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

Q2

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

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)

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Directive word: Comment

This question asks you to comment. 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 'comment' requires a balanced analytical response that identifies causes of food inflation and critically assesses RBI's monetary policy effectiveness. Structure: brief introduction defining food inflation → causes (supply-side, structural, external) → effectiveness of monetary policy with limitations → nuanced conclusion suggesting complementary measures.

Key points expected

Supply-side factors: MSP hikes, crop failures, supply chain bottlenecks, hoarding, and global commodity price shocks
Structural factors: APMC restrictions, inadequate cold storage, middlemen dominance, and rising input costs (fertilizers, fuel)
Monetary policy limitations: food inflation is largely inelastic to interest rates as it is driven by supply constraints, not demand
RBI's inflation targeting framework (4±2%) and repo rate adjustments have limited traction on food prices
Need for complementary fiscal and administrative measures: buffer stock management, export-import policy, and supply-side reforms
Recent data reference: double-digit food inflation in 2022-23 despite repo rate hikes from 4% to 6.5%

Evaluation rubric

Dimension	Weight	Max marks	Excellent	Average	Poor
Demand-directive understanding	20%	2	Correctly interprets 'comment' to provide balanced analysis of both causes and policy effectiveness; addresses both parts of the question proportionally without treating it as mere 'explain'	Addresses both parts but treats 'comment' as descriptive; either causes or policy effectiveness dominates disproportionately	Misinterprets directive as pure description or ignores one part entirely; fails to provide critical assessment of monetary policy
Content depth & accuracy	20%	2	Covers diverse causes (supply, structural, external) with accurate economic reasoning; correctly identifies why monetary policy is blunt instrument for food inflation; mentions inflation targeting framework	Lists obvious causes (weather, MSP) with superficial treatment; generic statement on interest rates without explaining transmission failure to food prices	Factually incorrect on monetary policy transmission; confuses food inflation with general demand-pull inflation; omits structural factors entirely
Structure & flow	20%	2	Logical progression: definition → causes → policy critique → conclusion; smooth transitions between supply-side analysis and monetary policy limitations; 150-word discipline maintained	Adequate structure but causes and policy analysis remain disconnected; minor word count deviation; some abrupt transitions	Disorganized or fragmented; no clear separation between causes and policy effectiveness; significantly over/under word limit
Examples / case-law / data	20%	2	Specific reference: recent RBI repo rate trajectory (2022-24), tomato/onion price spikes, or CPI-Food inflation data; mentions Operation Greens or buffer stock releases as alternative tools	Vague reference to 'recent inflation' or 'RBI rate hikes' without specifics; generic mention of MSP without crop or year	No data, examples, or institutional references; relies entirely on theoretical assertions; outdated or incorrect statistics
Conclusion & analytical edge	20%	2	Nuanced conclusion recognizing monetary policy's role in anchoring inflation expectations but emphasizing supply-side reforms, fiscal coordination, and targeted administrative measures; policy prescription shows mature understanding	Balanced but generic conclusion suggesting 'both monetary and fiscal measures needed' without specificity; no clear stance on relative effectiveness	Absurd conclusion advocating only rate hikes for food inflation; or dismisses monetary policy entirely without nuance; no forward-looking policy suggestion

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