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General Studies 2024 GS Paper III 10 marks 150 words Compulsory Comment

GS Paper III — Q2

What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to…

What are the causes of persistent high food inflation in India? Comment on the effectiveness of the monetary policy of the RBI to control this type of inflation. (Answer in 150 words) 10 marks

हिंदी में प्रश्न पढ़ें

भारत में निरंतर उच्च खाद्य मुद्रास्फीति के कारण क्या हैं? इस प्रकार की मुद्रास्फीति को नियंत्रित करने में आर० बी० आई० की मौद्रिक नीति की प्रभावशीलता पर टिप्पणी कीजिए। (उत्तर 150 शब्दों में दीजिए)

Q2 of the 2024 UPSC Mains General Studies GS Paper III, as printed
The question as printed in the 2024 General Studies paper
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Model answer

Written by UPSC Answer Check against this question's marking rubric, to the 150-word length. UPSC does not publish answers for Mains — this is one way to score well, not an official key.

Food inflation is mainly supply-driven, making RBI’s monetary policy only partially effective. Persistent high food inflation stems from MSP hikes, crop failures, supply-chain bottlenecks, hoarding and global commodity price shocks. Structural rigidities—APMC restrictions, inadequate cold storage, middlemen dominance and rising input costs such as fertilizers and fuel—further raise prices. Because food prices are largely inelastic to interest rates, being driven by supply constraints rather than demand, repo-rate adjustments under RBI’s 4±2% inflation-targeting framework have limited traction. In 2022-23, food inflation peaked at 8.6% in September 2022, with cereal inflation double-digit, despite the repo rate rising from 4% to 6.5%; overall CPI food inflation crossed double digits in July 2023. Hence, monetary policy is necessary but insufficient. Controlling food inflation requires complementary fiscal and administrative measures: better buffer-stock management, calibrated export-import policy, and supply-side reforms to reduce wastage and market frictions.

What "Comment" is asking you to do

Take a position on the statement and support it. Comment usually attaches to a quoted line in the short slots, so the reasoning must be compressed — an opening view, a few load-bearing reasons, and the limit of the claim.

Structure that answers it

Unpack what the statement asserts → your stance → two or three supporting reasons → the qualification that limits it

Where marks are lost

Neutral summary; a comment without a stance has not answered. Equally costly is accepting the quoted line wholesale and never testing where it fails.

All UPSC directive words, compared →

How this answer will be evaluated

Approach

Framework: GS3 Economy: Situation > Analysis > Measures > Assessment. comment: context > arguments both sides > judgment > close Full marks: Clearly separates supply/demand causes and correctly identifies the structural mismatch between monetary policy and food inflation.

Key points expected

  • Distinguish supply-side causes (weather, logistics) from demand-side factors
  • Explain why RBI's repo rate hikes are ineffective against supply shocks
  • Mention RBI's limited tools (e.g., liquidity management) for food prices
  • Provide a balanced judgment on the policy's limitations

Evaluation rubric

Each sub-part is marked on its own, against the marks and word limit printed on the paper.

  1. The answer Identify causes of food inflation and judge RBI's monetary policy effectiveness. 10 marks · 150 words

    comment— context → arguments both sides → judgment → close

    Must cover

    • Distinguish supply-side causes (weather, logistics) from demand-side factors
    • Explain why RBI's repo rate hikes are ineffective against supply shocks
    • Mention RBI's limited tools (e.g., liquidity management) for food prices
    • Provide a balanced judgment on the policy's limitations

    Loses marks

    • Treating food inflation as purely demand-pull (ignoring supply shocks)
    • Suggesting RBI can directly control food prices via interest rates
    • Focusing only on agricultural production without mentioning logistics

    Earns more

    • Reference to MSP or buffer stock policy as a non-monetary solution
    • Mention of specific food items (pulses, vegetables) driving inflation
    • Reference to the 'food inflation' vs 'core inflation' distinction
    • Mention of supply chain bottlenecks or cold storage deficits

    Extra mark

    • Citing a specific recent CPI food inflation figure
    • Mentioning the 'Food Inflation' component in the CPI basket

Practice this exact question

Write your answer and it is marked point by point against the model answer above — what you covered, what you missed, what you got wrong.

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