Q4
(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 प्रश्न पढ़ें
(a) 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) (b) भारत में किसानों की आय में तीव्रतर वृद्धि हेतु क्या उनको निगमित क्षेत्र से जोड़ा जाना आवश्यक है ? विवेचना कीजिए । (15 अंक) (c) 'ट्रिम्स' की प्रमुख विशेषताएं क्या हैं ? यह किस प्रकार भारत के हितों के विरुद्ध कार्य करता है ? (15 अंक)
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' demands a balanced, analytical treatment with arguments for and against. Structure: Introduction (2-3 lines on post-1991 fiscal transformation) → Part (a): 40% word budget (~300 words) covering FRBM Act, tax reforms, GST, subsidy rationalisation, and critical assessment of growth-social justice trade-off → Part (b): 30% (~220 words) examining contract farming, FPOs, corporate farming models with balanced evaluation → Part (c): 30% (~220 words) on TRIMS features, local content requirements, export obligations, and India's phased compliance → Conclusion synthesising whether market-friendly reforms achieved inclusive growth.
Key points expected
- Part (a): Post-1991 fiscal policy shifts—reduction in fiscal deficit targets, FRBM Act 2003/2018 amendments, tax base broadening (GST 2017), reduction in customs duties, phased reduction of subsidies (fertilizer, food, LPG), shift from plan to non-plan expenditure classification, and increased capital expenditure focus in recent budgets
- Part (a): Critical evaluation of growth vs. social justice—GDP growth acceleration but rising inequality (Palma ratio, Oxfam reports), jobless growth concerns, MGNREGA as social safety net, Ayushman Bharat as corrective measure, fiscal space constraints for welfare
- Part (b): Corporate linkage mechanisms—contract farming (Model APMC Act 2003, Farm Acts 2020), Farmer Producer Organizations (FPOs), agri-startups, food processing sector linkages, e-NAM integration; arguments for (technology, credit, market access) and against (exploitation, crop suitability, landlessness)
- Part (b): Alternative pathways—state-led cooperatives (Amul model), SHG-based collectivization, direct income support (PM-KISAN), price deficiency payments (Bhavantar Bhugtan Yojana), need for irrigation/infrastructure before corporate integration
- Part (c): TRIMS features under WTO Agreement—prohibition of local content requirements, trade-balancing requirements, foreign exchange restrictions, export performance requirements; applicability only to goods not services
- Part (c): India's specific TRIMS violations and compliance—phased elimination of local content in auto sector (Indigenous Content Requirement), export obligations in EPZs, software policy modifications; residual concerns in solar domestic content disputes (US complaint), Make in India tensions
- Part (c): Broader implications—loss of policy space for infant industry protection, constraints on technology transfer negotiations, impact on Make in India and Atmanirbhar Bharat, strategic use of TRIMS-inconsistent measures in bilateral investment treaties
Evaluation rubric
| Dimension | Weight | Max marks | Excellent | Average | Poor |
|---|---|---|---|---|---|
| Concept correctness | 25% | 12.5 | Precise definitions: for (a) distinguishes revenue vs. capital expenditure, fiscal deficit vs. primary deficit; for (b) distinguishes contract farming from corporate farming; for (c) accurately distinguishes TRIMS from TRIPS, GATT, GATS, and correctly identifies TRIMS as investment measure not trade measure per se | Broadly correct concepts but conflates terms—e.g., mixes fiscal deficit with revenue deficit, treats all corporate linkages as uniform, or confuses TRIMS with TRIPS or general WTO trade rules | Fundamental conceptual errors—describes monetary policy as fiscal policy, conflates corporate farming with land leasing, or describes TRIMS as tariff reduction agreement; significant factual inaccuracies |
| Diagram / model | 15% | 7.5 | For (a): Laffer curve to illustrate tax rate optimization; Lorenz curve/Gini coefficient trends post-liberalisation; or fiscal deficit-GDP ratio time series. For (b): value chain diagram showing farmer-corporate linkages. For (c): not mandatory but WTO agreements hierarchy diagram adds value | Basic diagram present but poorly labelled or marginally relevant—e.g., generic production possibility curve without application to fiscal policy trade-offs, or simple flowchart without economic insight | No diagrams where clearly applicable, or incorrect diagrams—e.g., AD-AS without fiscal policy shift shown, or misdrawn curves with wrong axis labels; diagrams that misrepresent economic relationships |
| Quantitative reasoning | 15% | 7.5 | Specific data points: for (a) fiscal deficit trajectory (8% in 1990-91 to 3.3% target, actual 6.4% in 2022-23), tax-GDP ratio changes, subsidy as % of GDP decline; for (b) FPO coverage numbers, corporate investment in agriculture; for (c) India's TRIMS compliance timeline with specific years | Vague quantitative references—'fiscal deficit reduced significantly,' 'subsidies decreased'—without specific percentages or years; or outdated statistics without relevance to current policy debate | No quantitative backing for claims, or invented statistics; serious errors like stating fiscal deficit was 20% in 1991 or that India fully complied with TRIMS by 1995 without phased transition |
| Indian / empirical examples | 25% | 12.5 | Rich empirical grounding: for (a) cites Kelkar Task Force, Rangarajan, NK Singh FRBM Committee, specific budget provisions (2023-24 capital expenditure push); for (b) references Pepsi-Maharashtra potato contract, Suguna poultry integration, Amul cooperative contrast, recent farmer protests against Farm Acts; for (c) cites US solar panel dispute (DS456), auto sector local content phase-out, specific notification dates | Generic references without specificity—mentions 'contract farming exists' without examples, or 'TRIMS affected India' without concrete disputes; only one part well-illustrated while others lack examples | No Indian examples, or inappropriate foreign examples (US fiscal policy for part a); factually wrong examples—cites Operation Flood as corporate linkage when it was cooperative, or confuses TRIMS with India's patent law changes |
| Policy implication | 20% | 10 | Sophisticated policy analysis: for (a) evaluates whether FRBM flexibility during COVID-19 was justified, discusses revenue deficit grants to states, assesses if GST compensation achieved equity; for (b) proposes conditional corporate linkage with regulatory safeguards, land lease reforms, insurance integration; for (c) argues for strategic use of TRIMS-inconsistent measures in bilateral treaties, or alternative industrial policy tools (subsidies, public procurement) | Descriptive policy listing without critical evaluation—states what government did without assessing effectiveness; or one-sided advocacy (purely pro or anti-corporate) without nuance; superficial TRIMS discussion without forward-looking implications | No policy implications drawn, or contradictory recommendations; suggests policies explicitly violating WTO commitments without acknowledgment; proposes fiscal expansion without deficit concern or austerity without growth consideration; purely ideological stance without evidence |
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