्षों में निर्यातों में वृद्धि हेतु भारत सरकार द्वारा कौन से कदम उठाए गए हैं ? क्या इनसे वांछित परिणाम प्राप्त हुए ? परीक्षण कीजिए । (15 अंक)
(ग) भारत में द्वितीय हरित क्रांति का पक्ष-समर्थन क्यों किया गया ? इस संदर्भ में राष्ट्रीय कृषक आयोग की संस्तुतियों का उल्लेख कीजिए । (15 अंक)
Answer approach & key points
Framework: UPSC General Studies Paper II (Economics). (a) evaluate: criteria > evidence > balanced judgment | (b) examine: intro > how/why with reasoning > evidence > conclusion | (c) explain: definition/context > points in order > small example > short close Full marks: Precise policy analysis with specific data, balanced judgment, and clear linkage between measures and outcomes.
Evolution: FERA to FEMA, automatic vs government route, FIPB abolished (2017), sectoral caps eased (defence 74% automatic, insurance 100%, single-brand retail 100%, space), MBRT 51%
Outcomes: large gross inflows, technology, GVC links; recent fall in net FDI because of repatriation and outward FDI
Need for control: national security (Press Note 3, 2020), tax avoidance and transfer pricing, round-tripping, sectors like retail and media, data
Measures: FTP 2015 and FTP 2023, RoDTEP/RoSCTL, PLI, Districts as Export Hubs, logistics (PM Gati Shakti, National Logistics Policy), new FTAs (UAE, Australia, EFTA, UK)
Results: record total exports (about $825 billion in 2024-25), services and electronics strong
Shortfalls: merchandise exports stagnant as share of world trade, trade deficit, concentration in few products and markets, low labour-intensive exports
Challenges: protectionism and tariff shocks, CBAM, quality and logistics costs; balanced conclusion
Reasons: stagnating yields, regional concentration, groundwater depletion and soil degradation, neglect of rainfed areas and pulses/oilseeds, farmer distress
NCF (Swaminathan, 2004–06): MSP at least 50% above weighted average cost of production, credit at 4% and crop insurance, land reforms and tenancy, irrigation and water management, knowledge centres and extension, market reforms
Implementation status: A2+FL+50% MSP since 2018, BGREI, soil health cards; gaps remain
50MdistinguishFiscal federalism, women in agriculture, rural poverty
(a) Distinguish between fiscal federalism, fiscal consolidation and cooperative federalism. Comment on the outcome of cooperative federalism in India. (20 marks)
(b) Whether the role of women in agriculture has changed after liberalisation in India ? Comment. (15 marks)
(c) Explain the various estimates of rural poverty in India. What measures have been adopted by the Government to reduce it ? (15 marks)
हिंदी में पढ़ें
(क) राजकोषीय संघवाद, राजकोषीय समेकन तथा सहकारी संघवाद में भेद कीजिए । भारत में सहकारी संघवाद की उपलब्धियों पर टिप्पणी कीजिए । (20 अंक)
(ख) भारत में उदारीकरण के उपरांत, क्या कृषि में महिलाओं की भूमिका बदल गई है ? टिप्पणी कीजिए । (15 अंक)
(ग) भारत में ग्रामीण निर्धनता के विभिन्न अनुमानों को समझाइये । इसको कम करने हेतु, सरकार द्वारा कौन से उपाय अपनाये गए हैं ? (15 अंक)
Answer approach & key points
Framework: Fiscal Federalism & Rural Development. (a) compare: paired headings or point-wise contrast > key differences > significance > conclusion | (b) comment: context > arguments both sides > judgment > close | (c) explain: definition/context > points in order > small example > short close Full marks: Clear distinctions, specific Indian examples, data-driven, balanced judgment
Fiscal federalism: assignment of taxes and functions among levels, vertical and horizontal imbalances, transfers (Finance Commission, grants)
Fiscal consolidation: reducing deficits and debt (FRBM targets; 16th FC: Centre 3.5% by 2030-31, States 3%)
Cooperative federalism: joint decision-making (GST Council under Article 279A, NITI Aayog, Inter-State Council, COVID coordination)
Outcomes: GST implementation, 41% devolution (15th and 16th FC), but CSS conditionalities, cesses and surcharges shrinking divisible pool, GST compensation and borrowing disputes; balanced conclusion
Feminisation of agriculture: male out-migration leaves women as cultivators/managers; most rural women workers are in agriculture
Trends in participation: fall in female LFPR up to 2017-18 and sharp rise since (PLFS), mostly unpaid/self-employment in farming and allied activities
Constraints: low land ownership (about 14% of operational holdings), limited credit, extension and market access, wage gaps, drudgery
Positive changes and policy: SHGs and NRLM, MKSP, women-led FPOs, dairy and livestock, Lakhpati Didi, Namo Drone Didi; conclusion that roles expanded but recognition lagged
Official lines: Lakdawala (calorie-anchored), Tendulkar 2009 (rural 41.8% in 2004-05, 25.7% in 2011-12), Rangarajan 2014 (rural 30.9% in 2011-12)
Recent estimates: NITI Aayog MPI (rural 32.6% in 2015-16 to 19.3% in 2019-21), World Bank estimates from HCES 2022-23 showing extreme poverty near 2–5%
Measures: rural employment guarantee (MGNREGA, now VB-G RAM G Act), NFSA/PMGKAY, PMAY-G, DAY-NRLM, PM-KISAN, Ayushman Bharat, Jal Jeevan, Ujjwala
Assessment: large decline in poverty but vulnerability, measurement debates and the absence of an official line since 2011-12
50MdiscussMonetary policy, agricultural credit and subsidies
(a) What are the main objectives of monetary policy adopted by the R.B.I. during last 5 years ? Discuss the steps taken by the R.B.I. to encourage investment and maintain price-stability during this period. (20 marks)
(b) Why in spite of massive expansion of institutional finance, contribution of non-institutional sources in providing agricultural credit is still predominant ? (15 marks)
(c) What are the various forms of subsidies that go into agriculture sector in India ? What is the justification for these ? (15 marks)
हिंदी में पढ़ें
(क) विगत पांच वर्षों में, आर.बी.आई. द्वारा अपनायी गई मौद्रिक नीति के प्रमुख उद्देश्य क्या हैं ? इस अवधि में निवेश को प्रोत्साहन देने तथा कीमत-स्थिरता को बनाए रखने हेतु उठाए गए कदमों की विवेचना कीजिए । (20 अंक)
(ख) कृषि-साख प्रदान करने में संस्थागत वित्त में व्यापक प्रसार के बावजूद गैर-संस्थागत स्रोतों का योगदान सर्वाधिक क्यों है? (15 अंक)
(ग) भारत में कृषि क्षेत्र को प्राप्त होने वाले विभिन्न प्रकार के अनुदान कौन से हैं ? इनका क्या औचित्य है ? (15 अंक)
Answer approach & key points
Framework: Monetary Policy Framework (Inflation Targeting) & Agricultural Credit/Subsidy Analysis. (a) discuss: intro > 3-4 dimensions > example > balanced close | (b) explain: definition/context > points in order > small example > short close | (c) justify: claim > 3-4 reasons > evidence > conclusion Full marks: Precise, data-driven, covers all dimensions with specific examples and clear justification.
Framework: flexible inflation targeting (s.45ZA, CPI 4% ± 2%), MPC, objective of price stability keeping growth in mind; financial stability
Growth support: repo cut from 6.5% (2019) to 4% (May 2020), TLTROs, moratorium, restructuring, special refinance, CRR cut, G-SAP
Price stability: withdrawal of accommodation, 250 bps hikes to 6.5% (2022–23), SDF as floor (2022), VRRR, CRR increase, FX intervention
Assessment: inflation brought back towards 4%; subsequent easing in 2025 (repo 5.25%, CRR 3%) as inflation fell; transmission issues
Evidence: institutional share has risen (about two-thirds of farm household debt) but moneylenders still supply a large part, especially to small and marginal farmers and in eastern/central states (SAS 2019, AIDIS 2019)
Supply-side reasons: collateral and land-title requirements, excluded tenants and sharecroppers, branch gaps, documentation delays, NPA-driven risk aversion
Demand-side reasons: consumption, health and social needs; speed and flexibility of informal loans; interlinked credit–input–output markets
Remedies: KCC saturation, JLGs, SHG–bank linkage, digital land records, tenancy law reform, PACS computerisation