That disinvestment remains entirely a political decision and not a decision taken

by a disinvestment commission, such as in some of India's neighbours or in countr

ies like Mexico is part of the problem. Yet, even if the decision is depoliticis
ed, problems will remain. In the light of this statement, analyze the problems as
sociated with disinvestment of PSUs in India and suggest measures overcome these
problems.




Disinvestment or divestment is defined as an action by an organization or govt.
to sell or liquidate their assets or enterprises to raise funds or resources to
meet some specific targets.
GoI needs to disinvest in its PSUs with the objective of financing its Fiscal de
ficit, for social welfare schemes, to invest in infrastructure and to repay the
govt. debt.
Problems:
1) Process of disinvestment led to privatization of the sector and this is not f
avorable socially especially for socially disadvantageous people.
2) Divestment is generally for revenue raising for govt., this does not consider
requirement of the enterprises sometime.
3) Loss making units don't attract investment so easily.
4) Lack of well defined investment policy
5) Disinvestment faces opposition from Left parties and this leads to undermine
the political stability in the country. Thus pace of disinvestment has been rest
ricted and not able to meet the target.
Excessive political interference and opposition have undermined the proceeds of
the divestment. GoI established the Rangrajan committee on divestment in 1993 wh
ich resulted in the setup of Divestment commission which remained as an advisory
body only and doesn't have much power over political decisions. So proper value o
f assets is not gained and process takes much time. There are some measures govt
. should take to get full benefit of divestment as
1) Divestment should be done in time bound manner with transparency throughout t
he whole process and should be audited by reputed auditing firms
2) Divestment fund (National investment Fund) should be used efficiently.
3) Govt. proposes budgets keeping divestment fund in their mind making it depend
ent on this fund. So this fund should be delinked to budgetary exercise.
4) Long term strategy for divestment should be formed.
5) Private sector should be motivated in some relevant fields to increase compet
ition and to discipline the PSEs.
To strengthen the public sector, Structural changes should be done to free these
from the control of ministries and Good corporate governance norms should be im
plemented. Excessive workforce should be cut down to decrease the economic press
ure on PSEs either by moving them to other fields or by voluntary retirement. Go
vt. should take the divestment seriously. It should keep remember that divestmen
t objective should be to revive the PSEs by more capital availability and not th
e financing fiscal deficit.




What are the implications on the economy of RBI's intervention in the foreign exch
ange market? Examine.




The exchange rate is a key financial variable that affects decisions made by for
eign exchange investors, exporters, importers, bankers, businesses, financial in
stitutions, policymakers and tourists in the developed as well as developing wor
ld.
In the post-Asian crisis period, particularly after 2002-03, capital flows into
India increased creating space for speculation on Indian rupee. The Reserve Bank
intervened actively in the forex market to reduce the volatility in the market.
During this period, the Reserve Bank made direct interventions in the market th
rough purchases and sales of the US Dollars in the forex market and sterilised i
ts impact on monetary base .
The Reserve Bank has been intervening to curb volatility arising due to demand-s
upply mismatch in the domestic foreign exchange market and to smoothen jerky mov
ements in economy.
The RBI has been intervening in the currency markets because a weaker currency p
ushes up the country's import bill contributes to the current account deficit. Ind
ia has a huge import bill largely because it buys almost 80 per cent of its oil
from abroad, and a weak rupee can wreak havoc with the government's finances expan
ding A high trade deficit which contributes to the fiscal deficit.
Unfortunately any action it takes to tackle one could be negated by the others.
If it sells dollars to support the currency it sucks liquidity out, choking grow
th. Slower growth makes India an unattractive destination for foreign investors,
which in turn leads to drying up of dollar flow. But if it releases too much li
quidity into the system, inflation could go into double digits and push the valu
e of the rupee down, completing the vicious cycle.
So RBI instead of looking for short term measures they should look out for long
term measures which can only happened with strong political will.





Examine the possible effects of Ukraine crisis on the economies of emerging mark
ets.




The effects of the Ukraine crisis could be seen in multiple dimensions political
,strategic, geographical and economic. The crisis has once again revealed the vu
lnerabilities of the emerging markets.
The crisis is bound to affect the investments into the emerging economies, which
were providing the impetus for the growth in these economies. The uncertainty a
nd the instability of the economies has again surfaced exacerbating the already
negative sentiment . The sanctions by the west against Russia would further aggr
avate the condition of the economies.The trade would be affected globally . The
financial institutions have already shown their reluctance for such measures. Th
e energy supplies may get affected thereby increasing the international prices o
f the commodities. US may continue with the tapering for the quantitative easing
program without giving due consideration for the emerging economies. This would
further push the emerging economies to the distress situation.
The rise of the middle class to bring in transparency and for more participation
in the governance would lead to such more such risings in the other economies.
There have been such instances in Brazil, Thailand and Turkey . This would have
an affect on the political and the economic stability of the emerging markets.
Thus, the impacts of the Ukraine crisis would be felt globally, especially among
the emerging economies who are less resilient and dependent on the foreign inve
stments for their growth.
Discuss about the kind of interventions needed by the government to improve the
quality of air in Indian cities.




Air pollution in cities is caused by the vehicular emission, traffic congestion
and green house gas emission. Excessive Air pollution causes the lung cancer, re
spiratory diseases, asthma and many heart diseases etc.
According to WHO report, nearly 1/8th of the total deaths in the world is due to
air pollution alone. Union health ministry has setup a committee to examine the
health effect of Air pollution in cities. Other measures need to be taken by go
vt. to improve the air quality in cities are-
1) Increase in road tax for personal vehicle
2) Promote public transport by effective implementation and wider coverage.
3) A clean policy for power plants should be drawn and renewable energy sources
should be promoted.
4) Review emission norms for 2 and 3 wheelers as these also contribute to pollut
ion a lot.
5) Air polluting Industries should not be allowed near to the big cities.
6) Introduce more advanced vehicle technologies and efficient fuel like CNG shou
ld be mandated for big cities at least.
7) Battery operated vehicle should be promoted for small distances.
8) Establish more efficient Emission testing center for commercial vehicle.
9) Strict norms against burning of leaves and garbage in cities.
Govt. alone can't fully realize the goal of improving the air quality. National en
vironment awareness campaign should be launched repeatedly. Afforestation should
be encouraged around the cities and public awareness should be increased to inc
rease citizen participation to use more green technology.





In your opinion, was India right in abstaining from voting on a United States sp
onsored resolution in the United Nations Human Rights Council (UNHRC) against Sr
i Lanka for an international probe into alleged rights violations in the last le
g of the civil war? Critically comment.




Recently, India abstained from voting on western sponsored UN human rights counc
il resolution against srilanka. It is a shift from india's previous position on vo
ting in favour of earlier 2 resolutions against Srilanka. However, this non-acti
on has evoked mixed responses from both inside and outside india.
India has taken a principled stand on the recent resolution by abstaining it.
- india has long avoided country- specific resolutions, which has been reinforce
d again.
- the intrusive language of the resolution might deeply impact the sovereignty o
f Srilanka.
- elections held in Nothern provinces is a step forward towards reconciliation p
rocess. Voting against would have termed these efforts meaningless .
-keeping long term interest in mind and increasing china's presence in our near ne
ighborhood, voting for such an intrusive resolution would have affected our nati
onal interests and relations with Srilanka.
However critics point out that since 2009, there have been virtually no efforts
by Sri lankan government towards reconciliation of ethnic communities. In absenc
e of domestic pressure and the gross human rights violations and ethnic cleansin
g, international community should put up pressure on Sri lankan government. Also
, the policies of government of India are being driven by domestic political con
siderations.
In conclusion, neither western backed resolutions nor abstainism can be a soluti
on in the long run. Regional partners should participate in various platforms li
ke CHOGM to build a pressure on Srilankan government.





Why does India need a neutrino observatory? Explain its importance.





Indian neutrino observatory (INO) has been conceived on a scale that no other ba
sic sciences project in India has attempted. The MoU signed by seven institution
s, that brought the Neutrino Collaboration Group into existence has already show
n the enthusiasm and collaborative spirit of scientific community in India.
INO will have an impact on the emerging high energy physics scenario in the coun
try. People trained at INO will not only participate here but also have the expe
rtise to contribute to other high energy and nuclear physics projects around the
world. Over the long term INO is expected to develop into a world class undergr
ound science laboratory straddling many fields like physics, biology, geology an
d allied engineering fields.
a. India needs to display its capabilities as being able to deliver good results
in big scientific experiments on time and on a sustainable basis to attract pot
ential investors in its scientific programmes..
b. India is a country with prior experience in neutrino physics as in the 1960s,
a neutrino observatory located in Karnataka became one of the first few to obse
rve neutrinos in the Earth's atmosphere. However, the lab was shut in the 1990s du
e to the closure of mines. But it shows that India is ready to work with an indi
genously designed detector.
c. China is going to build another neutrino observatory the Jiangmen Underground
neutrino Observatory by 2020 which will pursue the same goal as that of INO. If
China continues on such a fast pace, it will soon outrun India in making some s
eminal discovery. Therefore, a greater sense of urgency is required in completin
g the INO by 2020.
d. INO once completed will also be able to host a dark-matter decay experiment a
nd other such important areas of research giving India an edge in the scientific
field.
Therefore, INO is an important project since it has immense physics potential an
d societal value as well for India.
Critically assess the nature of Indian diplomacy with its neighboring countries
in South Asia since Independence.




India's foreign policy towards its neighbouring countries has been guided by well
deliberated principles like Pancheel & Gujral Doctrine. It has followed unilateral a
ssistance, peaceful coexistence & non-interference while dealing with them.
Domination & interference was alleged during liberation of Bangladesh. But it wa
s largely on humanitarian grounds & India's stand proved beneficial in long term.
Nepal & Bhutan have enjoyed all time healthy relations with India. Occasionally
street politics & self interests dominate in Indian foreign diplomacy. But trade
& cultural relations have been framed to favor them. India's assistance for educa
tion, infrastructure & peace keeping has earned laurels in South Asia.
Sometimes Sri Lanka & Pakistan allege India for Big Brother attitude & lack of coo
peration in issues like maritime boundary & terrorism. Interference during cance
llation of GMR contract in Maldives was not taken well.
Further voting against Sri Lanka in UNHRC was seen with skeptical eyes. But thes
e are rare circumstances when India succumbed under local pressure & commercial
interests. It reflected India's vision of safeguarding national interests & securi
ng human rights for Indians.
Therefore India's foreign diplomacy has been largely successful for its local surr
oundings. Its effectiveness is further reinforced by recent release of fishermen
by Sri Lanka.




Discuss the importance of creating a strong manufacturing-based middle class in
India. Why do you think India has failed in creating a strong skilled labor forc
e in manufacturing sector? Examine.




Manufacturing sector in india contribute to 15% of the GDP and 50% of the countr
y's export.It has employed 70 million people and studies has estimated that every
job created in manufacturing has a multiplier effect, creating 23 jobs in the ser
vices sector.
The importance of creating a strong manufacturing based middle class lies in the
fact that
1. it has much larger job creating potential as compared to service sector.
2.Development of robust manufacturing sector will bridge the gap between the hig
hly paying specialised service sector job and meagerly paying agricultural secto
r thus reducing the income inequality.
3.service sector requires specialisation and higher education which has higher o
pportunity cost whereas manufacturing sector needs skills which can be developed
with nominal education and exclusive skill training.
4.Currently Indian economy is largely domestic demand driven.For the long term g
rowth prespective,it should be supplemented with a export driven manufacturing s
ector which will also contribute to curb CAD and dwindling foreign reserves.
5.India's skill base and overwhelming rural economic base provide the conducive co
ndition to develop a manufacturing sector based on cheap,light goods and food pr
ocessing.
But India has failured to create a strong skilled labour force in manufacturing
sector due to following reasons.
1.Capital intensive production was promoted rather the labour intensive producti
on.
2.many manufacturing goods were reserved for SME sector but skewed incentive sys
tem promoted the SME sector to remain small rather than expand.It reduces its ec
onomy of scale and render it uncompetitive in external and domestic market.
3.various procedural impediments and bureaucreatice inefficency has also prevent
ed the development of strong manufacturing base.
4.Lack of basic infrastructure such as power,road also acted as disincentive.
5.Poor technological base and stringent labour laws has also hampered the growth
.
Although Government has taken many measures to promote manufacturing sector such
as National Manufacturing policy,development of industrial corridor etc but sti
ll for a strong manufacturing based middle class to emerged much more has to be
done.




What measures has India taken so far to combat climate change effects? Examine.





The impact of climate change is a tremendous risk to the security and well-being
of countries. It directly affects livelihoods, reduces food-grain production, d
estroys homes and raises food prices. India is a party to United Nation framewor
k on climate change convention (UNFCC). To combat climate change and its effect
in future, India has taken many steps as-
1) National Action Plan on Climate Change (NAPCC) and state APCC is being implem
ented,
2) 30 solar cities have been planned to reduce at least 10 % dependence on convent
ional energy,
3) 8 National missions under NAPCC on Solar, Water, Himalayan ecosystem, Sustain
able habitat, Sustainable agriculture, `Green India', Enhanced energy efficiency, St
rategic knowledge for climate change have been started,
4) India hosted `Rio +20' in 2012,
5) The Government has a domestic mitigation goal of reducing emissions intensity
of Gross Domestic Product (GDP) by 20-25% by 2020 in comparison with 2005 level
,
6) Encouraging Indian industry to participate in Clean Development Mechanism (CD
M) program,
7) Launch of Compensatory Afforestation Fund Management and Planning Authority (
CAMPA),
8) Inclusion of Forestry within MGNREGA to increase forest area coverage,
9) Fuel efficiency norms has been tightened,
10)INSAT-3D the meteorological Satellite with advanced weather monitoring has be
en launched to close monitoring on Climate Change,
11) National environment policy, 2006 has been implemented,
12) Renewable Energy Procurement Obligation (RPO)
13) `Climate Change Action Program (CCAP)' a new umbrella Scheme has been approved b
y the Planning Commission for implementation during the 12th Five year Plan.
Proper Implementation of these programs and steps to control the rise in tempera
ture is necessary for India to avoid extreme weather events such as last year's fl
ash floods in Uttarakhand and cyclone Phailin in Odisha.
Measures and effects
1. National action plan for climate change.
This has led to development of solar power projects , hence india becomes a glob
al player in solar industry.
2. National biofuel policy
Jatropha plantation on non agricultural land , saves the agricultural land for f
ood production as well bio fuel a clean source is in supply .
3. Bharat emissions IV norms for vehicles.
4. BEE ratings on electrical appliances for energy management.
5. Wind farms and incentives from govt to develop clean energy.
6. Clean coal technology
7. Compulsory green building code.
8. New and renewable energy eg OTEC in kerala
9. 20-25 percent reduction in carbon emmission intensity below 2005 level by 202
0.
With this strategies has been drawn in 12th five year plan for
1. Waste management and pollution abatement
2. Degradation of forests and loss of biodiversity
3. Land mining and forest right
4. Issues of environment sustainibilty.




Comment on the nature and consequences of China's economic model and governance sy
stem under the existing political leadership. Do you think such a model suits In
dia? Critically comment.




The Chinese model of governanace is not the socialism of the past as envisaged b
y Diaoping or as practiced by Russia . It is however a form of state corporate c
apitalism where political elite (Princelings) control the economy through subsid
iaries.
Similarly their political system consists of Princeling rule , closed door meeti
ngs, dramatised elections and unpunished corruption at the cost of the poor. The
ir political system is seen as a means to achieve greater ends even at the cost
of widespread repression , human rights violations and state sponsored censure.
China has become the toast of the world in terms of economic growth , technologi
cal advancement and military prowess. However in my opinion this model is antith
etical to India.
It is true we suffer from a policy paralysis , bureaucratic nexus and red tapism
which has resulted in slowing down of economy. However even with these impedime
nts we have been the second fastest growing economy and have pulled out second l
argest number of people languishing in poverty.
Our political system envisiaging fundamental rights , holy principles of justice
, liberty and equality should never be sacrificed at the altars of development a
nd quixotic economic progress . Will of the people shall always be of paramount
importance and growth and greatness shall be achieved within the democratic para
meters .




Separation of powers is indispensable because under the Constitution, power divid
es itself so that reason can rule. In the light of recent tussle between various
organs of the state, critically comment on the statement.





The theory of separation of powers between the three organs of the Government is
considered as the basic structure of Constitution where each organ acts indepen
dently of one other. As absolute power corrupts absolutely, the organs ensure ch
ecks and balances by preventing the concentration of power under single authorit
y and protecting individual liberty.
But the separation is not watertight as there is overlapping in their functionin
g which is evident from the recent tussle between various organs.
Judiciary and Legislature
SC has held that Parliament had no legislative competence to enact Section 8(4)
of RPA underlining the increasing criminalization of politics. But Cabinet throu
gh ordinance attempted to protect convicted MPs and MLAs from facing immediate d
isqualification negating the SC order. The unilateral judicial solution undermin
es the importance of solutions based on compromise and consensus. SC judgment in
declaring Section 377 of the Indian Penal Code as unconstitutional has belittle
d the right of LGBT to live with dignity instead of protecting them.
Judiciary and Executive
The judicial solutions have curtailed the exclusive power of executives evident
from SC judgement on establishing Civil Service Board, fixing tenure of civil se
rvants, etc aimed to protect officers from wrongful pressure from their superior
s, political masters. SC in Shatrughan Chauhan Case has overstepped the exclusiv
e constitutional power of clemency of President providing humane treatment of co
nvict. But the SC's order to BCCI chief to step down is criticized to be an act of
judicial overreach.
Legislature and Executive
Though the separation is partial between legislature and executives in parliamen
tary democracy yet the vested interest of electoral politicking by providing res
ervations to backward community like Jat, TN government's decision to release pris
oners, etc. might provide short term electoral victory but has long term eroding
consequences.
Thus the organs need to function separately for the smooth functioning of the so
vereignty but narrow objectives of selfish interests and individual authority sh
ould not overpower the national interests.