Economics 2025 Paper II 50 marks Critically evaluate

Q6

(a) What are the causes of industrial backwardness in India? Critically evaluate the role of the New Industrial Policy, announced in July 1991, towards correcting such backwardness. (20 marks) (b) Examine the implications for India due to agreements on agriculture that are signed under the World Trade Organisation (WTO) in 1995. (15 marks) (c) Why is a National Employment Policy necessary for India? What are the initiatives taken by the Government to facilitate employment generation? Explain. (15 marks)

हिंदी में प्रश्न पढ़ें

(a) भारत में औद्योगिक पिछड़ेपन के क्या कारण हैं? जुलाई 1991 में घोषित नई औद्योगिक नीति की इस पिछड़ेपन को दूर करने में भूमिका का आलोचनात्मक मूल्यांकन कीजिए। (20 अंक) (b) वर्ष 1995 में विश्व व्यापार संगठन (डब्ल्यू. टी. ओ.) के अन्तर्गत कृषि पर हस्ताक्षरित किए गए समझौतों के कारण भारत पर पड़ने वाले प्रभावों की जाँच कीजिए। (15 अंक) (c) भारत के लिए राष्ट्रीय रोजगार नीति क्यों आवश्यक है? रोजगार सृजन को सुगम बनाने के लिए सरकार द्वारा क्या-क्या पहल की गई है? व्याख्या कीजिए। (15 अंक)

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Directive word: Critically evaluate

This question asks you to critically evaluate. 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 question demands critical evaluation across three interconnected themes. Structure your answer with a brief integrated introduction, then allocate approximately 40% of content to part (a) on industrial backwardness and NIP 1991, 30% to part (b) on WTO agriculture agreements, and 30% to part (c) on National Employment Policy. Use directive-specific treatment: 'critically evaluate' for (a) requiring balanced assessment, 'examine' for (b) needing detailed implications analysis, and 'explain' for (c) demanding causal reasoning. Conclude by synthesizing how trade policy, industrial policy and employment policy interconnect in India's development trajectory.

Key points expected

  • Part (a): Causes of industrial backwardness—colonial legacy, low capital formation, technology gaps, infrastructure deficits, regulatory excess (MRTP/FERA), small scale reservation, and skill shortages; critical evaluation of NIP 1991 covering delicensing, decontrol, FDI liberalization, MRTP/FERA dilution, public sector reforms, and assessment of outcomes (manufacturing GDP share, MSME resilience, jobless growth critique)
  • Part (b): WTO Agreement on Agriculture implications—tariffication of non-tariff barriers, domestic support reduction (AMS commitments), export subsidy constraints, market access issues; India's specific concerns (food security, MSP operations, de minimis limits), AoA review demands, and post-1995 experience including Bali/Nairobi ministerial outcomes
  • Part (c): Rationale for National Employment Policy—demographic dividend urgency, formalization crisis, sectoral shifts, technology displacement, ILO conventions; government initiatives covering MGNREGA, Skill India (NSQF), Make in India, Startup India, PLI schemes, labour code reforms, and emerging gig economy protections
  • Cross-cutting analytical depth: distinction between policy intent and implementation gaps, temporal sequencing of reforms (1991-2024), and structural constraints persisting across industrial and agricultural sectors
  • Critical balance: recognition of NIP 1991's success in ending license raj versus failure to generate adequate manufacturing employment; WTO membership benefits (market access) versus agricultural vulnerability; employment policy necessity versus fragmented implementation

Evaluation rubric

DimensionWeightMax marksExcellentAveragePoor
Concept correctness25%12.5Precise application of economic concepts: for (a) distinguishes between industrial policy and industrialization strategy, correctly identifies NIP 1991 as structural adjustment rather than mere liberalization; for (b) accurately explains Amber/Green/Blue box classifications and India's special and differential treatment claims; for (c) distinguishes between employment policy and labour policy, correctly identifies Lewis turning point relevanceGenerally correct concepts but with imprecision—conflates delicensing with privatization, confuses AoA with Agreement on Subsidies, treats employment schemes as employment policy without conceptual framingFundamental conceptual errors—describes NIP 1991 as nationalization, misidentifies WTO agreements, confuses MGNREGA with unemployment insurance, or uses terms without economic meaning
Diagram / model10%5Strategic use of 1-2 relevant diagrams: for (a) Lewis dual-sector model showing limited industrial absorption or infant industry protection framework; for (b) tariffication diagram showing bound vs applied rates; for (c) employment elasticity trends or sectoral employment shift visualization—properly labelled and integrated with analysisDiagrams present but poorly integrated—generic production possibility curves without application, or tables presented as diagrams without economic interpretationNo diagrams where appropriate, or incorrect diagrams (supply-demand for structural issues, irrelevant growth models), or diagrams copied without explanation
Quantitative reasoning15%7.5Precise data deployment: for (a) manufacturing GDP share decline (16-17% to ~13%), IIP trends, FDI inflows pre/post 1991; for (b) India's AMS calculations, bound tariff rates, import growth data; for (c) employment-unemployment rates (PLFS data), sectoral workforce distribution, skill gap estimates—data used to support arguments, not decorativeSome data mentioned but imprecise—round figures without years, confused between absolute and percentage changes, or data without clear linkage to argumentNo quantitative support, or fabricated/incorrect statistics, or data dumps without analysis—listing figures without explaining their significance for the question
Indian / empirical examples25%12.5Rich empirical grounding: for (a) sector-specific cases (textile decontrol success vs small scale reservation failure), state-level industrial performance variation; for (b) specific commodity experiences (cotton, sugar, rice), India's peace clause utilization, Ramesh Chand committee recommendations; for (c) state-level employment initiatives (Kerala's Kudumbashree, Rajasthan's skill missions), sectoral case studies (IT-BPM employment, construction sector dynamics)Generic references to 'India' without specificity—mentions MGNREGA without operational details, refers to 'farmers' without regional/commodity specificity, or examples that could apply to any developing countryNo Indian examples, or inappropriate foreign examples dominating, or factually incorrect examples (attributing schemes to wrong ministries, anachronistic references)
Policy implication25%12.5Sophisticated policy analysis: for (a) evaluates NIP 1991 against subsequent needs (Make in India 2.0, PLI course correction); for (b) assesses India's negotiating position evolution, food security concerns in permanent solution negotiations; for (c) identifies policy gaps (missing urban employment guarantee, incomplete social security architecture), proposes integrated approach linking industrial, trade and employment policy—recognizes political economy constraintsDescriptive policy listing without evaluation—describes schemes without assessing effectiveness, or recommendations generic and unconnected to earlier analysisNo forward-looking implications, or unrealistic recommendations ignoring fiscal/administrative constraints, or purely normative statements without analytical foundation

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