Economics 2024 Paper II 50 marks 150 words Compulsory Examine

Q5

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 प्रश्न पढ़ें

निम्नलिखित में से प्रत्येक प्रश्न का उत्तर लगभग 150 शब्दों में लिखिए : (a) सी. एन. वकील द्वारा नियोजन के वैकल्पिक प्रारूप (model) का परीक्षण कीजिए । (10 अंक) (b) क्या भारत में सेवा-आधारित विकास पोषणीय है ? टिप्पणी कीजिए । (10 अंक) (c) रुपये के मूल्य में गिरावट से भारतीय अर्थव्यवस्था के लिए क्या निहितार्थ हैं ? (10 अंक) (d) भारत के बहु-ब्रांड खुदरा क्षेत्र में एफ.डी.आई. (प्रत्यक्ष विदेशी निवेश) पर टिप्पणी कीजिए । (10 अंक) (e) क्या गरीबी 'क्षमता-वंचन' है ? विवेचना कीजिए । (10 अंक)

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Directive word: Examine

This question asks you to 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 'examine' for part (a) requires critical analysis with evidence, while other parts use 'comment' and 'discuss' demanding balanced evaluation. Allocate approximately 30 words (20%) per sub-part given equal 10-mark weighting, ensuring each response has a brief analytical core without elaborate introductions. Structure: direct engagement with the specific issue, 2-3 analytical points with evidence, and a concise concluding observation.

Key points expected

  • (a) Vakil's 'Wage Goods Model': identifies bottleneck as shortage of wage goods (food, clothing) rather than capital; advocates agricultural-first strategy over Mahalanobis heavy-industry model; cites low MPC of poor limiting demand for industrial goods
  • (b) Service-led growth sustainability: acknowledges IT-BPM success (TCS, Infosys) but notes 'jobless growth' critique; contrasts with East Asian manufacturing-led model; mentions premature deindustrialization concerns per Rodrik
  • (c) Rupee depreciation implications: positive (export competitiveness, remittance boost, IT services) vs negative (imported inflation, CAD pressure, external debt servicing costs); reference 2013 taper tantrum or 2022 depreciation episode
  • (d) FDI in multi-brand retail: arguments for (supply chain efficiency, farmer prices, employment, technology transfer) vs against (displacement of kirana stores, predatory pricing, data concerns); mention 2012 policy reversal and 2018 liberalization
  • (e) Capability deprivation: Sen's capability approach beyond income poverty; functionings and freedoms; links to HDR, MPI; contrasts with Engel's law/Calorie norm approaches

Evaluation rubric

DimensionWeightMax marksExcellentAveragePoor
Concept correctness25%12.5Precise articulation of Vakil's wage goods bottleneck, Sen's multidimensional capability framework, and distinction between nominal vs real effective exchange rate; correctly identifies 'service-led growth' as tertiarization without industrializationBasic familiarity with concepts but conflates Vakil with Gandhian model or confuses capability approach with basic needs approach; generic treatment of exchange rate effectsFundamental errors such as attributing Vakil's model to PC Mahalanobis, treating capability deprivation as mere income shortfall, or confusing FDI with FII in retail context
Diagram / model15%7.5Sketches Vakil's wage goods constraint diagram (wage goods supply vs industrial employment) or Sen's capability space with conversion factors; uses AS-AD framework for depreciation analysis where relevantMentions models without clear diagrammatic structure or draws incorrect axes; describes Vakil's logic verbally without visual representationNo diagram where clearly applicable (Vakil model), or completely incorrect diagrams (e.g., Phillips curve for depreciation)
Quantitative reasoning15%7.5Cites approximate figures: services share in GDP (~55%) vs employment share (~30%), retail FDI cap (51%→100%), rupee depreciation magnitude (e.g., 2013: 55→68/USD), or MPI deprivation cutoffsVague references to 'high' or 'low' without numbers; mentions trends without magnitudesNo quantitative dimension or factually wrong data (e.g., claiming 100% FDI in multi-brand retail was always permitted)
Indian / empirical examples25%12.5Specific illustrations: Vakil's critique of Second Plan; IT sector growth post-1991; 2013/2018/2022 rupee episodes; Walmart-Flipkart acquisition; Kerala's HDI achievement vs Bihar under capability lensGeneric references to 'Indian IT sector' or 'recent depreciation' without specific episodes; mentions FDI policy changes without datesNo Indian examples or inappropriate foreign illustrations (e.g., discussing Walmart in US for part d without Indian context)
Policy implication20%10Derives clear policy lessons: for (a) agricultural investment priority; (b) manufacturing revival via PLI schemes; (c) RBI forex intervention limits, import compression; (d) conditional FDI with MSME safeguards; (e) targeted capability expansion (health, education) over cash transfersStates obvious policy conclusions without analytical linkage; recommends 'balanced growth' or 'careful management' without specificityNo policy implications or contradictory recommendations (e.g., advocating complete capital account liberalization while discussing 2013 crisis)

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