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APPROACH – ANSWER: G. S. MAINS MOCK TEST - 1816 (2022)

Answer all the questions in NOT MORE THAN 200 WORDS each. Content of the answers is more
important than its length. All questions carry equal marks. 12.5X20=250
1. Highlighting benefits of hybrid renewable energy parks, discuss the associated concerns.
Approach:
• Start with a brief introduction on hybrid renewable energy and mention the benefits of hybrid
renewable energy parks.
• Discuss concerns associated with hybrid renewable energy parks.
• Conclude appropriately.
Answer:
Hybrid renewable energy comprises two or more renewable energy sources combined in such
a way to provide an efficient system with appropriate energy conversion technology connected
together to feed power to local load or grid. There are different types of hybrid renewable energy
systems like Biomass-wind-fuel cell, Photovoltaic-wind, Hydro-wind and Photovoltaic
Biomass etc. The Union Government recently proposed a scheme for setting up of “Wind Parks/
Wind-Solar Hybrid Parks”.
Benefits of hybrid renewable energy parks
• Enhanced and flatter power output: Hybrid parks make power generation profile flatter over
time compared to a pure wind or solar installation, thus eliminating rapid voltage and power
fluctuations in the electrical grid, making power dispatch more schedulable.
• Optimize use of the network: The
number of connectable instruments
is limited, which helps in maximising
the use of the existing
network/instruments.
• Continuous power supply: The
hybrid systems provide power
continuously due to integration of
multiple renewable sources like
solar, wind, hydro etc.
• Efficient use of land: Due to
common use of land for different
energy resources in hybrid energy
parks, there is an improvement in
land use efficiency.
• Lower consumer price of power:
Reduced running and transmission
cost in hybrid renewable energy
parks will reduce the cost of power.
• Reduced losses: They are beneficial in terms of reduced line and transformer losses, increased
system reliability, improved power quality and increased overall efficiency.

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 Concerns with hybrid renewable energy parks
• High installation cost: Initial investment for the installation of hybrid renewable energy
systems is high as compared to installation of pure wind or solar systems.
• Grid security and stability: These systems can be connected to a utility grid where frequency
mismatch often arises between the two systems, leading to instability of the overall system.
• Environmental impact: There are concerns about the impact of renewable energy parks on
ecology and wildlife in the region.
• Resource location: Hybrid renewable energy plants require large space, hence availability and
acquisition of such a large scale of land delays the development of hybrid parks.
• Weather conditions: Since energy generation from the park is dependent on associated local
weather, if favourable weather is not available then operating capacity of the park becomes
inefficient and unfeasible.
Renewable Energy Hybrids can prove very useful, as they are the solution to a reliable, affordable
and dispatchable integration of renewable energies. However, to get full benefits out of them, the
government should lend more financial support, resolve intermittency issues and encourage
adoption of advanced technologies.

2. Despite the role played by it, Minimum Support Price has resulted in certain unintended
consequences for agricultural policy in India. Discuss.
Approach:
• Briefly introduce Minimum Support Price policy.
• Write down the objectives of Minimum Support Policy.
• Discuss concerns associated with Minimum Support policy.
• Conclude accordingly.
Answer:
Minimum Support Price (MSP) is a form of market intervention by the Government of India to
ensure agricultural producers against any sharp fall in farm prices. The Government of India
engages in large-scale procurement of food grains at the MSP to fulfill the following objectives:
• Assuring a remunerative and relatively stable price environment for the farmers by
inducing them to increase production and ensure food security.
• Evolving a production pattern, which is in line with overall needs of the economy.
• Incentivizing the cultivators to improve farm inputs and productivity.
• To ensure accessibility of foodgrains at affordable rates to underprivileged sections.
However, the MSP has had a detrimental impact on agricultural policy in India, leading to certain
unintended consequences:
• High food subsidy: MSP has been hiked continuously due to politicization of the issues and
lobbying by the middlemen and the rich farmers. It has pushed the food subsidy bill to a very
high level.
• Bias in favour of surplus states: 95% procurement of wheat is from Punjab, Haryana and
Western UP while 90% of rice procurement is from Punjab, Andhra Pradesh, Haryana, UP and
Tamil Nadu. Other states do not get much benefit from it.
• Adverse impact on investment: It has been observed that a 10% increase in MSP of wheat and
rice leads to a decline in investment by 1.9% and in overall GDP by 0.33%.
• Distortion in cropping pattern: MSP of wheat and rice has generally been higher than the cost
of production and that of cereals and pulses has been less than the cost of production.
Therefore, farmers get incentivised for growing profitable crops leading to distortion of
cropping patterns.
• Environmental cost: Due to distorted cropping patterns, water intensive crops are grown in
arid and semi-arid areas using excess extraction of groundwater leading to groundwater
depletion.

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 • Bias in favour of large farmers: In each state, the average income transfer to large farmers is
approximately ten or more times greater than those received by marginal farmers.
• Impact on rural poor: Rise in price of cereals (due to higher MSP) leads to significant burden of
high cost for the buyers.
To address the above-mentioned concerns, MSP should be supplemented with variable import and
export tariffs for effective price stabilization. There should be a stable and predictable policy
regarding open market sales. Further, MSP is the creation of the scarcity era of the mid 1960s
whereas, now we have to deal with surplus production. We need to allow a greater role of markets
and let food grains procurement be demand-driven.

3. Explaining the hybrid annuity model of investment, discuss its advantages over other models of
infrastructure investment in India.
Approach:
• Give a brief concept of the hybrid annuity model (HAM).
• Then discuss its advantages over other models of infrastructure investment in India.
• Conclude accordingly.
Answer:
Hybrid Annuity Model, the new hybrid model, is a mix of the EPC (engineering, procurement
and construction) and the BOT (build, operate, transfer) models. This model presents a healthy
mix of the existing models, taking their positives and seems to be the solution for fast track
execution of projects amidst pessimistic business sentiments.
This model provides for assured return and also the government shoulders the responsibility
of revenue collection. Further, the government pays 40 per cent of the project cost to the
concessionaire during the construction phase in five equal installments of 8 percent each and also
the government provides for 90 percent of land and the related environment and forest clearance.
Additionally, there are various advantages of this model over other models of infrastructure
investments, like EPC and BOT. They include:
• Better Resource Management: In this model, one need not bring 100 percent of finance
upfront and since 40 per cent is available during the construction period, only 60 percent is
required to be arranged for the long term. Also, it gives a lot of flexibility to companies in terms
of resource management.
• Financial Flexibility: Further, 40 percent grant in form of capital support would substantially
reduce the debt portion and related interest. The lenders will have great comfort in financing
the project. Also, cost overruns are tackled due to provisions for inflation adjusted project costs.
• Faster project development: This model will help in resolving the challenges of delay or
stalling of projects as the obligation to acquire land and environment clearances lies with the
government.
• Better risk management: HAM provides for sensible risk and reward sharing unlike BOT
model where only private partners bear the construction and maintenance risks. In HAM, the
government also bears the risk.
• Project Monitoring: This model will provide for a better monitoring mechanism, as the
government will invest money in five equal installments based on the targets of completion of
road projects.
Under the existing BOT model, developers absorb most of the risks- financial; operations &
maintenance; and revenue. With the HAM, the idea is to provide a transparent, time-bound
mechanism to fast track decision-making and anticipate solutions to issues that could arise though a
built-in approach. However, HAM is still a new model and it requires more testing, improvement
and refinement before it goes big. Participation needs to be increased to start the positive feedback
loop.

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4. The privatization of airports in India, in its current phase, presents many opportunities but it is
also laden with various challenges. Discuss.
Approach:
• Giving a brief account of the recent privatization drive of airports in India, discuss the
opportunities it provides.
• State the various challenges in the context.
• Conclude accordingly.
Answer:
India is the 3rd largest and fastest growing domestic aviation market in the world with rapid airline
passenger growth often breaching capacity in multiple airports. This favors the privatization drive
of airports in India after more than a decade, when two airports i.e. Mumbai and Delhi airports were
privatized.
After leasing out the airports at Ahmedabad, Mangalore, Jaipur, Lucknow, Guwahati and
Thiruvananthapuram, the Airport Authority of India (AAI) has selected Bhubaneswar, Varanasi,
Amritsar, Raipur, Indore and Trichy airports for the second round. The Civil Aviation Ministry’s plan
is to privatize about 30-35 airports over the next five years.
This privatization drive of airports in India presents various opportunities:
• It will help in improving quality of service delivery and enhancing maintenance, which will
attract more revenue for the sector. This is quite evident from the model of Mumbai and Delhi
airports.
• The PPP model of privatization will help in maximizing the non-aeronautical revenues at
airports, which ultimately will bring down aeronautical tariffs for the passengers and will
increase the footfall at airports.
• AAI will be the biggest gainer, as it will receive significantly large funds from PPP airports as
revenue share. These funds can be utilized by AAI to provide air connectivity to far-flung
corners of the country where private investment may not be forthcoming due to low
profitability.
• It will help the government to fulfill the objectives of schemes like UDAN and to develop air
navigation infrastructure in the rest of the country.
• It gives an opportunity to liberate AAI’s resources, which are tied up with the loss-making
airports.
However, there are various challenges in this context:
• Even though the quality of service could improve, privatization may lead to higher prices, thus, a
road map needs to be developed in this regard.
• Private players will not be interested in smaller airports especially where traffic is low due to
less scope for revenue generation. Also, bundling up of loss-making airports with that in the
pipeline for privatization will discourage the private players from taking up the initiative.
• There are challenges in terms of balancing the workforce as privatization might lead to cutting
down the workforce.
• As things stand, the aviation industry-airlines and airports operators alike have been adversely
affected by the COVID-19 pandemic, thus, making it difficult for the companies to place high bids
for privatization like earlier.
The Government of India aims to make India a trans-shipment hub in the region. If the privatization
drive is executed properly, it can help in achieving the objective and will also augment India’s
trading capacity as a service provider and will emerge as a foreign exchange earner and enabler for
better connectivity in the region.

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5. Explaining the difference between physical capital and human capital, mention the challenges
faced in human capital formation in India.
Approach:
• Give a brief introduction.
• Mention the differences between physical capital and human capital.
• State the challenges faced in human capital formation in India.
• Conclude briefly with measures to address the above challenges.
Answer:
Capital is the lifeblood of an organisation, which allows it to maintain liquidity while growing
operations. Generally, the term capital is used to refer to physical assets in business. But today,
both physical capital and human capital are important and both forms of capital formation are
outcomes of conscious investment decisions.
Differences between physical capital and human capital:

S.N. Physical capital Human capital

1 It is tangible and can be easily sold in the It is intangible. It is endogenously built in the
market like any other commodity. body and mind of its owner and cannot be sold in
Example: Machineries, factories, etc. the market. Only the services of the human capital
are sold.

2 It is separable from its owner. It is inseparable from its owner.

3 It is completely mobile between countries It is not perfectly mobile between countries as

except for some artificial trade restrictions. movement is restricted by nationality and culture.

4 Physical capital formation can also be done Human capital formation is to be done through
through imports, technological up conscious policy formulations in consonance
gradation/transfer due to easy mobility with the nature of the society and economy and
between countries. expenditure by the state and individuals.

5 Continuous use of machines leads to In the case of human capital, depreciation takes
depreciation and change of technology place with ageing but can be reduced, to a large
makes a machine obsolete. extent, through continuous investment in
education, health, etc.

6 Physical capital creates only private Human capital creates both private and social
benefits. benefits.

India ranked 116 among 174 countries in the World Bank’s Human Capital Index 2020. Such
ranking indicates that there are multiple challenges towards human capital formation in India,
including:
• Inadequate government expenditure: India is the second-most populous country and as per
Census 2011, the country's decadal growth rate is 17.7%. But, public expenditure on health
(approximately. 1.3% of GDP) and education (approximately 4% of GDP) is very low. This
creates a huge burden on the existing facilities of human capital formation.
• Enduring process: The process of human development is very long because skill formation
takes time.
• Gender inequality: Because of cultural and social reasons, there has been less attention both
from the society and government towards human capital formation of women in India.
• Regional disparities: There are states like Kerala, which perform well on indices of human
development, at the same time, states like Bihar and Jharkhand fare badly on these indicators.
• Poor status of on-the-job-training: There is less emphasis on on-the-job training in the
industries, which hinders skill development.
• High Poverty: According to Census 2011, 21.9% of the population lives below the poverty line
and is not able to afford basic health and educational facilities.
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 Therefore, in order to ensure human capital formation, there is a need to increase public
expenditure on health and education and to take steps towards eliminating poverty. Further,
private sector and NGOs must be roped in for providing on-the-job-training and skill enhancement.
These will help in adequate human capital formation to reap the benefits of our demographic
dividend.

6. Discuss the idea of having a Universal Basic Income to achieve the goal of inclusive growth in
India.
Approach:
• Define Universal Basic Income (UBI) in the introduction.
• Discuss the role of Universal Basic Income in achieving the goal of inclusive growth.
• State the challenges in implementation of UBI.
• Conclude accordingly
Answer:
The Economic Survey of India (2016-17) advocated the concept of Universal Basic Income
(UBI) as an alternative to the various social welfare schemes. It has three key characteristics: every
citizen receives cash payments, these payments are unconditional, and each individual is free to
spend these funds as he/she wishes. UBI is premised on the idea that a just society needs to
guarantee to each individual a minimum income, which provides the necessary material foundation
for a life with access to basic goods and a life of dignity.
UBI can be helpful in achieving the goal of inclusive growth in the following ways:
• Redistribution of wealth: According to Oxfam, the richest 1% of Indian population holds over
four times the wealth held by the poorest 70%. UBI will help in redistribution of wealth to some
extent and in reducing the income inequality.
• Inclusion of people living below the poverty line: According to Census 2011, around 21.9%
of the population lives below the poverty line. UBI will be helpful in providing the much- needed
support to this segment of population.
• Relief on rising unemployment: According to the Centre for Monitoring Indian Economy
(CMIE), the unemployment rate in India is around 9.1% (in December 2020). UBI can guarantee
a minimum living standard to the unemployed people.
• Social inclusion: UBI can be used to target the vulnerable sections of the population like the
elderly, differently-abled people, women, destitute, etc.
• Enhance financial inclusion: Millions of bank accounts have been created under the Jan-Dhan
Yojana but many have no balance or are inactive. A regular monthly transfer can catalyse the
use of these accounts.
Apart from ensuring inclusive growth, UBI will create flexibility in the labour market. However,
there are multiple challenges towards the actual realisation of the idea of UBI in India.
• Moral hazard: A minimum guaranteed income might make people lazy and opt out of the
labour market. Also, the income can be used by people for intoxication and alcohol
consumption.
• Pressure on banking system: Given the current status of financial access among the poor, a
UBI may put too much stress on the banking system.
• Fiscal cost for the programme: Once introduced, it may become difficult for the government to
wind up a UBI scheme in case of failure.
• Issues with the universality of the scheme: Transfer to rich individuals might trump the idea
of equity and state welfare for the poor.
• Exposure to market risks (cash vs. food): Unlike food subsidies that are not subject to
fluctuating market prices, a cash transfer’s purchasing power may severely be curtailed by
market fluctuations.
In spite of various challenges, implementing UBI in India is desirable due to high inequality and
weaknesses in existing welfare schemes (misallocation, exclusions and leakages). Moreover, UBI
stands a greater chance in a developing country like India, where it can be pegged at relatively low
levels of income but can still yield immense welfare gains.
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7. Explaining the concept of backward and forward linkages, discuss its significance in the food
processing industry.
Approach:
• Briefly, introduce and explain the concept of backward and forward linkages.
• Discuss its significance in the food processing industry.
• Conclude answer.
Answer:
The creation of backward and forward linkages is aimed to provide effective backward and forward
integration for industry by plugging the gaps in the supply chain in terms of availability of raw
material and linkages with the market.
These linkages measure the capability of an industry to generate demand for the products of/in the
other industries. In context of food processing, linkages are of two types:
• Backward Linkage: Such linkages are meant to connect the food processing industries with
the sources of raw material. For example, Ketchup manufacturers are connected with the
farmers, farmer producer organisation, self-help groups producing tomatoes. It is aimed to
provide an uninterrupted supply of raw material to manufacturers.
• Forward Linkage: Similarly, forward linkages are meant to establish connection of food
processing industries with the markets through distribution networks consisting of
physical infrastructure like storages, road and rail network etc. It is established to enable
manufacturers to sell their processed food by developing linkages with wholesalers, retailers,
exporters etc.
The integration of backward and forward linkages is extremely significant for the success of food
processing industry as discussed below:
• Availability of good quality agri-produce: Connecting farmers with agri-processing industries
encourages and enables them to grow products of appropriate quality. Otherwise, industries
would face difficulty in procuring the desired agri-produce.
• Remunerative farming: It provides a larger market to farm produce therefore helps the
farmers fetch appropriate and remunerative return for their produce especially the marginal
and medium farmers.
• Reduction in food wastage: Establishment of direct contact with processors would help in
reducing the food wastage especially of perishable products with low shelf life like fruits,
vegetables, dairy products etc.
• Timely delivery: Creation of elaborate distribution networks ensures timely delivery of food
products to the consumer markets.
• Creation of infrastructure: Backward and forward integration ensures creation of better
infrastructure resulting in cost saving and enhanced efficiency.
• Making agriculture competitive: By connecting all the stakeholders with the agri-processing
industry, it provides a level playing field for all stakeholders and aids in facing competition.
• Improvement in standards: Moreover, it also helps in improving hygiene and food safety
standards leading to greater acceptability of processed food domestically and in the
international market.
India’s food processing sector is one of the largest in the world and its output is expected to reach
$535 Bn by 2025-26. Food processing has an important role to play in linking Indian farmers to
consumers in the domestic and international markets. Therefore, to reach its full potential, the
government has launched Mega food Parks, integrated cold chain projects, Scheme for Creation of
Backward and Forward Linkages’ under Pradhan Mantri Kisan Sampada Yojana. It has also
launched the Production Linked Incentive Scheme for Food Processing Industries (PLIFPI)
and Pradhan Mantri Formalization of Micro Food Processing Enterprises (PMFME).

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8. Explaining how unemployment is measured in India, give an account of the major types of
unemployment witnessed in India.
Approach:
• Define unemployment.
• Explain the way unemployment is measured in India.
• Bring out the major types of unemployment witnessed in India.
• Conclude answer.
Answer:
Unemployment is defined as a situation in which a person who is willing to/available for work
and actively looking for a job under the prevailing condition of work and remunerations is
unable to find work because of lack of work opportunities. The level of unemployment in the
country indicates the underutilization of labour supply in the economy.
In India, NSSO, an organization under the Ministry of Statistics and Programme Implementation
(MoSPI) measures unemployment on three approaches and defines employment and
unemployment on the activity statuses of an individual. These approaches are as follows:
• Daily Status Approach: In this approach, unemployment status of a person is measured for
each day in a reference week. A person is considered as unemployed for a day if he is not
provided work even for an hour in a day in reference week.
• Weekly Status Approach: This approach considers a person unemployed if he did not have
gainful work or were unemployed even for an hour on any day of the week preceding the
date of the survey.
• Usual Status Approach: According to this measure, those who were unemployed or had no
gainful work for a major time during the 365 days are considered as unemployed.
Major types of unemployment witnessed in India:
• Cyclical unemployment: Cyclical or demand deficient unemployment occurs when there is
an economy wide decline in aggregate demand for goods and services, employment declines
and correspondingly unemployment increases. For instance, during the global slowdown in late
2008, many employees had to lose their jobs in India.
• Seasonal unemployment: It occurs in a particular time of the year or season when people
are unemployed due to lower demand than usual. It is most common in industries like
agriculture, tourism, hotel, catering etc.
• Disguised unemployment: It occurs when a person doesn’t contribute anything to the
output even when he is visibly working. Mostly, this happens amongst family labour in
agriculture who are engaged on the land but not contributing to the given level of output. Thus,
marginal productivity remains zero.
• Frictional unemployment: It occurs when a person is out of one job and is searching for
another for different reasons such as seeking a better job, being fired from a current job, or
having voluntarily quit a current job. It generally requires some time before a person can get the
next job. During this time, s/he is frictionally unemployed.
• Structural unemployment: It arises when the qualification of a person is not sufficient to
meet his job responsibilities. It arises due to long term change in the pattern of demand that
changes the basic structure of the economy. The person is not able to learn new technologies
used in the new expanding economic sectors and they thus may be rendered permanently
unemployed.
An ILO report says that India’s unemployment rate has sharply risen to 7.11% in 2020 from
5.27% in 2019 and is at its worst in the last three decades. To improve the current scenario, India
needs to support its MSMEs; focus on skilling people; and bring policies towards controlling rural
and urban unemployment.

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9. What do you understand by 'Ease of Doing Business'? Discuss its significance in promoting
economic growth for a developing country like India?
Approach:
• Explain ‘Ease of doing Business’ briefly in the introduction.
• Discuss its significance in promoting economic growth for a developing country like India.
• End with a brief conclusion.
Answer:
'Ease of Doing Business' (EODB) refers to the regulatory environment in a country to set up and
operate a business. The World Bank ranks countries on the basis of EODB to indicate how
conducive a country is, for the growth of business. Countries are judged on 12 different
parameters, which include starting a business; getting construction permits, electricity, credit;
enforcing contracts; resolving insolvency; trading across borders, etc.
India has jumped from 142nd in 2014 to 63rd position in 2020 mainly due to its efforts in reducing
delays in construction permits and ease in getting electricity.
Significance of ease of doing business in promoting growth in India:
• Formalisation of the economy: India’s 63 million enterprises translate into only a million
formal employers. More than 98% of Indian employers stay dwarf with no access to
institutional capital, talent, technology, and supply chains because of India’s complex regulatory
environment, which levies a ‘formalisation’ tax on employers.
o Ease of doing business will help ease regulatory compliance and thereby in increased
formalization, which will lead to better productivity, better policy translation, better
revenues as well as better quality control.
• Creating a holistic corporate profile: Indian enterprises deal with multiple identities (PF,
ESIC, PAN, CIN, TAN etc.) issued by different central and state departments. There is often no
single source of truth to build a corporate profile.
o Ease in doing business would push towards creating a unique enterprise number through
which a holistic corporate profile for governance, credit, risk and compliance. This will
enable creation of a profile of credit and risk along with an e-document vault that will
reduce document forgery and fraud, leading to deeper credit penetration and reduce
NPAs.
• Strengthening grievance Redressal mechanism: It takes 1,445 days to dispose of a
commercial case as against 120 days in Singapore.
o Efforts towards EoDB would help strengthen commercial courts infrastructure and
expedite capacity building in hubs of economic activity in the country for faster disposal of
cases which would in turn spur economic activity owing to less diversion of resources
into legal battles.
• Improved digital infrastructure: An MSME deals with at least 400 compliances annually on an
on-going basis. With over 3,000 yearly regulatory changes that affect enterprises, India needs a
centralised repository of all updates. Moreover, the current inspection system is manual, paper-
based and requires physical contact.
o EoDB would enable faster digitization, which will in turn enhance transparency,
accountability, and timeliness in issuing different licenses, registrations, and approvals,
reducing delays and opportunities of corruption. It would also help in replacing the
current inspection system with a consolidated, risk-based and digital system with built-in
self-certification and third-party inspections.
Ease of doing business is an important springboard to structural reforms that encourage broad-
based growth. It also acts as a signal to foreign investors on the business environment in India.
Though India has improved upon EoDB in the last few years, it still needs to work towards
smoothening the process of starting business in India, getting properties registered and making the
country tax-payer friendly.

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10. Rapid adoption of agri-tech presents an important solution towards addressing the issues and
inefficiencies plaguing the agriculture sector in India. Analyse.
Approach:
• Write a short introduction around agri-tech.
• Discuss how rapid adoption of agri-tech presents an important solution towards addressing the
issues and inefficiencies plaguing the agriculture sector in India.
• Discuss how certain challenges would still remain in order for agri-tech to be successful.
• Give a brief conclusion.
Answer:
Agri-tech involves tools that improve yield, efficiency and profitability by leveraging
technological solutions in agricultural processes such as GIS systems, sensors, Internet of things,
data analytics, artificial intelligence, machine learning, drones etc.
Agriculture sector in India is plagued by numerous inefficiencies owing to fragmentation of land,
large number of intermediaries across the value chain, challenges in access to credit and technology,
limited sales channels, lack of digital infrastructure etc. Rapid adoption of agri-tech presents an
important solution towards addressing these issues and inefficiencies in the following ways:
• Minimising the impact of the ‘unknowns’ of agriculture using predictive technologies to
detect erratic weather, sensors to map the specific type of climate and soil in an area, and
machine learning algorithms that determine the appropriate crops based on this data, can
substantially improve the quality and quantity of yield.
o Components for farming technologies such as greenhouse systems, indoor/ outdoor
farming, aquaponics, etc. can be integrated in farm infrastructure to reduce impact of
seasonality and inconsistencies in inputs and produce.
• Better returns for farmers through higher transparency and online platforms for price
discovery for inputs and outputs, thereby improving market linkages.
• Quality management by engaging imaging or AI for crop quality monitoring and improvement
as well as automation in output grading and yield classification.
• Help overcome labour shortage through farm mechanization and automation using
machinery, tools and robots in seeding, material handling, harvesting, livestock/aqua rearing.
• Reduce capital expenditure for farm equipment by renting out or providing farm equipment
on a pay-per-use model thereby increasing utilization and reducing idle time for equipment.
However, agritech in India is still in its infancy stages with just 1% penetration of the addressable
market potential. According to consultancy firm EY agri-tech start-ups are operating in an attractive
market with an estimated potential of US$24b by 2025. This opportunity should be built upon.
Increased investment activity in the last few years has helped accelerate growth in the sector.
However, for the Indian agri-tech market to reach its potential, various issues would still need to be
addressed:
• There is a strong need to develop training programmes educating farmers about the benefits
of adopting new technological advancements especially using smartphones. because of the
present marginal utilization of such services.
• There is a need for the government and academia to increase the number of agri-tech
focused incubators and grants to encourage more entrepreneurs to focus on this growing
sector.
o Better incentives should be provided to startups that are coming up with effective
postharvest management infrastructure such as storage, preservation, cold chain and
refrigerated transportation.
• Banks and financial organisations also need to offer more suitable models of financing for
farmers, entrepreneurs, incubators, and accelerators.
• Startups need to emphasize more on small and marginal farmer vis-à-vis their present
focus group since they form the majority in Indian agriculture.
• Segments such as precision agriculture and farm management are significantly under-
funded in India. Global investors with demonstrated experience must address this challenge.

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 Unleashing the true potential of agri-tech in the country would involve developing a synergistic
relationship between the various stakeholders in the process including the farmers themselves;
enhancing investment and R&D to constantly improve and update solutions; and further improving
the regulatory environment to ease accessibility of startups and other companies to create a robust
ecosystem.

11. How can the dedicated freight corridors solve the freight problem for the railways? What are
the challenges associated with these projects?
Approach:
• Introduce by giving some background on freight movement in India.
• Highlight the significance of dedicated freight corridors in India.
• Mention the challenges associated with the projects.
• Conclude appropriately.
Answer:
The modal share of railways has declined considerably in both – passenger and freight
segments. For instance, the modal share of railways in freight transport for lead distance beyond
300 km has declined from 52% in fiscal 2008 to 32% in fiscal 2019.
In this context, dedicated freight corridors (DFCs) can contribute significantly. These are high-
speed and high-capacity railway corridors dedicated exclusively for freight movement and
built to affirm a higher throughput per train and a more significant share in the freight market.
Significance of dedicated freight corridors to solve the freight problem for the railways
• Carrying capacity: The enhanced carrying capacity because of doubling train length and
time reliability of transit on DFCs could provide a competitive edge to the railways over other
transport modes.
• Advanced protection: DFCs with modern signaling and telecommunications technologies
such as the Train Protection and Warning System (TPWS), Train Management System (TMS),
and Global System for Mobile Communications (GSM-R) with automatic signaling at 2 km space
distance will ensure an improved safety and protection system for train operations.
• Reduced Costs: To enable long-haul smooth operations, DFCs will adopt an advanced electric
traction system, which will result in lowering energy costs. It is estimated that electric
traction is around 47% cheaper than diesel traction for goods traffic.
• Lower Transit Times: The DFC network shall have fewer stations, falling only at 30–40 km,
and thus, leading to shorter transit times for an overall freight journey.
• Higher Speeds: Additionally, the state-of-art infrastructure would enable freight trains to
move at speeds as high as 100 kmph.
One of the major benefits that the DFCs will provide the Indian Railways will be a reduction in
operating cost. The various challenges associated with these projects are:
• Cost: The Debt-Equity Ratio for the project has increased to 3:1 from the earlier range i.e. 2:1.
Therefore, funding and cost of procurement are challenges for this project.
• Differential Tech Standards: The project has adopted different technical standards for
WDFC and EDFC. This makes seamless movement of double stack trains from WDFC to EDFC
impossible.
• Loopholes in revenue model: Indian Railways being the sole customer of DFCCIL, all other
freight customers/qualified operators would be routed through Indian Railways, which would
be paying Track Access Charges (TAC) starting from 2020-21, whether it utilizes the path or not.
Consequently, there is no revenue risk for DFCCIL, which could have a bearing on their
service levels.
• Project Delays: As of December 2018, DFCCIL has acquired 98.5% of the required land. Though
only 1.5% remains (presumably due to difficulties in land acquisition), these have a higher
number of affected patches per kilometer. It can pose a problem in construction of the DFCs
and can further delay the timeline for completion of the project.
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 • Viability Issues: With an inclination towards using renewable resources in future, viability of
the EDFC could be a concern since the majority of the traffic was expected to be coal for
power plants in northern India from the coalfields in the east.
Therefore, DFCs are expected to change the country’s freight transportation landscape, and provide
the railways a competitive edge over other transportation modes. Addressing these challenges
further enable the Indian Railways to harness the full potential of the DFCs.

12. What are the issues faced by the fisheries sector in India? What steps have been taken by the
government in this regard?
Approach:
• Introduce by giving a brief background on the fisheries sector in India.
• Highlight the challenges faced by the sector.
• Mention the steps taken by the government to tackle these challenges.
• Conclude appropriately.
Answer:
Fisheries are an important source of food, nutrition, employment and income in India. India is the
second largest fish producing country through aquaculture in the world and accounts for 7.7
per cent of the global production. The fisheries sector contributes 1.24 per cent to the GVA and
7.28 per cent to the agricultural GVA in 2018-19. The country ranks 4th position in global export
of fish products. Further, the livelihood opportunities provided by this sector have been
instrumental in sustaining incomes of over 28 million people.
However, there are various issues faced by the fisheries sector:
• Limited scope for expansion due to overcapacities in territorial waters, weak regulation,
inefficient management and prevalence of traditional fishing practices.
• Inadequate infrastructure especially fishing harbors, landing centers, cold chain and
distribution systems, poor processing and value addition, wastage, traceability and certification,
non-availability of skilled manpower, etc.
• In inland capture fisheries, seasonal nature of fishing operations, depleted stocks in natural
waters, issues related with tenure and lease rights, use of obsolete technology for
harvesting coupled with low capital infusion are some of the significant limiting factors.
• Disease, absence of species diversification and genetic improvement, poor brood and seed
are species-specific constraints.
• Other issues include high input cost, lack of access to institutional credit, credit guarantee
and insurance, environmental sustainability etc.
The government has taken various steps to tackle the challenges faced by this sector. These
include:
• Umbrella scheme of Blue Revolution (CSS-BR), which merged all schemes of the fisheries sector
was launched in 2015-16 for a 5-year period with a central financial outlay of Rs. 3000 crores to
catalyse the integrated, responsible and holistic development and management of the fisheries
sector.
• A dedicated Fisheries and Aquaculture Infrastructure Development Fund (FIDF) at Rs.
7522 crores was established.
• National Fisheries Development Board (NFDB) is created for development of inland
fisheries, aquaculture, marine fisheries including deep-sea fishing, mariculture.
• A total of 44,673 Kisan Credit Cards (KCCs) have been issued to fishers and fish farmers to
enable credit accessibility, which will help them in meeting their working capital needs.
• Pradhan Mantri Matsya Sampada Yojana (PMMSY) has been launched with an estimated
investment of Rs. 20,050 for a period of five years from FY 2020-21 to FY 2024-25.
○ The programme intends to increase aquaculture productivity to 5 tonnes per hectare (up
from national average of 3 tonnes per hectare), enhance domestic fish consumption and

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 attract investments in the fisheries sector from other sources. Insurance coverage for fishing
vessels is being introduced for the first time under PMMSY.
• Draft National Fisheries Policy (NFP) 2020 has been introduced that puts forward a
strategized way forward to develop, harness, manage and regulate capture and culture fisheries
in a responsible and sustainable manner.
Therefore, considering the importance of the sector not only for economic growth and employment
generation but also for achieving food and nutritional security, it is important that the steps taken
materialize on ground and the government should also come out with a comprehensive National
Fisheries Policy for holistic development of this allied sector.

13. Providing an account of the economic inequality in India, discuss its consequences.
Approach:
• Introduce by giving the context of economic inequality.
• Bring out the status of economic inequality in India.
• Write the consequences of Economic Inequality.
• Conclude by giving way forward.
Answer:
Economic inequality includes income inequality as well as wealth inequality. According to
Oxfam India, income inequality is the inequality in which there is disparity in the incomes
commanded by the top percentile of the population in comparison to the bottom percentiles, while
wealth inequality measures disparities in wealth instead of income.
Status of economic inequality in India:
• Income Inequality: According to the World Inequality Lab report 2020, income inequality is
substantially rising in India with the top 10% income share growing from 30% in the 1980s
to over 56% in 2019.
• Wealth Inequality: Wealth inequality in India is rising with the Gini wealth coefficient having
risen to 83.2% in 2019 from 81.2% in 2008.
○ As per an Oxfam report, India's richest 1% of the population holds 42.5% of national
wealth while the bottom 50% owns a mere 2.8%.
○ India’s top 10% of the population holds 74.3% of the total national wealth.
Consequences of Economic Inequality:
• Low social mobility and slower poverty reduction: Extreme inequality inhibits social
mobility and results in inequality in opportunities due to lack of proper education, training in
skills, lack of connections and assets.
• Social unrest, as high inequality is likely to undermine democracy, promote corruption and
cronyism. The gap between the rich and poor is helping to fuel authoritarianism.
• Inequality and the climate crisis are interwoven. Developing countries and poor communities
have less capacity than their richer counterparts to adapt to climate change and severe
weather events including access to new environmentally friendly technologies. Further,
inequality can also influence the balance of power among those arguing for and against curbing
carbon emissions.
• Income and wealth inequalities are often translated into political inequality and power
asymmetries among various groups (which may be defined by ethnicity, language, gender or
caste etc.) potentially leading to even more inequalities and even lead to breakdowns in
institutional functions, weakening the effectiveness of policies etc.
Way forward:
• Policy reorientation:
○ Progressive taxation, in order to redistribute resources across society.
○ Social spending on public services such as education, health and social protection.
Evidence from more than 150 countries shows that overall investment in public services
and social protection can tackle inequality.
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 • Free up women's time by easing the millions of unpaid hours they spend every day caring for
their families and homes. Invest in public services including water, electricity and childcare that
reduce the time needed to do this unpaid work.
• Low-productivity workers should be incentivized to move to sectors that are more productive.
Simultaneously, fundamental reforms like labor protections, institutional and policy support for
social safety nets need to be delivered to increase the productivity of these sectors.
Several initiatives have been taken up by the Government to eliminate inequality and foster
inclusive growth, such as: expanding the social security net through Pradhan Mantri Suraksha Bima
Yojana (Accident Insurance), providing institutional support for entrepreneurship with the help of
MUDRA Bank etc.

14. Highlight some key issues associated with inland waterways in India. Also, discuss how port led
development can positively impact India's economy.
Approach:
• Introduce with the status of inland waterways in India.
• Mention the key issues associated with inland waterways in India.
• Then discuss the positive impact of port-led development on Indian economy.
• Conclude accordingly.
Answer:
India has an extensive network of inland waterways in the form of rivers, canals, backwaters and
creeks. The National Waterways Act, 2016 has declared 111 inland waterways as ‘National
Waterways’ (NWs) in the country to promote inland shipping and navigation. The total length of
NWs is 20,275 kms spread across 24 States in the country.
However, freight transportation by waterways is highly underutilized in the country as compared to
developed countries. It is due to the following issues faced by the inland waterways:
• Technical Challenges:
o Inadequate depth: Large parts of Indian waterways have inadequate depth for commercial
movement of cargo. Moreover, most of the northern rivers in India face severe problems of
siltation and since the peninsular rivers are rain fed, their flow decreases during summer.
o Inadequate air draft: Multiple bridges with low vertical clearance obstruct the passage of
bigger transport vessels e.g., in Ganga and Yamuna canals.
• Legal and administrative issues: The inland waterways invariably run through more than one
state. However, there is non-uniformity in the model inland vessels rule and other operational
aspects throughout the country.
• Financial challenges:
○ Capital-intensive sector: Ship-building is highly capital intensive. It faces difficulties in
getting finance from banks and financial institutions. As compared to rails and roads, there
is under-investment in this sector from both the public and private side.
○ Capacity building: Inadequate trained manpower for development and management of
inland water transport infrastructure.
• Lack of modal integration: Multimodal corridors and a detailed mapping of waterways and
industrial clusters are missing.
Waterways are found to be cost effective as well as an environmentally friendly means of
transporting freight. In that context, a port-led development can impact Indian economy in the
following ways:
• Development of port infrastructure: It would enhance port connectivity, modernisation and
port-linked industrialisation.
• Easy movement of cargo: Linking major and non-major ports, industrial clusters and
evacuation infrastructure into a single system at a larger regional level will enable seamless and
efficient movement of cargo through gateways, thereby allowing ports to enhance
competitiveness and offer multiple freight options to customers.
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 • Decreasing Logistics Costs and enabler of ‘Make in India’: Successful execution of Sagarmala
and Bharatmala programmes has the potential to bring the logistics costs down to the global
average. It will boost export and import in the country
• Benefits to communities: With 42% of India’s population living in the coastal states, it can
make a positive impact on the lives of coastal communities. Also, port led development
programmes like Sagarmala will have a large impact on hinterland states as well. For example,
NW1 benefits the densely populated states of UP, Bihar, Jharkhand and West Bengal.
To exploit the full potential of water transport in India, a seamless integration of coastal shipping
and inland water transport is required. Therefore, such vessels need to be developed which can
operate in both the sectors economically. Also, the government should come up with a National
Water Transport Policy to streamline the waterways.

15. Enumerate some key initiatives taken by the government post 1991 for industrial development
in India.
Approach:
• Briefly introduce by describing the change in approach of India's economy post 1991 reforms.
• Mention key initiatives taken after 1991 and until now for industrial development.
• Conclude suitably.
Answer:
India changed its industrial policy radically in 1991. It redefined the concept of economic self-
reliance to mean the ability to pay for imports by foreign exchange earnings through exports and
not necessarily just depending upon the domestic industries. It also emphasized the need to develop
indigenous capabilities in technology and manufacturing.
To meet these two objectives, the post 1991 reforms included following key initiatives:
• Public Sector De-Reservation and Privatization through Dis-Investment. Since 1991, the
public sector policy consists of:
○ Reduction in the number of industries reserved for public sector: The Public Sector
Undertakings (PSUs) policy since 1991 has emphasized bringing down government equity
in all non-strategic PSUs to 26 percent or lower, restructuring or reviving potentially viable
PSUs and closing down PSUs, which cannot be revived.
○ Implementation of Memorandum of Understanding (MoU): More public sector units
have been brought under the purview of Memorandum of Understanding (MoU) system,
which is a performance contract between the Government and a specific public enterprise.
○ Referral to BIFR: Many sick public sector units have been referred to the erstwhile Board
for Industrial and Financial Reconstruction (BIFR) for rehabilitation or, where necessary,
for winding up.
○ Disinvestment and privatization: Disinvestment and privatization of existing PSUs has
been adopted to improve corporate efficiency, financial performance and competition.
○ Manpower rationalization: Voluntary Retirement Scheme (VRS) was introduced in a
number of PSUs to decrease the surplus manpower.
• Industrial Delicensing: Progressive liberalization and deregulation of the economy has
ensured the need for industrial licenses, regulated under the Industries (Development and
Regulation) Act 1951, in very few cases. With a few exceptions, investors are free to set up,
expand, change the location of an existing industrial enterprise and manufacture a new product
through an already established industrial enterprise.
• Amendment of Monopolies and Restrictive Trade Practices (MRTP) Act, 1969: The MRTP
Act has been replaced by the Competition Act, 2002, resulting in formation of Competition
Commission in 2003, which mainly controls the practices that have an adverse impact on
competition.
• Liberalized Foreign Investment Policy: Post 1991, radical reforms were introduced to attract
foreign investment such as FERA, 1973 was repealed and FEMA came into force in 2000. A
foreign investor could freely enter, invest and operate industrial enterprises in India. The FDI
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 has been allowed in all sectors including the services sector except atomic energy and railway
transport. The Foreign Contribution (Regulation) Act, 2010 has been enacted to consolidate the
law to regulate the acceptance and utilization of foreign contributions.
• Foreign Technology Agreement: Indian companies are free to negotiate the terms of
technology transfer with their foreign counterparts according to their own commercial
judgment.
• Dilution of protection to Small Scale Industries (SSIs) and emphasis on competitiveness:
The number of items reserved exclusively for SSIs, as well as their products reserved to be
purchased by the government has been gradually brought down. Further, measures have been
adopted to improve technology and export capabilities of SSIs. Thus, the overall orientation of
SSIs has been shifted from protection towards competitiveness.
There is substantial evidence to suggest that the Indian industry has been restructuring and
reducing costs in a slow but steady manner since the mid-1990s. The pace of adjustment and
adaptation has been slow in some of the important traditional industries, for example, textiles and
garments but other industries such as IT, pharmaceuticals, automotive components etc. have
successfully turned around and penetrated the global market.

16. Enumerate the constraints faced by the power sector in India. Also, suggest measures to
address them.
Approach:
• Introduce by briefly giving an overview of the power sector in India.
• State the constraints faced by the power sector.
• Discuss measures to address such constraints.
• Conclude appropriately.
Answer:
India is the world’s third largest producer and consumer of electricity. The national electric grid has
an installed capacity of approximately 383.37 GW as of May 2021. India’s rapidly increasing
population and its ongoing developmental projects is expected to increase the demand for power
substantially in the foreseeable future.
However, despite its significance, there are numerous constraints faced by the power sector
in India, including:
• Heavy dependence on fossil fuels: India’s power sector is dominated by coal, which produces
about three-fourths of all electricity and is expected to remain India’s main energy source at
least for the next three decades.
• Infrastructural issues: Old inefficient plants continue to operate whereas more efficient plants
are underutilized.
• Frequent load shedding: As the gap between the average cost of supply (ACS) and average
revenue realized (ARR) persists due to high aggregate technical and commercial (AT&C) losses,
distribution companies (discoms) use load shedding to minimize losses.
• Inadequate regulation: The independent Regulatory Commissions are unable to fully regulate
discoms and fix rational tariffs.
• Inefficient use in the agricultural sector: Unmetered power supply to agriculture provides no
incentive to farmers to use electricity efficiently.
• Lack of investment: The non-availability of sufficient credit facilities and difficulties in
obtaining required finances for energy saving projects are strong deterrents to investments in
energy efficiency in India.
• Lack of competition: High industrial/commercial tariff and the cross-subsidy regime have
affected the competitiveness of the industrial and commercial sectors.
Remedial measures in this context include:
• Regulatory bodies need to be further strengthened and made truly independent. Also, they
need to be sensitized to the challenges faced by the sector and policy framework needs to be
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 crafted and enforced to ensure a win-win situation for all the stakeholders. They must pro-
actively intervene to resolve the immediate issues ailing the power sector.
• Promotion of smart grid and smart meters including 100 per cent metering of electricity
supplied to the agricultural sector.
• All Power Purchasing Agreements (PPAs) including those with state generation companies
should be based on competitive bidding.
• There should be promotion of the use of solar pumps for agriculture. Further, local discoms
should buy surplus power from the farmers.
• Discoms should be fined for load shedding. Also, there should be effective enforcement of a
cap on cross-subsidy and open access in order to remove high open access charges.
• There should be active promotion of cross-border electricity trade to utilize existing/
upcoming generation assets.
• There should be adequate subsidies and schemes to promote the use of renewable energy.
• There is a strong need to push for wider-scale implementation of public private partnership
models for power generation. The private sector has been playing a key role in generating
power; a more supportive environment will help in bridging the energy deficit of the country.
To meet the needs of India's growing economy, providing reliable, affordable, secure, and
sustainable power requires exploring a range of options including maximising domestic production,
diversifying the fuel mix and the source of supply, and maintaining sufficient reserves.

17. Explain the significance of micro-irrigation in India’s agricultural system. Also, state the
challenges in its adoption in India.
Approach:
• Using examples, briefly explain what is understood by micro-irrigation.
• Discuss the significance of micro-irrigation in India.
• Mention the challenges in its widespread adoption in India.
• Conclude appropriately.
Answer:
India accommodates more than 17% of the world population and only 4% of world’s fresh water
resources, out of which around 80% is used in agriculture alone. This calls for efficient irrigation
technologies to increase water productivity. In this context, micro-irrigation techniques such as
drip irrigation, sprinkler, rain-gun, porous pipe system etc. where water is supplied directly to the
crops is considered as an innovative water saving technology.
Significance of micro-irrigation for India:
• Water use efficiency: It helps in significant reduction of water loss due to runoff, evaporation
etc. It further aids soil health management and prevents water logging. This is significant for
India where agriculture is largely rain-fed and faces vagaries of aberrant monsoons, soil
degradation, nutrient deficiencies and declining groundwater table.
• Energy efficiency: It can effectively save power due to less water use and thereby reduction in
energy requirements for pumping groundwater.
• Fertilizer use efficiency: Proper mixing of fertilizers and water, control of optimum dosage
and direct application of fertilizers to the root zone result in lower use of fertilizers. This is
important as non-judicious application of fertilizer is reducing soil fertility in many regions.
• Increase in productivity: It increases the crop yield including both quantity and quality.
Further, an increase in productivity would also support the goal of doubling farmers’ income.
• New crop introduction: An improved water scenario helps in addition of new crops and
promotes inter-cropping. Moreover, the reduction in spacing between the plants helps in
accommodating more plants.
• Infrastructure development: Infrastructure of micro-irrigation systems can be created in
months unlike other systems where it takes years to develop infrastructure such as dams,
canals, etc.

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 Thus, micro-irrigation has been emphasized in Pradhan Mantri Krishi Sinchayee Yojana
(PMKSY) with the aim of extending irrigation coverage ('Har khet ko pani') and improving water
use efficiency (‘per drop more crop'). However, despite promoting micro-irrigation through
various subsidies, its coverage is less than 15% of the potential. The following challenges exist in
its widespread adoption:
• High initial cost: The cost of initial setup is high which is not feasible for over 85% Indian
farmers who are small and marginal farmers.
• Energy crisis: Power outages, voltage fluctuations and unscheduled interruptions exist across
rural and urban India.
• Policy concerns:
○ There are delays in subsidy disbursement to farmers.
○ GST rate on parts used in drip irrigation and sprinkler systems is high i.e. 12%.
○ Widespread private investment is missing.
• Technical support: There is lack of technical support for maintenance (for example, rodent
attack on piping, pore-clogging) and operation.
• Declining landholdings and farm incomes: Data on India’s operational landholdings shows
that the average sizes of landholdings have halved since the 1960s. The declining size of
landholdings impacts farm incomes, which is closely associated with the capability of the farmer
to adopt expensive micro-irrigation systems.
In this context, many studies have suggested promotion of water footprints, virtual water trades
and formal water markets as alternatives for saving water, relaxation of farm size limitation in
providing micro-irrigation subsidies and creation of a single state-level agency or a special purpose
vehicle (SPV) for speedy implementation of the micro-irrigation programmes.

18. In view of the three decades of economic reforms in India, discuss its impact on the agriculture
sector in India.
Approach:
• Briefly discuss the economic reforms of 1991 in the introductory part.
• Highlight the negative and positive impact of the reforms on the agriculture sector.
• Conclude accordingly.
Answer:
Under the economic reforms of 1991, the government carried out a series of policies which were
categorized under the heads of liberalization, privatization and globalization. The initiatives
included deregulation of industrial market, financial sector reforms, tax reforms, removal of license
raj, disinvestments etc.
This marked a paradigm shift in the growth trajectory of the Indian economy. However, owing to
the lopsided nature of these reforms, they had a few fallouts for Indian agriculture including:
• Reduced agricultural share in GDP: Agriculture, which accounted for nearly 30 per cent of the
total GDP in 1991, now accounts for around 20 per cent of the economy.
• Lowered public investment: The share of public investment in gross capital formation dipped
to extremely low levels. Agricultural infrastructure; market linkages; and research and
extension received lesser investments compared to the era of Green Revolution.
• Raised cost of production: The rationalisation of agro-subsidies has led to increase in the cost
of production, which has severely affected the small and marginal farmers.
• Less availability of farm credit: Financial liberalisation measures and the incentives provided
to PSBs made financing the agricultural sector much less attractive, where transaction costs
were anyway high.
• Exposure to international competition: Because of export-oriented policy strategies in
agriculture, there has been a shift from production for the domestic market towards production
for the export market focusing on cash crops in lieu of production of food grains. This puts
pressure on prices of food grains.

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 Despite certain adverse effects of economic reforms on Indian agriculture, there has been some
positive impact as well:
• Availability of modern agro technology: New technologies have been incorporated post
reforms including modern implementations in irrigation projects, synthetic nitrogen fertilizer;
improved crop varieties developed through bio-technology; use of information technology etc.
• Increased employment opportunities: LPG reforms have created employment in various
sectors like packing, exporting, standardizing, processing, transportation and cold storage etc.
At least 40% of India’s workforce is still engaged in agriculture, even though this contributes
less than 15% of the total Gross Value Added (GVA).
• Structural transformation in economy: The proportion of the Indian labour force
employed in agriculture has come down sharply over the past three decades—from 62.56%
in 1991 to 42.39% in 2020. These have been absorbed by Industry (15.72% in 1991 to 25.57%
in 2020) and Service sector (21.72% in 1991 to 32.04% in 2019), which is a sign of structural
transformation in progress.
• Rise in the share in external trade: Due to the conditions of WTO, all the member countries
get the same opportunities, and there is an increase in the export of agricultural products from
India. Exports of agricultural products in India rose from 88.12 INR Billion in 1991 to 360.75
INR Billion in March 2021.
Hence, economic reforms have proved to be a double edged sword for Indian agriculture sector.
Several initiatives in recent times, namely – Farm Acts, Pradhan Mantri Fasal Bima Yojana, Mega
Food Parks etc. may help offset some negative consequences.

19. Highlight the growing focus on ‘green initiatives’ in the roadways sector in India.
Approach:
• Highlight the need for green initiatives in the roadways sector in India and its key elements.
• Explain growing focus on ‘green initiatives’ in the road sector using some schemes/policies, in
detail.
• Conclude briefly.
Answer:
In the transportation sector, roads contribute the majority of the carbon footprint. Large-scale
environmental degradation and climate change, combined with loss of natural resources and
increasing urbanisation and construction, has contributed to the growing need for green initiatives
in the roadways sector in India.
In this regard, interventions such as increasing the use of energy-efficient modes of transport,
stringent regulations for reducing carbon emission from vehicles, shifting from ad-hoc to proactive
highway maintenance, incentivising the shift to larger trucks and promoting the use of public
transport and low-carbon fuels are some ways to reduce the carbon footprint in roadways sector.
The Indian government has stepped up its focus on such ‘green initiatives’ in the following ways:
• Ministry of Road Transport and Highways (MoRTH) has mandated implementation of Bharat
Standards-VI (BS-VI) emission norms from 1st April 2020 for all vehicles in India.
• India has put in place all required regulations for the use of Flex-fuel like ethanol mixed with
petrol.
• The National Electric Mobility Mission Plan (NEMMP) 2020 aims to achieve national fuel
security by promoting hybrid and electric vehicles in the country. with an ambitious target to
achieve 6-7 million sales of hybrid and electric vehicles year on year from 2020 onwards.
• The National Green Highways Project was launched as part of the Green Highways
(Plantation, Transplantation, Beautification and Maintenance) Policy 2015. Under the
project, it is mandatory to set aside 1 percent of the total project cost of any National Highways
contract to a Green Fund corpus that will be used for plantation purposes. Afforestation is
expected to help in sequestering approximately 12 lakh mt carbon annually.
• National Green Highways Mission (NGHM) under which National Highways Authority of
India (NHAI) has been entrusted with the task of planning, implementation and monitoring
roadside plantations along one lakh km network of National Highways.
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 • The E-rickshaw policy of the Government has helped in reducing pollution to a great extent. E-
carts and E-rickshaws have been freed from permit requirements.
• Retro fitment of existing polluting vehicles into electric hybrid and electric vehicles has been
permitted.
• A voluntary Vehicle Fleet Modernization Programme to enable the replacement of old, heavy
and medium commercial vehicles is in the pipeline as they contribute the maximum to vehicular
pollution.
• MoRTH has issued notification for norms for the use of Bio-CNG for testing and exhaust
emission for vehicles running on it.
• MoRTH has recently issued guidelines for the use of recyclable materials such as waste
plastic and fly ash for road construction and renewal.
• There have also been budgetary provisions such as GST reduction on Electric Vehicles and tax
benefits for buying EV.
The green initiatives in this sector would help provide multiple benefits in the form of supporting a
green economy, improving quality of life, protecting biodiversity and enhancing the ability of
ecosystems to deliver services.

20. Explain the major impediments to growth of horticulture sector in India and suggest ways to
tap its huge potential.
Approach:
• Introduce by highlighting the potential of the horticulture sector in India.
• Explain the major constraints in its growth in India.
• Bring out ways to tap its huge potential and conclude appropriately
Answer:
Horticulture is the branch of agriculture that deals with cultivation, production and sale of fruits,
vegetables, flowers and ornamental plants. It has huge potential due to following factors:
• Fruits and vegetables give 4-10 times the return from other crop groups namely cereals,
pulses and oilseeds.
• Due to changes in taste, preferences, food habits and health consciousness, the consumption
pattern in India has been shifting towards fruits and vegetables. Further, India’s import of
fruits is rising by 20 percent per year, which suggests that demand side prospects for fruits
and vegetables are very bright.
• Other factors include increasing incomes especially of small and marginal farmers, adaptation
to diverse agro-climatic conditions, low demand for water, making horticulture a favourable
sector for coming years.
Despite this potential, the area under horticulture crops in the country has remained below 10 per
cent. The major constraints for the growth in horticultural crops are:
• There is no fixed Minimum Support Price for horticultural products and most horticulture
products come under the category of perishable items, making the sector vulnerable.
• Higher input cost than food crops such as rice and wheat is an inhibiting factor in growth of
horticulture crops in India.
• Horticultural crops, particularly vegetables, are more popular among marginal farmers with
smaller size land holdings. However, such farmers are severely constrained by the scale
factor in marketing of produce.
• Inadequate storage and processing facilities as in most cases a horticultural crop does not
come to maturity at the same time and the harvestable produce is distributed over a span of a
few weeks. Being perishable, these crops cannot be stored at home and if not sold, it results in
big post-harvest losses. Lack of cold storage facilities further exacerbates this problem.
• Other constraints include challenges with regard to horticulture export due to lack of
market intelligence include large price spread between producers and end users, frequent and
often violent price fluctuations, low level of processing, and very low post harvest value
addition.
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 The government has taken various initiatives like the Mission for Integrated Development of
Horticulture and the National Horticulture Board, which saw the production increase from 211
million tonnes in 2007-08 to 311 million tonnes in 2018-19. However, still more steps are required
to achieve the potential of this sector:
• Institutionalize cooperatives: It will help small growers to trade their produce in the market,
as combined harvest will be sufficient to trade in markets.
• Provide favorable market conditions: Taking horticulture produce out of the purview of
APMC Act will give freedom to producers and buyers for sale/purchase throughout the country
directly in the market or to pool with other producers for marketing.
• Development of modern value chain: There is a need for development of infrastructure in
terms of cold storage, faster transports, processing facilities etc. There is a requirement to
encourage private players to invest in development of these back-end linkages facilities.
• Safety net: Horticultural crops may be provided with safety nets such as those provided to food
grains using MSP.
India can emerge as a bigger producer and exporter of horticulture crops if sufficient emphasis is
given to resource allocation, infrastructure development, more R&D, technological up
gradation and better policy framework for this sector.

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