GS3 Weekly[2nd – 7th Mar 2015]

[The Undercover group](Insightsonindia.com)

Topic: Conservation, environmental pollution and degradation, environmental impactassessment

Q) It is said that India has a de facto Carbon Tax. Critically examine how this tax is imposed,what are its objectives and if these objectives have been met. (200 Words)

Business Standard

Ans- Carbon tax refers to levying of such taxes on the use of carbon emitting fossil fuelswhich discourages their usage by increasing their cost-price . The De-Facto Carbon Taxreferred in the Economic Survey are the high excise duties, clean energy cess being levied onpetroleum products like Petrol,Diesel and Coal Usage. The basic objectives behind levyingthe carbon tax are ,

1. Promoting cleaner sources of Energy by artificially inflating the price of fossil fuels toreduce consumption .2. Incentivises researchers to create more fuel efficient technologies.3. Assigning economic value to carbon –emissions will help in green accounting whereadverse effect on environment is factored into balance sheets and creates awarenessamongst public.

India’s “De-Facto” tax i.e it isn’t explicitly stated to be Carbon Tax instead collected as Exciseduties etc. Considering the same India has one of the highest Cabon Taxes ,$ 140 per tonneof CO2 for petrol , $64 per tonne CO2 for Diesel though we lag on the tax levy on Coal usage.

The objective of discouraging andrationalizing fossil fuels consumption has been onlypartially successful. The basic shortcomings are ,

1. Unavailability of viable green technology or cleaner source of Energy to substitute FossilFuels.2. Despite the Carbon-Tax fossil fuels remain cheaper than resources like-solar , wind energy3. Coal based Thermal Plants fuel India’s power requirement ( almost 60 % ) . Higher Cesscould lead to spurt in Inflation through high energy prices.

When alternatives like Metro Trains and other efficient public transport have developedCarbon Tax will be more effective otherwise long term environmental concerns be sacrificedfor short term gains and Carbon Tax ineffective.

Topic: Science and Technology (health issues)- developments and their applications andeffects in everyday life

Q) What do you understand by Big Data? Discuss some of its applications. (200 Words)

The Hindu

Ans- Big data is a catchphrase used to denote a set if data, both structures and unstructured,so large that it is not possible to analyse and process it by using conventional databasemanagement systems. Such a huge surge in data has occurred due to burgeoning number ofinformation capturing devices like mobiles, cameras, sensors, etc. and a less increase in ourstorage capacity despite the latter being digital now. The challenges associated with BigData arr storage, analysis, and processing, querying, management and information privacy.The use of such voluminous data can help us spot and understand new business trends,opinions, prevent diseases, combat crimes, etc. and governments and businessorganizations are increasingly becoming interested in more effective uses of big data.Consequently, the data management industry and analytics is growing immensely.Applications:1.Government: Big data can be analysed for targeted delivery if schemes, maintain record ofbeneficiaries, analyse the response of the electorate to policies, predict future trends anddemands of population.2. Businesses: Help to understand customers profile and needs, keep centralized data ofsales, maintain individual history of each customer and delivet customized services.3. Science and Technology: Research data can be captured at more depth and analysed in abetter way. For example data at Large Hadron Collider for atomic research. In future we aremoving to the Internet of Things which will be based on machine-to-machinecommunication and each machine will have several Gigabytes if data about itself and othersfor simulating processes.4. In social surveys also, now we can capture a larger sample of population for evaluatingtrends and undercurrents. For example a recent big data analysis has shown that Indiancuisines are mostly anchored around spices and have dissimilar ingredients paired.However, as data capturing devices flood the market, what us big data today might be verysmall tomorrow and this has been the trend so far.

Topic: Indian Economy – Financial Sector

Q) It is said that the most recent union budget has introduced a few excellent moves thatcould work towards ushering in a new era in the financial sector in India. Write a noteon them. (200 Words)

Business Standard

Ans- To meet the ambitious development targets, a vibrant financial sector is the need ofthe hour. Many welcome steps have been taken in this budget which gives genuine reasonfor cheer.

1) capital infusion to PSBs- around 8000 cr will be pumped into PSBs to meet BASEL 3 norms.Although this is inadequate considering NPA issues, more revenue is likely to be generatedthrough reducing government share.

2) SARFARESAI to NBFCs- given much importance to NBFCs to fund SMEs, it was prudent toincorporate them in this act for better debt recovery and reducing court disputes.

3) sector neutral financial redressal agency- a one stop consumer complain and grievanceredressal forum against all financial service providers. (recommended by FSLRC)

4) merging FMC with SEBI- SEBI with its experience and trustworthy track record, betterequipped to deal with malpractice and chaos prevailing in future commodity market.

5) revamping bankruptcy code- since existing legal provision are not adequate to deal withthis. A simplified law will bring legal cetainity, speed and keep away rogue borrowers.

6) MUDRA ( Micro Finance Development Refinance Agency) will strengthen financially themicro finance institutions and extend their reach.

7) an autonomous bank board bureau- for appointment of persons in high posts of PSBswithout any political interference.

Proper implementation of these will make room for further reforms and the ride to ourgreat developmental ambition will be smooth.

Topic: Indian Economy

Q) Recently the Reserve Bank of India (RBI) and the union government signed MonetaryPolicy Framework Agreement between them which is hailed as historic. Examine itshighlights and this pact’s importance to Indian economy. (200 Words)

The Indian Express

The Hindu

Ans- For past few years, India has been fighting against price rise at moneytary level, notwith much success. This time addressing few structural costraints partially in budget,government has strengthened its moneytary front by entering into a pact with RBI. Keyhighlights are:

• Reasserting that moneytary policy will be solely handled by RBI preempting long standingfriction between FM and RBI governor.

• Setting clear inflation target- by January 2016, CPI would be contained below 6% andfollowing years, it will vary between a 2% band. This will bring taming inflation to forefrontfor RBI giving secondary priority to interest rate cut, thus somehow resolving the growth-inflation dilemma.

• Accountability- criteria have been set that will determine when RBI missed the target. Insuch case it has to explain to government the causes and state remedial measures that willbe taken. It will publish a biyearly document explaining people the source of inflation.

• Its inflation forecast for next 6-8 months will give an officials estimate enabling many toform strategies accordingly.

• A monetary policy committee will bring in more objectivity avoiding the view of RBIgovernor alone.

Importance to Indian economy:

1) Huge relief to common men

2) Increase in expenditure by people boosting growth

3) Increase in saving rate making more capital available for investment.

4) No more gold rush- no more CAD deficit and unstable exchange regime

5) With better investment avenues no need to look only for real estate inflating it price tounacceptable level- a good sign for government’s housing for all by 2022 scheme. And yesless black money in this sector.

Such institutionalized measure to battle inflation has given more confidence butgovernment must do more to address the structural issues like supply chain constrains.

Topic: Land reforms in India. Effects of liberalization on the economy, changes in industrialpolicy and their effects on industrial growth.

Q) It is said that most industrial projects in India, which are either stalled or cancelled, is dueto land acquisition problem in India. Do you agree with this assessment? Critically examine.(200 Words)

Business Standard

Ans- For the last decade or two, land acquisition has been the biggest irritant for anydevelopmental or industrial projects. The intensity of problem is reflected from following:

- Arcerol Mittal and POSCO withdrew their multi billion dollar steel project last year

- Resistance by local people and tribals following government suppression has preventedland acquisition like niyamgiri hills of Odisha

- About 1300 PPP projects worth 7 lakh crore is pending and land is one of the reason forthis

In some places environmental concerns raised by environmentalists and civil society hasdissuaded people from giving away their land. Although there are other issues like delay inclearances, economic climate, high interest rate and NPA condition of banks which ispreventing players especially private ones to go ahead with investment.

But the issue with land is a problem of government’s own making, because:

a) Until recently land were taken forcefully with paltry or no compensation

b) No consent of broad consultation before taking land

c) No participation in decision making in rehabilitation plan or future development on theirland and fair benefit sharing

d) Government sitting on huge amount of unused barren land, fallow land and governmentland but not effectively using them.

Although land acquisition act of 2013 took adequate care of ‘affected people’, the resultinghigh cost and delay in acquisition send a negative signal to industry. Some innovative wayslike land bank, efficient use of barren and government land, leasing out land instead ofselling them would be the way forward without compromising the interest of affectedpeople.

Topic: Government Budgeting; indigenization of technology; Security challenges

Q) In the light of recent reports of government’s thrust on ‘Mane in India’ campaign andsome pressing problems being faced by the navy and army, critically comment on India’sdefence budget and its performance in recent years. (200 Words)

Business Standard

Ans- The government has allocated 144 crores for the make in india campaign for thecommunications and the battlefield integeration system, both of which wouldn't see thelight of the day this year for the lack of proper planning and foresight.

For years, the defence budget has been an exercise of tussle of egos in the defence minsitryrather than a focussed budget aiming to deliver performance where needed. Army has beenconsistently underperforming by giving away 60% revenues to it's payrolees and otherwasteful activities. The navy meanwhile has been languishing for the lack of criticalcomponents and even then its budget has been slashed to 13.5% percent.

The policy makers have to realise that in a warlike situation, the enemy wouldn't indulgeeach of three arms separately on our terms. It would be an all-out war for supremacy. Thekey point to note over here is that despite our focus on stopping Pakistan in J&K andcontaining China based on our previous four wars concentrating on land forces, we have totake an integral view of the situation.

A joint services command like that of US would greatly help in inter-coordination and propersetting of priorities. A bottom up budget with flexibility to allocate money on basis ofrequirements and coordination with local industries is required. Rather than a single chief,the forces should be integrated under 5-6 commands with chiefs from various servicesfocussing on the area based approach. Until these basic steps are taken, we would continueto languish in our defence capabilities

Topic: Indian Economy – Financial Sector

Q) Do you think the new monetary policy framework signed between government of Indiaand the RBI will help the latter get more autonomy? Critically examine. (200 Words)

Business Standard

Business Standard

Ans- Based on Urijit Patel Committee recommendations, government and the Reserve Bankof India (RBI) agreeing over a new monetary policy framework with the primary objective ofcontaining inflation.

Many people feel it will give more autonomy to RBI which is in sync with the central banksof many world big economies. The agreement says, once inflation reaches beyond thecomfort zone, both at high and low levels, RBI should use whatever in its command to bringit to the comfort zone. This basically gives autonomy to RBI.

RBI act will be amended for the formation of a five-member monetary policy committee(MPC) headed by the RBI governor. Out of the five members, three were suggested to befrom RBI (the deputy governor and the executive director in-charge of monetary policy).This composition of committee will reflect the independence of RBI, it should have expertsas members and should not have government nominee as members.

India in past has paid price for not having clear monetary policy. So this step should improvethe situation and also ease pressure on RBI to pursue a particular course of policy.In general, this mechanism is welcome - since it brings to India the formal accountability andtransparency about future actions that is the hallmark of modern central banking but thereare still few areas where RBI cannot still do much.As, RBI targets CPI where the weight of food items if around 50% but food inflation in Indiais mostly dependent on non-monetary factors such as production and supply chains, rains,harvest etc. In this case, RBI may signal intent but it will not have much impact on groundand RBI will find hard to achieve inflation target.

Also, RBI dont have any control over fiscal responsibility or debt control which governmentbreach again and again. So again, RBI can't do much here as well.This step is a much welcome step and will definitely improve the situation in India withrespect to monetary policy but we need to be cautious and government also need tocontain fiscal deficit and control its debit.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth,development and employment.

Q) Critically examine the importance of findings and recommendations of the InterimReport of the Bankruptcy Law Reform Committee for Indian economy. (200 Words)

The Hindu

Ans- Indian laws are often termed as the toughest laws for the running of businesses inIndia. To improve business condition in the country, Bankruptcy Law Reform Committee wassetup by the government in Aug, 2014. Some of the recommendations of the committeewhich submitted its report are-

1. Early recognition of financial distress in company and timely intervention by thegovernment to rescue the organization2. Liquidate un-viable company as soon as possible3. Allow secured creditors apply for the rescue of the company, earlier it was filled after thecompany have beendefaulted by 50 per cent of its outstanding debt4. Unsecured creditors representing 25 per cent of the debt be allowed to initiate rescueproceedings against the debtor company5. Recommendation on individual solvency

Effect of recommendation if implemented-

Positive effect1. Improve the rank of India on ease ofdoing business2. Easy exit policies are one of the criteria considered by entrepreneurs before setting anyorganization3. Early intervention by the government will save the organization from liquidation

Negative effect-1. Various provisions which deal with the early intervention by the government to saveorganization from being defaulted in already available under various laws, ineffectiveimplementation of existing laws are major problems2. Many small businesses and micro enterprises are managed by people who do not havemuch knowledge about laws and are largely illiterate, thus, without required knowledge ofexisting laws, proper implementation seems to be a distant dream3. In lieu of getting subsidies and tax benefits through state intervention, entrepreneursmay show a well running organization as a sick organization

Topic: Indian Economy – Employment issues

Q) What is the importance of ‘Great Compression’ in American history? Do you think Indiatoo can experience ‘Great Compression’? If so, suggest what policy measures need to beimplemented by the government. (200 Words)

Business Standard

Reference (BusinessWeek)

Ans- Great Compression{GC} was period Post WW2 till 70's which took the form of Greatdivergence{GDI}. GC was the used as US govt policy to narrow the Gini index [ reduce theincome inequalities,wealth concentration] ,which included measures viz unionisation,legislation for minimum wages ,Overall the view was take the slice of income from best paidand giving it to the worst Paid. Indeed this Economic policy was way ahead for various othercountries.

In context to India which recently in its Economic survey 2015 had theme "creatingopportunities [ of economic growth] and reducing vulnerabilities[ economic inequalities]had similar stance, though in the milder format . In India economic inequalities are relativelyhigh as shown in the Gini Index which is 33.4% [ mean 33% people have greater control overresources ]GDI adopted by US government was ,to weaken social security net and support the alreadybest paid , have created wide disparities among the people as shown in 2010 GINI indexwhich is 41% .

Progressive taxation which means taxing more to rich, is a way which was used by US backthen, is similar to Recent Budget 2015-16, where no populism or reduction is tax slabs was

made. Also similar stance of progressive taxation and cess on items which are generally usedby Upper middle class or rich class can be seen in same Light

This policy may work, provided the effective implementation and Leakage provetransmission of such funds from rich to the Social welfare . For this Though Govt havesought leak-less JAM trinity number, it will be time and space which will decide the outcomeof policies

Topic: Investment models

Q) The most recent union budget and the economic survey have pointed out that many biginfrastructure projects under PPP model are stalled thanks to variety of reasons. Theysuggest revisiting and revitalising PPP model to complete stalled and new projects in a time-bound manner. In this regard, what amendments have been proposed to PPP model? Whatchallenges these amendments would face? Examine. (200 Words)

Business Standard

Ans- With India aiming for double digit growth in coming years, infrastructure sectordevelopment was rightly identified by budget for such growth. The PPP model, especially ininfrastructure currently followed was under stress due to structural reasons and budgetoffers following amendments to revitalise it.

1.Coming forward to take more risk in a PPP contract than the private partner to encourageprivate sector to invest.2. Willingness to renegotiate the already finalised PPP contracts through IndependentRenegotiation Committee as few PPP projects have become unviable due to delays in landacquisition, legal procedures, environmental clearances etc.3.On an encouraging note, to reduce the stress of NPA's on banks and thus a possible legalhassle for players involved in long gestation infrastructure projects, government proposedto institute a National Investment and Infrastructure Fund (NIIF) with an annual inflow of Rs20,000 crore to finance infrastructure projects.4. A promise on new Bankruptcy law for early recognition of stress to refinance them andalso enabling an early exit for private players in case on un-viability will increase the privatesector confidence to partner in PPP projects for infrastructure.5. Decision to increase the capital expenditure of PSU's to develop infrastructure.

Challenges to these proposals:

1. Greater commitment to finance infrastructure may undermine fiscal credibility ofgovernment in short and medium term.2. Respecting Land Acquisition, environmental and other laws while continuing with fastpaced infrastructure growth is challenging.3. Renegotiation of contracts should not completely take-off risk and responsibility fromprivate players.

Topic: economics of animal-rearing

Q) Critically examine what effect the ban on cow slaughtering by some of the states in Indiawill have on economy and society of India. (200 Words)

The Indian Express

The Hindu

Ans- No state law explicitly bans the consumption of beef except Maharashtra. Cowslaughter is banned in almost every state of India, except Kerala and the Northeastern states,while buffalo slaughter is legal in most states in India. There will be some good & some bedeffects of the ruling.

effect of ruling on society

1. Cattle slaughter in India is a historically taboo subject, because of the cow's traditionalstatus as a sacred animal in Hinduism, the largest religion in the country.2. The new rule is expected to hit the Muslim community hard, some of whom own amajority of the beef-related businesses.3.undemocratic is the government's crude attempt to regulate, dictate and censor thedietaryhabits of Indians. Banning cow slaughter involves preventing people from choosing whatthey eat. Permitting it would not impose a particular diet on an individual or group.4.Abstinence from beef-eating is largely a caste or class question among Hindus. The lowcastes prefer beef to other meat for reasons of taste and habit too.5.more important, surveys of butchers in different states show that three-fourths of all beefis consumed by non-Muslims, largely Hindus. A higher proportion of the sellers of cattle areHindus.it will create differences among different communities.6.Why save the cow only but not its poor distant cousin buffalo?its like Casteism amongcattles.

Effect of ruling on economy

1. But because of religious sentiments and bans in various states, most of India's beef isexported - with a 20% share of the global market and exports worth more than $4bn(£2.6bn) a year, it is now the country's top agricultural export, beating the more famousbasmati rice. Buffalo meat, however, accounts for 80% of the exports.2. Following the Maharashtra ban, there is concern over what will happen to bulls andbullocks or to cows too old to produce milk or to give birth.3. Their owners, mostly farmers, could now be stuck feeding them for years until they die ofnatural causes.4. It will render thousands of people without jobs and would result in spiralling of prices ofother meats.5. Beef is more popular with the poor in India as it is typically cheaper than other meatssuch as chicken or mutton. It’s an important source of protein for those who do eat it, butnow meat itself might become unaffordable.

Topic: Indian Economy – money-laundering and its prevention

Q) In recent union budget, the union government has announced that it would amendcriminal codes and introduce stringent provisions to punish tax evaders in an attempt tocurb black money. Do you think such measures will help in curbing circulation or stashing ofblack money in foreign accounts? In your opinion, ideally what should be government’sapproach? Critically examine. (200 Words)

Business Standard

Ans- Black money has evolved into a major political issue and with wild surmises about itsamount, it has captured our imagination. The SC had ordered formation of a SpecialInvestigation Team on this issue. In the union budget of 2015, the central governmentannounced some measures like more rigorous punishment fo tax evasion, stronger laws forbenamo transactions and not allowing offenders to approach the Settlements Commission.But these steps leave much desired for more focussed action plan :1. They do not address the inefficiency and corruption in our taxation regime and put morediscretionary powers in hands of taxmen. As our experience shows this will lead to moreharassment and litigations.2. While we need to act to simplify our rules and regulations, promote more ease of doingbusiness and uncomplicate procedures for investment, we are merely prescribingpunishments without understanding why black money is generated.3. Certain sectors like real estate or gold trading act as parking space for unaccountedmoney that needs to be addressed.Ideally the government should take following steps:1. Simplify rules and regulations of investment and further liberalize economy.2. Demonetize higher currency notes.3. Just as USA PATRIOT ACT, all transactions by or with Indians, above a threshold, must getreported.4. Introduce amnesty for voluntary surrender of black money, set up a Tax Tribunal andincrease punishment in tax evasions.5. Round tripping of black money is a major issue s it distorts market and boosts up assetsprices. Tax deductible at source and closing off traditional routes of inflow like Mauritiusroute needs to be done.6. More international cooperation in areas of money laundering and Benami transactions.7. To exhibit its seriousness, government should, ideally, legislate to force disclosure ofassets, income and expenditure of political parties and bring them under RTI.

Topic: Indian Economy and issues relating to mobilization of resources

Q) When RBI cuts key interest rates, the Sensex soars and the move is welcomed by thecorporate world. How ill such rate cuts affect common man? Critically examine. (200 Words)

The Hindu

Business Standard

Ans- The recent rate cut by RBI of repo rate from 7.75% to 7.5% has been welcomed bycorporate world and has sent sensex to new heights. It has various implications for acommon man:1. Banks can borrow loans from RBI at reduced rates and so will have to lower their ownbank rates. This means more loans cam be doled out and that too cheaper ones. So cheapereducation, home or car loans and smaller Equated Monthly Instalments, good news for ourmiddle class.2. Business can avail easier loans so bring down their costs, expand enterprise and generatemore employment.3. Inflation cn be checked.4. More expenditure than savings by people so drive up the growth and demand.5. More trading in markets and speculations will build upon trust.However, there are some negtive affects also:1. Reduced savings and more demand will pump up the prices of various goods.2. Loans given out may cause an economic bubble to form and this may burst as in US in2008.3. Depriciation of rupee will result. Currently oil prices are in check so no issue. But volatilityof rupee to crude oil prices is large and geopolitical issues are disturbing trends. Seasonalchanges in fodd prices is alao an issue.4. Banks may have to suffer from issues of non-performing assets and their own margins.

So the present situation brings cheers to common man but continuous monitoring isrequired by RBI.

Topic: Indian Economy – General

Q) “While inflation targeting has some rationale in advanced economies, where food’scontribution to the CPI and consumption expenditures is barely 20 per cent, and agriculturalmarkets are far more organised, there is an inherent danger of it creating an anti-farmerpolicy bias in a country like India.” In the light of recent monetary policy framework signedbetween RBI and the government, critically comment on the statement. (200 Words)

The Indian Express

Ans- The recent monetary policy framework agreement between RBI and governmentinstitutionalizes the inflation control measures and a welcome sign. But there are someissues:

a) RBI determines its monetary policy based on CPI figures where food and non alcoholicbeverage has about half the weightage (45.86%). Their price are more controlled byweather condition, supply chain management, market structure etc and less by monetarypolicy tools like interest rate.

b) Food and fuel price drives the CPI and mostly it depends on external factors like volatilityof oil producing region, adverse weather etc. RBI can only react by increasing interest ratewhich will dampen growth and wont tame inflation either.

c) RBI can only give a buffer time to the government to address the core issues andsafeguards the economy from drastic change in macro economic indicator but fortemporarily. In this case, making the RBI answerable for explaining the reasons for missinginflation target does not make sense.

d) In the advanced economies, food commodities share barely 20% of inflation index andagriculture market is organized which makes it responsive to the monetary policy of centralbanks.

How this will create anti-farmer policy bias?

The pressure of limiting inflation to the set figures will make government frequently resortto 1. Not increasing MSP regularly 2. Imposing export ban 3. Duty free imports. This willaffect the the agriculturalists and workforce dependent on agriculture.

Both fiscal and monetary policies are needed to control inflation. Instead of throwing thiscompletely on RBI, government should think over structural reforms which cause inflation.

Topic: Indian Economy and issues relating to planning, mobilization of resources, growth,development and employment.

Q) Do you think increased importance on building physical infrastructure either by involvingprivate or public means since independence is adversely affecting growth of human capitalin India? Critically evaluate. (200 Words)

The Hindu

Ans- Human Capital also know as Human Resource is the skill, knowledge and experience ofindividual, organisation or nation. A nation’s biggest asset is Human Resource developmentwhich needs better physical infrastructure(roads, education institutes, bridges, electricity )and invisible infrastructures(services, education, sanitation) for realisation of full potential.

Physical infrastructure needs huge investment which led to focus on public and PPPinvestment on this sector and ignored Human Capital development as for election andpolitical advantages visible infrastructure holds more value.

Also, for providing mass scale employment and developing new urban areas, physicalinfrastructure was boosted since Independence. India’s education system also produced

more than enough to qualify for domestic job requirement. Most of the high-tech researchand technologies we directly buy from foreign nations at considerate price.

Also, primary sector of economy which caters largest employment to nation doesn’t needskill and education expertise. All such factors summarises to lesser focus on Human capitaldevelopment. International organisation like World Bank, IMF and ILO also never focussedon skill development for India, rather they only asked for trade transparency, EXIM policy,cheap loans for infrastructures etc because, the deficit in infrastructure was matching upwith deficit in Human capital.

A Developed HR will be of no use if there is no physical infrastructure and vice-versa. BothHR and physical infrastructure have gestation period and takes time to mature and becomebeneficial.

Hence, balanced attention to both is needed.

Topic: Indian Economy and issues relating to mobilization of resources

Q) What do you understand by ‘net neutrality’? Do you think regulating internet hasnegative consequences? Examine. (200 Words)

The Hindu

Ans- Net Neutrality- In internet traffic every data irrespective of its origin is equal and itstransport over network must be considered equally without giving some preferences tosome. Net neutrality is core of internet governance over various networks that ISPs shouldnot discriminate.Effect of Regulating Internet::Internet traffic in various countries is regulated by their law of the land; Like China imposesban on multiple websites. Similarly India too has started to interfere in such matters inrecent times. Government's contentions on Public safety and national security are valid;however there must be clear cut guidelines and laws to manage and implement such bans.For example recently Supreme court of India asked to ban all porn websites in India onargument that porn is increasingly responsible for rapes in India. Such flawed and arbitraryargument to ban some traffic is against the principle of net neutrality and it will cause adebilitating impact on internet business and freedom of speech. So regulation of internettraffic must be carried out in spirit of striking a balance between freedom of speech andsome restrictions of freedom of speech (as it is not unlimited).

Topic: Investment models; changes in industrial policy and their effects on industrial growth.

Q) It is said that the proposal to transfer risk away from the private sector to thegovernment under PPP model essentially returns India to a pre-2000 model for investment.Examine the Pre-2000 model of investment and why this model is despised by someeconomists. (200 Words)

Business Standard

Ans- PPP as a model for investment only started in India in 1997.Pre-2000 model ofinvestments in India had following characteristics:1. Government /Public sector was the main risk bearer and guarantor in all projects ofeconomic and social importance .Public units were mainly used to build infrastructurebecause the private sector was far less available or welcomed.2.While private players cooperated in completing the projects, the government carried themaximum responsibility for their quality ,standard and maintainence and expectedoutcomes of the projects .3.Projects choices were often saddled with politicization, populism and appeasements whiletheir economic viability and other aspects were not properly analyzed.4.Since,the government bore the risks, it used to pump huge capital on operation ofcompleted projects ,eradicate their failures ,their revival and improvement in qualitybuilding huge burden on exchequer .5.Very rarely, private players who entered into contract to build projects were held liable fortheir failure, delays and rising cost of their uses.They were guaranteed returns on theprojects built by them.In case they failed to collects their expected revenues, thegovernment used to pay from it's own exchequer to compensate their deficit.There are several detractors of such model.The main reasons being:1.projects viability were less cared.2.When the state takes all the risks,there is little reason to think that right projects will bepicked.3.Such model of PPP leads to polticization and serves as an excuse for vast transfer of scarceresources to the private sector in guise of gauranteed returns.4. Decreases inefficiencies and accountability; dampens quality and competitions ;oftenescalates costs of projects.

Topic: Awareness in the fields of Space, bio-technology; Science and Technology-developments

Q) Write a note on different scientific theories on origin of life. Recent experiments by NASAsuggest that life might have evolved ‘abiologically’. Examine how. (200 Words)

Business Standard

Ans- The Origin of life, is one of the greatest unsolved questions in science. Over the years,many theories have been put forwards regarding the origins of life.

1- Panspermia- this theory states life did not begin on earth but was brought from outside,maybe frommars as some scientists have controversially suggested.

2- Electric spark theory- This theory states that lightning might have helped create thebuilding blocks of life.

3- Communal clay- This theory states that life evolved from clay, which helped concentrateorganic compounds together.

4- Deep sea vents – some suggest that life might have started in deep sea vents, which spewhydrogen rich molecules

5- Cold start – it is said that the cold nature of the earth could have preserved key organicmolecules in the ocean from UV light.

But recently, scientists at NASA discovered that neucleobases which form the basicstructure of DNA and RNA can be synthesised abiologically.

The scientists discovered that when water contain pyrimidine was frozen to extremetemperatures in vacuum and was then exposed to UV radiation, it broke down to formUracil, Cytosine and Thymine.

Scientists argue that since many amino acids and neucleobases can be created abiologically,key ingredients for DNA, RNA and proteins can be synthesised the same way too.

Topic: Security issues

Q) The United States with cooperation from other Western countries is increasinglydepending on eliminating top leadership of terrorist organisations as counter-strategy tofight terrorism and weaken those organisations. Do you think this is a sound strategy?Critically analyse. (200 Words)

The Hindu

Ans- Terrorism is cancer to International peace and economics. U.S and her allies havealways been in forefront to tackle terrorism firsthand because of their economic interestsand responsible position in international fora.

The concept of “Decapitation” to eliminate terrorism by killing and effort fully targeting themembers in highest cadre of organisation was tried since the US invasion in Iraq and killingAl-Qaeda leaders. Though it appears that such decapitation would lead to organisationcollapse but in reality it’s not always. If only target killing of leaders are sole purpose than itevokes mass emotions and raises the new recruitments. Also, terrorist organisation mayappear for some time to be dormant but it’s not as evident from 2007-08 US’s mission inIraq to finish Al-Qaeda top leaders and later part of 2012 again Al-Qaeda’s operation startedemerging also many old members joined ISIS. Terrorists also switch their organisation oncethere are left leaderless.

Hence, we need to take following steps:

(1.) We need to understand what message terrorists like ISIS want to convey. They wantnew recruit from social media, they want to send terror waves, glorifiy their beastly deedsto attract extremists thinking people. Hence, govt should stop broadcasting their any act,disabling any content ISIS want to post in social media and not giving any voice to them tointeract with young minds.

(2.) Govt should equally focus on top leaders as well as mass training centres to eliminatefuture of terrorism.

(3.) Images and graphics of decapitation should not be publicised. Also, making peopleaware that terrorism is because of wrong interpretation of religious book and not the otherway round.

Terrorism can be effectively eliminated only with long term prudent plan which shouldinclude: eliminating terrorists->There social media presence-> preventing new recruits->cutting off their economic channel -> providing stable democracy in the region -> and thenmonitoring peace in the region with domestic govt cooperation for at least 10 years periodand then phasing out.