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Approach – Answer: General Studies Mains Mock Test 1244 (2019)

1. Discuss the need of an Independent Fiscal Council (IFC) in bringing about transparency and
accountability in fiscal processes in India. (150 words) 10
Approach:
 Introduce by mentioning, in brief, the issues with the current fiscal regime.
 Discuss how a fiscal council would help to tackle these issues by bringing transparency and
accountability in fiscal process.
 Conclude by citing international scenario and committee/commission recommendations regarding
the same.
Answer:
The macroeconomic fiscal regime in India has faced a lot of criticism in the recent past related to poor
budgetary forecasting, understating fiscal deficits by use of ‘creative accounting’, increasing reliance on
Extra Budgetary Resources (EBRs), absence of uniform fiscal consolidation rules for centre & states, non-
adherence to Fiscal Responsibility and Budget Management (FRBM) Act targets etc.
These inadequacies within the existing fiscal policy regime can be appropriately bridged by setting up an
Independent Fiscal Council (IFC). Apart from preparing multi-year fiscal forecasts and defining
sustainable level of public debt, it would provide an independent assessment of the central
government’s borrowing. Such an institutional mechanism would lead to prudent fiscal management
practices, thereby improving transparency and accountability in fiscal process in the following ways:
 It would provide the necessary analytical and technical inputs in the formulation of government
budget, which would help in better projection of government’s revenue and expenditure plans.
 It will perform both ex-ante and ex-post analysis of the budget numbers and facilitate the
implementation of the fiscal policy rules (FRBM Act), thus promoting long-term sustainability of
public finances.
 It would help in harmonizing fiscal data and periodic assessment of finances across various
government levels.
 It will discipline lawmakers into complying with the obligations or at least explain the divergence
from the fiscal council’s assessment.
 It will promote the culture of proper disclosures and good accounting practices within the
government departments.
 It would help in taking better decisions, especially in case of emergency situations where
government may need to deviate from deficit targets and also ensure return to the normal path.
In a globalised world where market volatility depends upon various external factors, countries like India
need macroeconomic management as an active function round the year. International experience
suggests that a fiscal council improves the accuracy of fiscal policy projections and help countries stick to
fiscal rules. For instance, US-Congressional Budget Office (CBO) and the UK Office for Budget
Responsibility have effectively performed these duties.

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 In India, the NK Singh Committee on Fiscal Responsibility and Budget Management had recommended
setting up an Independent Fiscal Council. The proposal has been endorsed by IMF as well. Setting up an
Independent Fiscal Council would ensure long term sustainability and credibility of the fiscal policy in
India.

2. Recognizing the potential of exports in generating employment, a number of steps need to be taken to
address India's weakening export competitiveness. Analyze. (150 words) 10
Approach:
 Give a brief introduction highlighting the importance of export sector in general for India.
 Mention the potential of the sector in creating employment opportunities.
 Discuss steps required for addressing India’s weakening export competitiveness and achieving
employment generating export growth.
Answer:
In 2015, the world merchandise exports amounted to USD 16.6 trillion in which China accounted for
13.72% of these exports and India only 1.67%.

Export sector and employment generation

 Labor intensive sectors like gems & jewellery, leather and agriculture can help tackle the issue of
disguised and cyclic unemployment.
 Exports accounted for 14.5% of the total employment in India during 2012-13. As per an Exim Bank’s
research $1 million worth of exports supported 138 jobs during 2012-13 in India, which is far higher
than 5.2 jobs supported in the US during 2014.
 Further an ILO-WB study substantiates the positive impact of exports on employment, in terms of
higher wages and reduction in informality. Increased exports helped India convert 800,000 jobs from
informal to formal sector between 1999 to 2011.
As per a recent Crisil report, India’s export growth is decelerating at a time when the global environment
is becoming more conducive for trade. In 2017, while India’s export growth hovered around 9%, for
Vietnam and South Korea it was way higher at 24% and 18% respectively. The competitiveness of the
labour intensive export sectors namely, gems & jewellery, leather & leather products and readymade
garments has decreased over the last decade. Although it can be attributed partly to policy disruptions in
terms of demonetization, implementation of GST etc., the declining export competitiveness should not
be overlooked.
Steps to strengthen India’s export competitiveness:
 Improving physical connectivity by accelerating the completion of infrastructure projects such as
the Delhi-Mumbai Industrial Corridor (DMIC) and Dedicated Freight Corridors so as to reduce
delivery times and increase the reach of exporters.
 Ease labour and land regulations by introducing flexibility in labour provisions. All state
governments should speedily implement fixed-term employment (FTE) facility for all sectors.
 Strengthening the capabilities of Export Promotion Councils (EPCs), which would ultimately help in
increasing the share of Indian exports in crucial product markets covered by these EPCs.
 Better regulation by way of simplification of business regulations, ease of access to credit to export
sector, rationalisation of power tariff structures etc. would also promote global competitiveness of
Indian industries.
 Renewed focus on service sector is needed to maintain the significant role of this sector in balancing
India’s trade. For this, the recently established fund for enhancing 12 “Champion Services Sectors”
should be utilised effectively.

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  Focus on making exports from North-East competitive using existing BBIN network and BIMSTEC
framework to explore closer economic integration with the emerging economies of South East Asia
such as Laos, Vietnam etc.
 Boosting exports from MSMEs by providing them impetus through robust credit supply,
technological support and access to market.
In this era of globalization, India’s export sector has a huge potential in promoting growth, job creation
and shared prosperity. High exports growth, particularly in the labour-intensive sectors, is vital to
sustaining employment-generating growth.

3. Highlighting the main features of National Mineral Policy, 2019, discuss how it can help in ensuring
sustainable and responsible mining. (150 words) 10
Approach:
 Introduce by mentioning the reasons for introduction of the new policy.
 Mention key features and discuss how it encourages sustainable and responsible mining.
 Write an appropriate conclusion.
Answer:
Currently, mining sector in India is plagued by issues such as sub-optimal utilization of resources, illegal
mining activities, unscientific exploration methods, on site pollution due to dust, gases, noise, and
polluted water etc. which has negatively impacted the environment and local communities.
The New Mining Policy, 2019 attempts to resolve these issues and give a boost to the mining sector in
India. Some of its key provisions are:
 Increase the production of major minerals by 200 per cent in seven years, and reduce trade deficit
in mineral sector by 50 per cent in seven years.
 Attract private investment through various incentives like financial package, right of first refusal at
the time of auction etc.
 Introduces the concept of Exclusive Mining Zones, which will come with in-principle statutory
clearances for grant of mining lease so as to curtail delay in commencement of mining operations.
 Simplifies the clearance process and make it time-bound for mineral development and
commencement of mining operations.
 Encourages merger and acquisition of mining entities, and transfer of mining leases to ensure
seamless supply of ores and scaling up of business.
 Focuses on a long-term export-import policy for the mineral sector to provide stability for investing
in large scale commercial mining activity.
Besides focusing on these economic considerations, the policy does well to safeguard environmental
responsibility and ensure sustainable and responsible mining through following provisions:
 Evaluation of all mining activities against parameters of a comprehensive Sustainable Development
Framework.
 Identify critically fragile ecosystems and declare such areas as “no-go areas”/ “inviolate areas”.
 Incentivizing use of renewable sources of energy at mining sites to reduce pollution, carbon
footprint and operational costs.
 Appropriate sensitization training about environmental issues to all workers involved in mining
operations.
 Scientific mine closure to ensure restoration of ecology and regeneration of biodiversity.
 Constituting an inter-ministerial body to institutionalize the mechanism for ensuring sustainable
development in mining.
 Focus on rehabilitation and resettlement of communities affected from mining operations and
taking care of the employment loss due to mine closure.
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 However, the policy misses out on the following provisions:
 It does not specify standards and mechanisms for pollution monitoring in mining areas under the
concerned laws.
 It falls short in providing necessary guidance to ensure effective mine closure practices despite the
current financial assurance for this being insufficient.
 Further, in-principle clearance for exclusive mining zones would open up huge tracks of forest land
to multiple companies and investors for mining in one go.
 It only emphasises on simplifying clearances and not strengthening the quality of assessment.

4. Highlighting the salient features of the PM JI-VAN Yojana, analyze how it can assist in achieving the
vision and goals of the National Policy on Biofuels, 2018. (150 words) 10
Approach:
 Giving a brief introduction about PM JI-VAN Yojana, bring out its salient features.
 Mention the vision and goals of the National Policy of Biofuels, 2018.
 Analyze how PM JI-VAN Yojana can assist in achieving the vision and goals of the National Policy on
Biofuels, 2018.
Answer:
Pradhan Mantri JI-VAN Yojana is a tool to create second generation (2G) Ethanol capacity in the country
and attract investments in this nascent sector.
Its salient features include:
 Under the scheme, 12 commercial scale and 10 demonstration scale second generation (2G) ethanol
projects will be provided with a Viability Gap Funding (VGF) support.
 Expediting the setting up of second generation (2G) Ethanol bio refineries in India and bring in
economic viability in the projects.
 Providing the necessary policy framework and mechanism for selection and implementation of
commercial & demonstration projects based on lignocellulosic biomass.
 The ethanol produced by the scheme beneficiaries is to be mandatorily supplied to Oil Marketing
Companies to further enhance the blending percentage under Ethanol Blending Programme.
National Policy on Biofuels, 2018 expands the scope of raw material for ethanol production by allowing
use of Sugarcane Juice, Sugar containing materials like Sugar Beet, Sweet Sorghum etc. With a thrust on
Advanced Biofuels, the Policy indicates a viability gap funding scheme for 2G ethanol Bio refineries of Rs.
5000 crore in 6 years apart from additional tax incentives, higher purchase price as compared to First
Generation biofuels. It also aims at reducing import dependency of E10, cleaner environment, MSW
management, employment generation as well as additional income to farmers.
"Pradhan Mantri JI-VAN Yojana" is an initiative in this direction and it will reinforce and supplement the
National Biofuels Policy, 2018 as:
 The aims and expected outcomes of PM-JIVAN Yojana coincide with that of National Policy on Biofuels,
2018 especially on the front of second generation biofuels as JI-VAN Yojana aims to provide Viability
Gap Funding support to various second generation ethanol projects.
 By focusing on research & development in second generation Ethanol sector, it will promote adoption
of biofuels in the country.
 It aids in fulfilling the mandate of the Policy by seeking to reduce import dependency and ensuring
cleaner environment by cutting CO2 emissions.
 It will increase the remunerative price for farmers as the ethanol produced by the scheme
beneficiaries will be mandatorily supplied to Oil Marketing Companies (OMCs) such as Indian Oil,
Bharat Petroleum and Hindustan Petroleum.

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 The Ministry of Petroleum & Natural Gas has targeted to achieve 10% blending of ethanol in petrol by
2022. Despite efforts of the government such as higher ethanol procurement prices and simplification of
ethanol purchase system, ethanol procurement remains low. Therefore, an alternate route viz. Second
Generation ethanol from biomass and other wastes should be explored to bridge the demand-supply gap.

5. Zero Budget Natural Farming (ZBNF) provides an alternative to capital and chemical intensive
agriculture currently being practiced in India. Analyze. (150 words) 10
Approach:
 Briefly state the current status of conventional farming in India.
 Briefly explain the concept of Zero Budget Natural Farming (ZBNF).
 Discuss how ZBNF provides a viable option to the conventional farming which is capital and chemical
intensive.
 Suggest some steps that required to be taken to promote ZBNF.
Answer:
Conventional farming methods in India are heavily dependent on capital and fertilizers. Because of high
production costs, high interest rates, volatile markets and the rising costs of fossil fuel based inputs;
farmers get trapped in vicious debt cycle and makes farming an unviable vocation for the next cropping
season.
Zero Budget Natural Farming (ZBNF) is being seen and developed as an alternative to the conventional
farming method. It is a natural farming technique in which farming is done without use of chemicals and
without using any credits or spending any money on purchased inputs.
ZNBF reduces the cost of production down to zero due to utilisation of all the natural resources available
in and around the crops. It has attained wide popularity in the southern states, especially Karnataka and
Andhra Pradesh.
ZBNF as an alternative to commercial farming:
 ZBNF promises to end reliance on loans and drastically cut production costs, ending the debt cycle for
the farmers. Use of natural farming methods will also help curb use of fertilizers and pesticides.
 It replaces fertilizers and pesticides with organic inputs to ensure perfect soil conditions for plant
growth. Farmers use cow dung, urine, plants, human excreta and other biological fertilizers for crop
protection. For instance, a solution made with lilac and chillies can help protect plants from pests.
 It focuses on replenishing local species of earthworms on the farm to increase the organic matter in
the soil.
 It promotes adoption of mulching and Waaphasa so as to reduce the loss of natural moisture of the
soil, increase soil aeration, enhance soil health and fertility and ensure favourable microclimate in the
soil.
 It also promotes inter-cropping wherein combination of various crops is grown simultaneously to
produce greater yield on given piece of land by making use of resources that may be utilised by single
crop.
 It will provide resilient agriculture system in wake of climate change and increasing scarcity of water.
Mainstreaming ZBNF
ZBNF has been practiced for over a decade at small scale level across India. But in the recent times, it has
been adopted at a much larger scale in South India. Andhra Pradesh government in an effort to make
transition to 100% chemical free farming became the first state to adopt ZBNF.
However, few steps like scientific validation of ZBNF, policy traction to pull farmers out from corporate
sponsored chemical based farming, scaling up of investment, diverting existing subsidies away from
chemical fertilizers and strengthening the existing Krishi Vigyan Kendra Network can help in widespread
adoption of ZBNF.
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 According to UN Environment, Zero Budget Natural Farming also creates the social capital necessary for
vibrant and inclusive agricultural production, by establishing farmers’ federations and self-help groups,
and placing farmers at the forefront of knowledge creation and dissemination.

6. Marine life is facing 'irreparable damage' from the millions of tonnes of plastic waste which ends up in
the oceans each year. In this context, examine the implications of plastic pollution on marine
ecosystem and suggest some measures for addressing this problem. (150 words) 10
Approach:
 Introduce by highlighting the scale of the problem of plastic pollution with respect to marine ecosystem .
 Mention the impact of plastic pollution on marine ecosystem.
 Discuss the steps that are needed to be taken to tackle this menace.
Answer:
It is estimated that around 10 million tonnes of plastic ends up in oceans every year. As per World
Economic Forum (WEF) studies by 2050, there will be more plastic in the oceans than there are fish. The
main sources of marine plastic are urban and storm runoff, industrial activities, fishing industry,
aquaculture etc.
Impact of plastic pollution on marine ecosystem:
 On marine organisms:
o Sea birds, turtles, dolphins and seals get physically injured when they get entangled in plastic
waste like fishing nets. They also mistakenly consume plastic waste. It leads to internal blockages
and may result in deaths.
o According to a recent study, corals that come into contact with plastic have an 89% chance of
contracting disease.
o Micro plastics are consumed by small marine animals and enter the food chain. It leads to bio-
accumulation of plastic in larger animals including human beings.
 On marine economy and coastal community:
o Plastic waste damages the aesthetic value of tourist destinations, leading to decreased tourism-
related incomes.
o According to UN, environmental damage caused by plastic to marine ecosystems amounts to 13
billion USD. This includes like cleaning costs of the beaches and loss to fisheries industry.
 On ocean health:
o Plastic waste accumulates in areas of the ocean where winds create swirling circular currents,
known as gyres, which suck in any floating debris. For e.g. Great Pacific Garbage Patch in the
north-central Pacific Ocean is the largest accumulation of plastic in the world.
o Incineration of plastic waste increases the carbon emissions, which adversely affects the ocean
health and its inhabitants.
Measures needed to address the problem of marine plastic pollution are as follows:
 Reducing barriers to financing better waste management, particularly in countries like China,
Indonesia, etc.), that are responsible for 60% of the plastic waste entering the ocean.
 Transition away from a linear (make, use, dispose) economy towards a circular economy where
resources, such as plastics, are used, recovered and reused.
 While industries’ support for initiatives that help recycle and clean-up plastics are important, they
should urgently introduce alternative sustainable packaging.
 As the problem of plastic pollution affects marine life across all oceans, there is a need for
multilateral efforts including governments, Civil societies and global organizations.
 More countries should include education regarding plastics and waste management in the school
curriculum to raise public awareness.

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 Given the enormity of the problem, several global initiatives like UN Environment's Global Plastics
Platform have been launched. New Plastics Economy Global Commitment is an initiative by 250
organizations responsible for 20% of plastic use to achieve a circular economy for plastic. Many
countries including India and Canada aims to eliminate single use plastic in near future.

7. Write a short note on the evolution of Bharat Stage norms in India. Also discuss the significance and
challenges posed by the planned introduction of BS-VI norms in India from the year 2020.
(150 words) 10
Approach:
 Explain what Bharat Stage norms are and chart its evolution in India.
 Highlight the importance of introducing BS-VI norms in India.
 Elaborate on the challenges associated with this step.
 Conclude by presenting a way forward.
Answer:
Bharat Stage norms are the emission standards instituted by the Government of India to regulate the
emissions of air pollutants such as nitrogen oxides(NOX), carbon monoxide(CO), hydrocarbons(HC),
particulate matter (PM) and sulphur oxides(SO2) from motor vehicles using internal combustion engine
equipment. These standards and the timeline for the implementation are set by the Central Pollution
Control Board (CPCB).

 The Bharat stage norms, based on the Euro norms, were first introduced in 2000 whereby passenger
cars and the commercial vehicles met Euro I equivalent India 2000 norms.
 The first Auto Fuel Policy announced in 2002 laid down the Emission and Fuel Roadmap up to 2010.
Four-wheeled vehicles moved to Bharat Stage III emission norms in 13 metro cities from 2005 and
rest of the country moved to Bharat Stage II norms.
 Bharat Stage IV for 13 Metro cities was implemented from 2010 onwards and the rest of the country
moved to Bharat Stage III. Bharat stage IV norms were extended to rest of the country from 2017
onwards.
In 2016, the Indian government announced that the country would skip the BS-V norms altogether and
adopt BS-VI norms by 2020.

Pic
credit: Indian Express

Significance of the planned introduction of BS-VI norms in India: These norms are in tune with global
standards and will significantly address vehicular emissions, one of the biggest contributions to air
pollution in India by:
 Reducing reduce sulphur content to 10 ppm sulphur from 50 ppm in BS IV fuels.
 Bringing PM2.5, PM10 in diesel cars down by 80% compared to BS IV.
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  Bringing down NOX by 70% in diesel cars and 25% in petrol cars.
 Making on-board diagnostics (OBD) mandatory for all vehicles. OBD device informs the vehicle
owner or the repair technician about the efficiency of the systems in the vehicle.
Challenges posed by the planned introduction of BS-VI norms:

 Automakers:
o Dual challenge of clearing out BS IV inventory soon and building up sufficient BS VI inventory for
sales purposes.
o Compliance with BS-VI norms will require higher investment in technology to upgrade vehicles.
 Buyers: BS-VI-compliant vehicles will be more expensive which may affect demand in the Indian auto
industry.
 Administrative issue: There is a lack of coordination between the Petroleum and Natural Gas
Ministry and the Ministry of Road Transport and Highways regarding the enforcement time of new
norms.
 Other challenges:
o Oil companies will have to ensure that BS VI fuels are available across the country.
o Huge investment is required for upgrading refineries to implement the clean fuel technology.
However, these challenges appear miniscule given the huge environmental and economic costs caused
due to high vehicular air pollution. Implementation of BS VI norms is also in line with India’s
commitments towards the Paris Climate Agreement, according to which India has taken the
responsibility to cut down its carbon footprint by 33-35%. Introduction of BS VI norms is a positive step
towards maintaining balance between environmental sustainability and market competitiveness.

8. What are black holes? Highlight the challenges in imaging a black hole? How were these challenges
overcome by the Event Horizon Telescope project? (150 words) 10
Approach:
 Briefly discuss about black holes and its features.
 Discuss about the Event Horizon Telescope project started for imaging of a black hole.
 Discuss the challenges in imaging of a black hole and strategies used to overcome them.
Answer:
A black hole is a region of space-time exhibiting gravitational acceleration so strong that nothing—no
particles or even electromagnetic radiation such as light—can escape from it. The region where
gravitational influence of blackhole is so great that even light can’t escape is known as Event Horizon.
The gravity is so strong because matter has been squeezed into a tiny space. This can happen when a
star much heavier than sun is dying.
Imaging of a black hole:
The Event Horizon Telescope (EHT), a planet-scale array of eight ground-based radio telescopes forged
through international collaboration, captured the image of a supermassive black hole in the center of
the galaxy M87 and its shadow by making a telescope as big as our entire planet.
The challenges in imaging of a black hole and strategies used to overcome them:
 As no light can get out from black hole, it can't be directly observed. However, gas and dust falling
into the black hole outside event horizon swirls around it, forming an accretion disc. In the accretion
disc, the gas gets get heated and emits radiation. This radiation can escape black hole can be
detected. This was captured by EHT.
 The biggest challenges were gathering enough light from a distant black hole, and having enough
magnifying power to resolve the details. Both are solved by using multiple large radio telescopes

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 scattered throughout the world. By combining their observations, astronomers effectively created a
single telescope with a lens as big as the planet.
 Combining data from telescopes, each with different characteristics, was a separate challenge. EHT
used Very-Long-Baseline Interferometry (VLBI), a technique that combines the observing power of
telescopes around the world and their data to create a virtual giant radio telescope.

 During observing through EHT, several kinds of noise and errors interfered with the telescope’s
performance. For e.g., earth’s atmosphere blocks a certain range of wavelengths. To minimize the
effect of atmospheric absorption, radio telescopes were built on high and dry sites.
Projects such as the EHT succeed owing to interdisciplinary expertise that people bring to the table. This
experiment endorses the diversity of collaboration just as much as it does unrelenting patience and good
faith in the power of science and reason.

9. While mentioning the objectives of the Arms Trade Treaty (ATT), discuss the challenges which are
hindering the utilization of the ATT to its full potential. (150 words) 10
Approach:
 Introduce by giving a brief account of the Arms Trade Treaty (ATT).
 Enumerate the objectives of the Arms Trade Treaty.
 Discuss in brief the challenges which hinder the implementation of the ATT to its full potential.
 Conclude by giving a way forward.
Answer:
Conventional weapons are used to wage war and contribute to immeasurable human rights violations.
Therefore, the Arms Trade Treaty (ATT), adopted in 2013, was approved by the 193-member U.N.
General Assembly. It is the first international legally binding treaty to control the transfers of
conventional arms. Following are the objectives of ATT:
 Establish the highest possible common international standards for regulating or improving the
regulation of the international trade in conventional arms;
 Prevent and eradicate the illicit trade in conventional arms and prevent their diversion to ensure:
o International and regional peace, security and stability;
o Reduction in human suffering;
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 o Cooperation, transparency and responsible action by State Parties in the international trade in
conventional arms, thereby building confidence among State Parties.
Even after five years of its implementation, governments have failed to utilize the ATT to its full potential
because of the following challenges:
 National legislation: Countries are particularly conscious of the legally binding nature of the ATT and
do not seem willing to proceed with ratification/accession until its text is fully analyzed against the
national legislation. For example, countries like USA, Israel, UAE, etc. have signed the treaty but have
not ratified it yet.
 Regional security: In some cases, unstable regional security influences a country's willingness to join
a treaty that has the potential to limit its ability to transfer arms. For example, countries like North
Korea, Iran and Syria are in opposition to the treaty.
 Limited inter-agency cooperation: This problem results from a combination of multiple factors like
lack of established formal guidelines for cooperation, lack of adequate formal and informal networks
among key stakeholders and lack of adequate infrastructure to facilitate information sharing and
exchange.
 Civil society concerns: Groups concerned about the national sovereignty or individual rights to
armed defense have been negative towards implementation of ATT. For example, USA based groups
like National Rifle Association (NRA), the National Shooting Sports Foundation, etc.
 India’s specific concerns:
o India has raised concerns about the treaty not addressing the issue of illicit trafficking and use of
conventional arms.
o Also, ATT is not able to ensure a right balance of obligations between exporting and importing
states.
o Further, India believes that there is an inherent bias in the treaty towards exporting states who
can take unilateral measures against importing states without impending consequences.
The above challenges can be effectively addressed through a consensus based multi-stakeholder
approach. Member states of the treaty must ensure that the promise of the ATT is not forgotten and
that meaningful and effective implementation goes hand-in-hand with efforts to mitigate the negative
consequences of unregulated and irresponsible arms transfers.

10. Threats to internal security of India may be posed both through the communication networks and also
to the networks. Discuss. Also, highlight the steps taken by the government in making the networks
more secure. (150 words) 10
Approach:
 Briefly explain the interdependence between communication network and internal security of India.
 Explain the threats posed to and from such networks.
 Explain some critical challenges associated with resolving these threats.
 Highlight the steps taken by government in this regard.
Answer:
IT Act 2000 considers communication network as a part of critical information infrastructure whose
incapacitation or destruction can have debilitating impact on national security, economy, public
health or safety.
The following factors make vulnerability of communications networks serious:
 Interconnectedness of sectors
 Proliferation of exposure points
 Concentration of assets

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 Therefore, threat to the internal security emanates both through the communicati on network and
to it.
Threats from/through the network:
 It includes hacking, data theft, cyber-frauds, cyber terrorism with the help of viruses, worms,
botnets, phishing, etc. This can have adverse effect over government systems, business
ecosystems and financial institutions such as banks and stock exchange.
 These networks can be used by terrorist groups for communication, transfer of funds,
radicalization and spreading extremist ideologies.
Threats to the network:
 Nation states, non-state actors and individuals can negatively impact data integrity, information
privacy and network availability of communication networks.
 Attacks on communication networks endanger the connectivity of other critical infrastructures
such as civil aviation, shipping, railways, power, nuclear, oil and gas, finance, banking,
communication, information technology, law enforcement, intelligence agencies, space,
defence, and government networks.
However, securing the communication network in India remains a complex task because a
significant part of hardware and software that make up the communications ecosystem is sourced
externally, which increases its vulnerability.
In view of this, the Government of India has taken following steps:
 Developing security standards such as Telecom Testing and Security Certification for equipment and
devices; aligning them with global standards & harmonizing the existing legal & regulatory
framework.
 Strengthening security testing processes by both establishing comprehensive security certification
regime & enhancing institutional capacity through domestic testing hubs and laboratories with
state-of-the art facilities.
 Formulating a policy on encryption and data retention, by harmonising the legal and regulatory
regime in India pertaining to cryptography with global standards, as applicable to communication
networks and services.
 Facilitating security and safety of citizens by establishing Central Equipment Identity Registry for
addressing security, theft and other concerns.
 Facilitating lawful interception of all digital communications with state of the art lawful intercept
and analysis systems for implementation of law and order and national security
 Increasing awareness amongst users about security related issues concerning digital
communications networks, devices and services.
 Establishing a Security Incident Management and Response System through sectoral Cyber Security
Incidence Response System (CSIRT).
 Improving information sharing and coordination between various security agencies, including
CERT-In and sectoral CERTs as may be necessary.

11. Highlight the importance and challenges related to integration of Variable Renewable Energy (VRE) in
India. Mention some steps that can be taken for its smooth integration with the synchronized Indian
grid. (250 words) 15
Approach:
 Briefly explain the concept of Variable Renewable Energy (VRE) and grid integration.
 Mention the importance of VRE integration for India.
 Mention the challenges related to VRE Integration in India.
 Mention some steps required for smooth integration of VRE with the grid.

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 https://t.me/visionpt3652019
Answer:
Variable Renewable Energy (VRE) refers to any electricity generation technologies whose primary energy
source varies over time and cannot easily be stored. VRE sources include solar, wind, ocean and some
hydropower generation technologies. The practice of developing efficient ways to deliver variable
renewable energy to the electric distribution and transmission system is called grid integration.
Importance of VRE integration for India:
 Environmental benefits: Reduced GHG and other emissions due to reduction in the use of power
obtained from fossil fuel. Further, it will help in achieving INDC targets.
 Social Benefits: Besides improving health indicators, it will improve access to power and ensure
energy security.
 Economic Benefits: Extra energy can be sold back to the utility, reduced expenditure on import of oil
and gas, cost of electricity will be lowered, creation of new jobs etc..
Challenges related to VRE integration in India:
 Technical challenges:
o Grid expansion and upgradation: Scaling up VRE generation would require grid expansion and
upgrades to enable access of VRE resources, which are often remote from existing transmission
networks.
o Reliability: Difficulty to estimate capacity of such a system to adequately meet long-term
electricity demand especially, due to dependence of VRE upon highly variable weather
conditions.
 Regulatory and Policy challenges:
o Inter-state linkages: Concentration of sources in few states, necessitates adequate market
operations and support services to be put in place, to encourage interstate trading of the RE.
o Variable regulations: Not many states have undertaken adequate steps for aligning the state
regulations with the central regulations. Further, many states don’t have regulations regarding
trading surplus power, reserve sharing between states etc.
 Economic challenges:
o Resources availability: System operators need to ensure that they have sufficient resources to
accommodate significant variations in generated power for maintaining system balance.
o Low market price: VRE tends to depress market prices for electric energy, which hampers the
prospect of power producers.
Steps for smooth integration with the synchronised grid:
 Reducing uncertainty of VRE:
o Advanced Forecasting can help enhance efficiency and reduce costs of balancing the system.
o Improved renewable energy procurement to allow buying/selling of power at rapid speed at
power exchange to manage sudden ramping up and down.
o Other steps include transmission expansion, advanced generators which can start, stop and
ramp quickly and a storage system solution that can provide constant frequency and voltage.
 Achieving flexibility in the existing grid system:
o Fair price mechanism should be developed to enable fair price discovery and compensation of
flexible resource providers.
o Incentivising decentralised and small-scale RE generation as well, which is close to end users,
should be given equal priority vis-a-vis the large-scale/centralized RE sources.
 Regulatory and Institutional Measures
o Establishment of REMCs (RE Management Centres) at state, regional and national level with full
real time data availability.
o Build confidence among investors and operators that the power system can be operated
reliably at increased VRE levels.

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 In this regard, NITI Aayog has suggested treating RE as a resource of national and strategic importance
and taking an integrated approach to power sector planning, including generation, transmission, and
distribution.

12. There have been arguments that India could fall into a 'middle income trap'. Explaining the
phenomenon, highlight the reasons behind such arguments. How can India avoid it? (250 words) 15
Approach:
 Explain what you understand by a ‘middle-income trap’.
 State the reasons behind arguments that India could fall into the ‘middle-income trap’.
 Suggest measures for India to avert the trap.
Answer:
A middle-income trap is a theoretical economic development situation in which a middle income country
is unable to break into the higher-income league due to operation of several adverse factors. The World
Bank defines 'middle-income range' countries as those with GNP per capita between $1,000 to $12,000
at constant (2011) prices. India has been in the range since 2008.
There have been arguments that India could fall into the trap due to the following factors:
 Demand-driven growth: India’s growth has mostly been driven by demand generated by around 100
million people at the higher end of the country’s socio-economic pyramid. However, that demand
has begun to exhaust, which is evident from slowdown in auto sales in recent times.
 Declining consumption by the middle-class: This is fuelled by decline in income growth, decreasing
money supply and rising uncertainty, due to internal factors such as demonetisation and GST.
 Slowdown in economic growth: The CSO in its national account data revealed a downward trend in
the growth estimate for FY 2019 from 7.2% to 7%, which is the lowest in the last five years.
 Backlash against globalisation: Hyperglobalisation that benefited the early convergers like China,
South Korea & Japan led to a backlash in the advanced countries, as seen through increasing
protectionism & lowering world trade to GDP ratios since 2011. This means that similar trading
opportunities may no longer be available for the new convergers like India.
 Social inequality: Wealth inequality and hierarchical distribution of income act as barriers to
equality. This leads to lop-sided expansion.
 Lending issues: The Non-Banking Financial Companies (NBFCs) and banks are facing multiple
problems such as asset-liabilities mismatch of NBFCs, rising Non-Performing Assets (NPAs) of banks,
due to which their credit lending capacity is hampered.
However, the Economic Survey of 2017-18 stated that middle-income countries as a group continued to
grow as fast as or faster than the convergence standard demanded. Further, there is no actual data to
reveal the middle-income trap.
Some measures to avoid the middle-income trap include:
 Mobility restraints at lower-levels and middle-levels of the socio-economic pyramid need to be
addressed by improving the quality of healthcare, education, skill development, increase in income,
etc. The economy needs to rise as a whole and not in parts.
 Policies that support the growth of ideas and innovation need to be adopted to enable a successful
transition from a resource-intensive economy to a high income, knowledge-based economy.
 Incentives for expansion of the industrial and manufacturing businesses, which can recruit a large
number of workers and boost exports.
 Measures should be taken to improve the lending capacity of banks and NBFCs such as infusion of
capital, improving the management of NPAs, improving corporate governance, etc.

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  Steps towards efficient utilisation of natural resources – such as land, air and water, which are
reeling with acquisition disputes, alarming pollution levels and lack of availability respectively – are
also required to sustain the existing growth.
Policy makers should focus on sustainable long-term goals to ensure that the economic growth is on an
upward trend and India’s potential to be the fastest growing economy is not hampered.

13. Highlighting its importance, discuss the major issues that plague effective monetary policy
transmission in India. Also, mention the steps taken by RBI to improve it. (250 words) 15
Approach:
 Briefly explain concept of monetary policy and its objectives
 Bringing out brief meaning of Monetary Policy transmission, discuss its importance of effective
monetary policy transmission.
 Discuss the major issues with monetary policy transmission in India.
 Enumerate the steps that have been taken by RBI to improve monetary policy transmission.
Answer:
Monetary policy is the macroeconomic policy laid down by the Central Bank with regard to management
of money supply and interest rate in an economy. It represents the demand side economic policy, which
is used by the government of a country to achieve broader macroeconomic objectives like inflation,
consumption, growth and liquidity through open market operations, bank rate policy reserve system,
credit control policy, etc.
Monetary Policy transmission refers to the process by which a central bank’s monetary policy signals
(like repo rate) are passed on to financial set up of the economy. For instance:
Repo rate↓ → Interest rate ↓→Consumption, Investment↑ →Output↑→ Growth↑
Importance of effective monetary policy transmission:
 Effective transmission would help enhance the private investment activity, which in turn would spur
growth through investment in infrastructure and other capital formations for the economy.
 It would ensure enough liquidity in the economy to counter any unseen financial constraints.
 It would make the economy more dynamic and quick to respond to the rapidly changing economic
scenario in India as well as globally.
 It would be helpful in reducing the impacts of inflation very quickly and will also achieve the
objectives of other fiscal considerations in time.
However, the available evidence suggests that monetary policy actions in India are felt with a lag of 2-3
quarters on output and with a lag of 3-4 quarters on inflation.
Issues with monetary policy transmission
 Liability in deposits: Transmission is difficult because the public sector banks do not borrow from
RBI but depend majorly on public deposit for their business.
o Fixed interest rates: In India, about 50% of the bank liabilities are in the form of fixed deposits,
which are predominantly at fixed interest rates for 1-3 years, thereby imparting rigidity in
changing rates by banks.
o Long Maturity Period: Further, over 36% of the term deposits of banks have maturity of three
years and above, implying their rates cannot be reset frequently.
 Worsening asset quality: The deterioration in banking sector health due to losses from large
stressed assets pushes banks to protect their net interest margins to maintain profitability even
though for the short-term.
 Self-imposed rigidity through spreads: Although a large proportion of loans in India are at floating
rates, which are linked to some benchmark rate, banks also charge a spread over the benchmark to
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 factor in inflation and credit risk. These spreads are adjusted by the banks to offset the changes in
benchmark rate, thereby impacting the overall reduction in lending rates.
Over the years, RBI has made several attempts to improve the speed and extent of the monetary policy
transmission:
 By refining the process of setting lending interest rates by the banks: The present benchmarking
system in the form of marginal cost of funds-based lending rate (MCLR) system have come after
transitioning from several rates such as prime lending rate, benchmark prime lending rate and base
rate system.
 By cleaning up the banking sector: RBI keeps on revising norms regarding dealing with defaults
whereby in past it also resorted to one-day default rule. Further, Prompt Corrective Action (PCA)
framework of RBI is an essential element of its financial stability framework which lays out various
mandatory and discretionary actions for structured early intervention and resolution by regulators
for banks.
 Financial Inclusion: Increasing financial inclusion through various steps like Jan Dhan Yojana, Banking
correspondents, etc. has been implemented to widen the depositors’ base.
 Cash Reserve Ratio (CRR): Currently, CRR is at all-time low of 4 per cent, which is rationalized to
inject liquidity.
There is no perfect system across the world but ultimately as markets develop and deepen, it will impart
more transparency in benchmark rates which can be used for transmission. India needs to continue to
experiment and the work-in-progress but the process requires more time.

14. Highlight the constraints faced by rainfed agriculture in India. Discuss some agronomic practices that
can be adopted for stabilizing agricultural production in rainfed areas. (250 words) 15
Approach:
 Introducing the concept of rainfed agriculture, briefly discuss its importance in India.
 Bring out the challenges faced by rainfed agriculture in India.
 Discuss some agronomic practices that can be adopted for stabilizing production in rainfed areas.
 Conclude with further measures.
Answer:
Rain fed agriculture is a form of agriculture that depends on rain water for its irrigation. Rain-fed areas
contribute significantly to the India’s food production and cover around 65 percent of the net sown area.
In addition to contributing to major production of millets, pulses, cotton, oilseeds, and around 40 per
cent rice production, rainfed agriculture also supports livestock economy.
However, it is marred by certain challenges such as:
 Low public investments: Even though rainfed agriculture contributes to 60 per cent of the value of
agriculture GDP of India, it receives little attention when it comes to public policy. This is visible with
the lack of public investment in rainfed areas as against irrigated areas.
 Lower remuneration: According to statistics from the National Rainfed Area Authority (NRAA),
farmers in rainfed areas earn only 20-30 per cent from farm-related activities as against other
farmers. Market access is also a major problem due to lack of rural road infrastructure.
 Low procurement under Minimum Support Price (MSP) regime: The pricing policy is also biased in
favour of certain crops. For instance, the government spent Rs. 5,40,000 crore on procuring rice and
wheat at MSP (Minimum Support Price) between 2003-04 and 2012-13, its expenditure on
procurement of major rainfed crops such as coarse cereals, millets and pulses during the same
period was merely Rs. 3,200 crore.

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  Misalignment of cultivation practices: Cultivation of water intensive crops in rain fed areas further
worsens the situations. For e.g. it is argued that sugarcane cultivation in fact is the main reason for
the drought in Marathwada.
 Lack of research and development: Lab to land transfer of technology in these areas remains dismal.
Also, various hybrid seeds are not suitable for rain fed areas due to lack of water and thus
hampering any efforts to attain higher yield.
 Climate change: Changing soil composition and variability of rainfall in wake of climate change is
also a major challenge.
In order to address these challenges, certain agronomic practices can be adopted which can solve the
inequities between rainfed and irrigated agriculture. For example:
 Agronomic management practices: Various practices such as inter and multi cropping and crop
rotation, shifting to non-farm activities, insurance covers, up scaling techniques such as solar pumps,
drip irrigation and sprinklers could be adopted for stabilizing crop production in these areas.
 Land and water use management: Practices such as dry land farming, precision farming, and
rehabilitation of rainfed wastelands as well as watershed management in these areas.
 Holistic soil health management: Soil-quality improvement through conservation agricultural
practices, balanced fertilization, harnessing the potential of biofertilizers and microorganisms, as
well as carbon sequestration practices.
 Crop planning: Crop varieties for dryland areas should be of short duration and high yielding which
can be harvested within rainfall periods and have sufficient residual moisture in soil profile for post-
monsoon cropping.
 Integrated weed management: Weeds being more aggressive, adaptive and persistent pose serious
threat to crop production in dryland areas. Integrated weed control strategies can result in
sustainable crop production and provide livelihood security in such regions.
Apart from that there is need to foster the process of climate adaption in agriculture through adoption
of Climate Smart Agriculture. Also, there is urgent need to educate farmers and reorient Krishi Vigyan
Kendra and other grass root organizations with specific and more funds for better risk coping measures.

15. Despite the steps taken by the government in recent years, a number of problems continue to persist
in the urea sector in India. Discuss. What reforms should be taken to address the persisting problems?
(250 words) 15
Approach:
 Give a brief account of Urea sector in India.
 Highlight various steps taken by the government in recent years.
 Discuss various problems that continue to persist in the urea sector in India.
 Bring out the measures needed to address the problems in the urea sector in India.
Answer:
India is the 2nd largest consumer of urea fertilizers after China. It is projected that urea production in
India would have been around 24.4 million tons in 2018-19. Around 80% of local demand is fulfilled by
the domestic industry and remaining from imports. Also, nearly 70 per cent of fertilizer subsidy is
allocated to urea, making it the largest subsidy after food. India is aiming to end urea imports by 2022.
Considering its significance, various measures like Neem Coating of urea, Gas Pooling policy, National
Urea policy, Soil Health Card scheme, New Investment Policy, 2012, etc. were introduced. These steps
are intended to facilitate investment in public, cooperative and private sectors and the rapid build-up of
urea production in the country.
However, despite these steps, there are many problems, which continue to persist, such as:
 Black-marketing: Under-pricing of urea has led to its diversion to non-agricultural areas and
smuggling to neighbouring countries such as Bangladesh and Nepal.
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  Distorted consumption pattern: Nutrient based subsidy and present pricing policy encourages
unscientific overuse of urea, which diminishes soil productivity and pollutes water (especially in
Haryana and Punjab).
 Leakages: Though urea prices are fixed by the government, still farmers find its price varying due to
practices such as hoarding etc.
 Costly feedstock: Around 20% of urea plants still operate on either naphtha or fuel oil as feedstock,
which involves higher capital cost than natural gas. Natural gas availability is also a key concern in
gas-based plants.
 High canalisation of urea import: Only selected few state enterprises are allowed to import urea
that often leads to mismatch in demand and supply.
 No new capacity addition: Decline in investment due to regulated pricing stagnate domestic
production leading to increased dependence on urea import.
Suggested reforms
 Bringing urea under the Nutrient Based Subsidy program would allow domestic producers to
continue receiving fixed subsidies based on the nutritional content of their fertilizer, while
deregulating the market would allow domestic producers to charge market prices.
 Incentivize companies to set up urea plants by providing inputs such as naphtha, natural gas at lower
rate. Also, promote energy efficiency in urea production.
 Rationalize the use of fertilizers by giving information about nutrient status of soil and improving soil
conditions through agronomic practices.
 Provide subsidy through direct cash transfer to curb diversion of urea and improve targeting through
robust implementation of JAM trinity and universal subsidy with caps on number of subsidized bags
each house hold can purchase.
 Decanalising urea imports would allow fertiliser supply to quickly respond to changes in domestic
demand.
 Encouraging Indian firms to locate plants in countries where energy prices are cheap such as Iran
and secure long-term fertilizer supplies. For e.g. success of joint venture between India and Oman to
produce 1.6 million tonnes of urea in Oman for its dedicated use in India.

16. What is Access and Benefit Sharing? Explain how it aids in sustainable use of biodiversity. Also,
mention the different global and national level mechanisms for ensuring Access and Benefit Sharing
(250 words) 15
Approach:
 Define Access and Benefit Sharing.
 Explain how it aids in sustainable use of biodiversity.
 List the global and national level mechanisms for ensuring Access and Benefit Sharing.
Answer:
Access and Benefit Sharing (ABS) refers to the way in which genetic resources may be accessed and the
benefits that result from their use are shared between the people or countries using the resources
(users) and the people or countries that provide the (providers).
Importance of ABS in aiding sustainable use of biodiversity:
 It acknowledges the sovereign right of countries to exploit their own genetic resources. It includes
the right to control and limit access and impose benefit-sharing obligations on the users of these
resources.
 It ensures that the way in which genetic resources are accessed and used maximizes the benefits for
users, providers, and the ecology and communities where they are found.
 It ensures that appropriate genetic resources with relevant traits are available and accessible which
is crucial for food security.
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  It recognises valuable traditional knowledge associated with genetic resources that come from
Indigenous People and Local Communities (ILCs), which can be applied for conservation.
 It provides legal certainty and transparency for all stakeholders by establishing more predictable
conditions for access to genetic resources.
Global level mechanisms for ensuring ABS:
 Access to genetic resources and the fair and equitable sharing of the benefits arising from their
utilization is one of the three objectives of the Convention on Biological Diversity (CBD).
 The Nagoya Protocol includes obligations related to access to genetic resources (including those
related to traditional knowledge of indigenous people), benefit-sharing and compliance with
domestic legislation or regulatory requirements on ABS.
o It calls for prior informed consent (PIC) being granted by a provider to a user and negotiations
between both parties to develop mutually agreed terms (MAT) to ensure the fair and equitable
sharing of genetic resources and associated benefits.
o It also establishes the Access and Benefit-Sharing Clearing-House (ABSCH) as a platform for
exchanging information and facilitating implementation of the Protocol.
 FAO Conference, in 2001, adopted the International Treaty on Plant Genetic Resources for Food
and Agriculture, the first legally binding and operational international instrument for access and
benefit-sharing for genetic resources.
National level mechanisms for ensuring ABS:
 India, being a signatory to the CBD, enacted the Biodiversity Act in 2002, with three main objectives:
o conservation of biological diversity,
o sustainable use of its components and
o equitable sharing of benefits arising out of the use of biological resources.
 NBA has teamed up with the National Informatics Centre to enable e-filing of ABS applications.
 Further, India adopted Nagoya Protocol (2014) in pursuance of which, NBA published ABS
guidelines, 2014 which provide a detailed procedure for determination and sharing of benefits
arising out of the use of biological resources obtained from India.
 UNEP-GEF MoEF project on ABS is being implemented in 10 states to achieve biodiversity
conservation through implementing ABS agreements in India.

17. Stating the significance, discuss the challenges in achieving disaster resilience of infrastructure.
Suggest some ways for mainstreaming it in the development paradigm. (250 words) 15
Approach:
 Briefly explain disaster resilience of infrastructure (DRI) and highlight its significance.
 Mention the challenges in achieving DRI.
 Describe ways for mainstreaming DRI in the development process.
 Briefly conclude on the basis of afore-mentioned points.
Answer:
Disaster resilience of infrastructure (DRI) refers to such an infrastructure, which can withstand huge
damage from any kind of natural or human induced disaster. It is designed, located, built, operated and
maintained in a way that maximises the ability of built assets and associated support systems. It also
helps people that reside or work within the built assets, to withstand, recover and mitigate the impacts
of extreme hazards.
Significance of achieving disaster resilience of infrastructure:
 It is a key component of disaster preparedness. It will help in reducing mortality and the number of
affected people.

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  It will reduce the disruption in provision of basic social services as well as economic and heritage
losses.
o Globally, over the next 15 years, global disaster losses in the built environment are estimated at
$415 billion.
o The Sendai Framework for Disaster Risk Reduction (SFDRR), 2015-2030 and Goal 9 of the
Sustainable Development Goals (SDGs) recognize disaster resilient infrastructure as a crucial
driver of economic growth and development.
 It will minimize the risk to critical structures such as a nuclear power plants, helping in preventing
another Fukushima type disaster.
 It will expedite response and recovery efforts in case of disasters as the scale and volume of
damage done will be reduced.
 If the extremes in climate related events increase marginally, losses due to it are expected to rise
exponentially making investments in DRI even more important.
 With half of the infrastructure needed in Asia by 2050 yet to be built, investing in DRI today will
create disaster risk resilience (DRR) for future generations as well and may reduce reconstruction
and rehabilitation costs.
Challenges in achieving DRI:
 Lack of comprehensive regulatory framework and technical expertise related to building a disaster
resilient infrastructure.
 Rapid urbanisation and unplanned development of cities have created urban slums and
unauthorized colonies. Relocating them without much social disruption is a huge challenge.
 Substantial amount of funds will be required in relocating existing vulnerable structures, enforcing
resilient building codes and standards, use of hazard resilient designs, specifications, construction
methods, materials and technologies.
 Inadequate financial and technical capacity of urban local bodies and lack of qualified human
resources on disaster risk reduction (DRR).
 Data on past hazard patterns is often spatially and temporally uneven hindering analysis and
predictions. Also, Climate Change is making the past data less of a guide.
 Corruption and unlawful activities in construction sector overrule the planning regulations and
approval systems.
Ways to mainstream DRI in development paradigm:
 To ensure optimal resilience in new infrastructure, standards for design and risk management
practices have to keep pace with the evolving understanding of natural hazards, as well as
advancements in engineering technologies.
 National frameworks for design and construction standards need to be strengthened through better
regulation, state-of-the-art technology and innovation.
 Assessing disaster risk to infrastructure requires good, time-series data on past hazards patterns
(e.g. wind speeds, high flood levels) and capability to analyse this data to generate probabilistic risk
assessments that can guide investment in disaster resilient infrastructure.
 Reconstruction and recovery in infrastructure sectors must follow the “Build Back Better” principle
not only for the structural design of the infrastructure but also in terms of management systems
around it.
 Developing disaster risk financing strategies at the national, sub-national and local levels. These
could include budget reserve funds as well as disaster risk transfer instruments like catastrophic
bonds.
India maintains that a ‘disaster resilient world’ requires a ‘disaster resilient infrastructure’ and therefore
is playing a pivotal role in establishing a Coalition for Disaster Resilient Infrastructure (CDRI) as a
knowledge exchange and capacity development partnership.

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18. Highlighting the significance of data localization for India, discuss various challenges associated with
data localization. (250 words) 15
Approach:
 Introduce by explaining the concept of data localization in brief.
 Highlight its significance for India.
 Discuss the various challenges associated with data localization.
 Conclude on the basis of the above points.
Answer:
Data localization is the act of storing data on any device that is physically present within the borders of a
specific country where the data was generated. In case of India, most of these data are stored, in a
cloud, outside India. So, in 2018 RBI, following the recommendations of B.N. Srikrishna committee,
advised all the system providers to ensure that the data relating to payment systems operated by them
be stored in India.
Significance of data localization for India:
 Digital data in India was around 40,000 petabytes in 2010; it is likely to shoot up to 2.3 million
petabytes by 2020 — twice as fast as the global rate. If India houses all this data, it will become the
second largest investor in the data centre market and the fifth largest data centre market by 2050.
 “Data is the new oil” provides a backbone to much of the localisation drive. In the home of the
largest open Internet market in the world, national wealth creation relies on in-house data storage.
 On-shoring global data may champion the cause of domestic innovation, and ability to harness
India’s digital economy by creating domestic jobs and skills in data storage and analytics.
 Global companies will become more accountable in India. The Indian government is of the view that
if data is stored outside the sovereign boundaries of the country, its ability to monitor and regulate
online activity is curtailed as the agencies need to rely on mutual legal assistance treaties (MLATs) to
obtain access, delaying investigations.
 It will ensure national security by providing ease of investigation to India’s law enforcement
agencies as the incidences of data breaches and frauds are increasing.
 It will also minimize conflict of jurisdiction due to cross border data sharing.
Challenges associated with data localization:
 Ease of doing business and Investment: Global players will have to increase their investments in
India, both on infrastructure and on timely execution.
 Protectionism and conflict: Data localisation may be perceived as a protectionist policy which may
result into a fractured internet (splinternet) and increased conflict over data sharing.
 Affect domestic IT industry: A fractured internet will affect the cost and speed of information flows.
It may backfire on India’s own young startups and companies that process foreign data in India, such
as Tata Consulting Services and Wipro.
 Misuse of Data: Critics not only caution against state misuse and surveillance of personal data, but
also argue that security and government access is not achieved by localization. Even if the data is
stored in the country, the encryption keys may still remain out of the reach of national agencies.
 Ensuring cyber security: Businesses in India are more at risk to cyber security attacks. This can put
data of citizens in danger.
 Affects flexibility: Cloud computing softwares have taken advantage of the economies of scale and
an infrastructural architecture across the world. Thus, when there is a threat presumed in one part
of the world, the algorithm would move the data to another location or even in multiple locations.
However, this flexibility may be hampered due to data localization.

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 India’s position on data localisation must ultimately be weighed against the government’s aspirations to
create a ‘Digital India’ and the need for strategic thinking on whether a closed data economy or an open
one would be more conducive to meeting those goals.

19. Money Laundering as a socio economic offence is a menace especially for developing countries like
India. Comment. What measures have been taken at the domestic and international levels to deal
with this menace? (250 words) 15
Approach:
 Briefly introduce by explaining what is money laundering.
 Discuss how it is a socio-economic menace especially for developing countries like India.
 Enumerate the measures at the national level as well as the global level to deal with money
laundering.
 Give brief conclusion.
Answer:
Money Laundering is the method by which criminals disguise the illegal origins of their wealth and
protect their asset bases, so as to avoid the suspicion of law enforcement agencies and prevent leaving a
trail of incriminating evidence. It is done through various measures such as misinvoicing of trade, using
tax havens, shell companies etc. According to estimates by an IMF study, the quantum of money
laundered is approximately 2-5 % of global GDP.
Money laundering as a socio-economic offence:
 Weakens social fabric: Money laundering gives impetus to criminal activities, like smuggling,
corruption, drug trafficking, tax evasion, insider trading etc. and leads to deterioration of collective
ethical standards, threatening the peace and prosperity of the society.
 Undermines democracy and rule of law: It transfers purchasing power and market dominance in the
hands of the criminal elements which can acquire control of large sectors of the economy through
investment, or offer bribes to public officials and governments.
 Undermines welfarism: Laundering for reasons such as tax evasion leads to diversion of the
resources, which could have been used by the government to further the implementation of welfare
schemes for citizens.
 Affects economy and its development: It undermines the integrity of the financial markets of the
nation and the associated criminal activities leads to loss of revenue, economic distortion and
instability in the market. The perception of increased risk also keeps investors at distance.
It is a menace especially for developing countries like India as:
 Developing countries are more exposed and vulnerable to exploits of money laundering due to lax
regulatory and legal environment, lack of transparency, weak corporate governance and vulnerable
financial systems along with persistent civil and political unrest - a common feature of developing
countries.
 Social evil of poverty also makes the population susceptible to laundering activities.
 Further, the government has an enhanced burden to ensure productivity for its impoverished by
diversion of precious resources. Illicit flows reduce the chances of success of these domestic
resource mobilization initiatives.
Since money laundering is not only a law enforcement problem but a serious national and international
security threat, various actions have been taken at both the levels.
At National level
 Legislative measures: Enactment of anti-money laundering laws like prevention of money
laundering Act 2002 (amended in 2012) to help financial institutions in protecting our economy as

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 well as acts such as Black Money Act, 2015, Benami Transactions Act, Foreign exchange
management Act etc.
 Establishment of various regulators and enforcement agencies such as Financial Intelligence Unit,
Directorate of Enforcement etc.
 Transparency norms: RBI has introduced stricter KYC norms and also made it applicable for mobile
wallets etc.
 International agreements: The Government of India has entered into Double Taxation Avoidance
Agreements (DTAAs), to enable exchange of information pertaining to money laundering as well as
Advanced Pricing Agreements to avoid tax evasion and generation of black money.
 Strict monitoring by SEBI: The Foreign Portfolio Investors (FPIs) which issue Participatory Notes need
to follow stricter norms of monthly reporting.
At Global level
 Blacklisting of countries by Financial Action Task Force, which it judges to be non-cooperative in the
global fight against money laundering and terrorist financing.
 Automatic Exchange of Financial Information by many countries as part of the OECD initiative.
 Base Erosion and Profit Shifting (BEPS) initiative, under which the countries have agreed to take
necessary measures, requiring their large MNCs to provide reporting on revenues, profits, losses,
sales, taxes paid etc.
 United Nations Convention against Illicit Trafficking in Drugs and Psychotropic Substances also
known as Vienna Convention requires States to establish money laundering as a criminal offence.
To combat the menace of money laundering, other measures such as introduction of plastic money,
sensitization of the masses about the nuances of the crime for early detection of the crime can be
undertaken to prevent its adverse effect on the socio-economic growth of the country.

20. The primary motive of terrorism differs from that of organised crime but there exists a symbiotic
relationship between the two. Discuss. (250 words) 15
Approach:
 Introduce by mentioning the primary aim of terrorism and organized crime.
 Highlight the areas of cooperation and collaboration between the two.
 Conclude by suggesting some way forward to tackle this nexus.
Answer:
In absence of any universally defined definition, a terrorist group in general is a militant, usually non-
state organization with concrete political goals which uses tools of demonstrative violence to achieve
those goals.
While terrorism involves crimes committed with the objective of intimidating a population or compelling
a government or international organization with a view to achieving political or social objectives,
organized crime, on the other hand, seeks to obtain a financial or other material benefit, whereas power
and control can be secondary motives. Organized crime can involve violence and coercion, but the
objective in organized crime remains profit.
Despite the differences, they are bonded by common operational characteristics and often depend on
each other for crucial resources viz.:
Terrorist groups utilizing networks of organized crime
 Access to financial resources for terrorist attacks. For example, Taliban’s dependence on drug
trafficking.
 Independence from state sponsorship. For example, the main source of income for terrorist groups
in Pakistan, Central Asia, Africa and Latin America is smuggling and trading of narcotics especially

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 heroin. So even when State sponsorship is cut off, these terrorist organizations may sustain using the
network of organized crimes.
 Possibility of building up economic power, compensating for lack of public support. For example, ISIS
occupied vast areas in Iraq and Syria, controlling oil and gas reserves, banks, antiquities, and cultural
heritage as well as the capital of the people of these areas.
 Access to specialist skills (e.g. money laundering or forging travel documents). Fake passports and
forged I.D.s may be used to plan terrorist attacks in foreign states.
 Facilitation in cross-border movements (use of smuggling and human trafficking routes).
 Coming into contact with a wider range of potential recruits who are already outlaws.
 Access to arms and ammunition using the networks of illegal arms traffickers.
Organized criminal groups benefit from terrorist groups as:
 They utilize their military skills and obtain protection for illicit drug cultivation or trafficking in areas
under guerrilla/terrorist control.
 Terrorist destabilization of political and economic structures may create favorable environments for
organized crime activities.
 Alliance with terrorists might provide an extra degree of ‘intimidation’, leading, for instance, to
higher ransom payments for kidnapping victims.
 The difficulties for violent extremist offenders to re-enter the society, make them potential targets
for recruitment to the organized crime groups.
A multi-dimensional approach is required to tackle this nexus which must include adequate training and
use of data analytics and artificial intelligence monitoring tools to monitor socially harmful
developments. Further, soft power approaches like community policing and situational crime prevention
are important in intercepting in a pro-active way those individuals who may join violent organisations -
whether criminal, terrorist or hybrid.

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