IASbaba’s TLP 2016 [9th February]: UPSC Mains GS Questions [HOT]: Synopsis

ARCHIVES

IASbaba’s TLP 2016 [9th February]: UPSC Mains GS Questions [HOT]: Synopsis

1. Subsidies are not only regressive but also cause misallocation of resources. How far recent initiatives taken by the government in this regard would address the issue? Are these steps sufficient? Critically examine.

What is subsidy: indirect or implicit transfer of resources to the people to make goods and services affordable, can be provided to producer, supplier or anyone in supply chain

Why is India Pershing: because of the higher incidence of poverty, and general low standard of living so by per suing DPSP government provides subsidy to either support the production of a particular good or service or to make that good or service affordable to the people

Body:

Why regressive:

1) LPG-the bottom 50% of households only consume 25% of LPG.

2) RAILWAY- the government fiscal expenditure due to subsidised passenger fares is Rs 51,000 crore, but the bottom 80% of households constitute only 28.1% of total passengers.

3) fuel- fuel subsidy cornered by the higher end luxury vehicles and SUVs

4) Agriculture-subsidy in agriculture has led to skewed preference and over use of Urea and P and K fertilizer, causing soil degradation, ground water contamination and pollution of water bodies

5) electricity-higher income households cornering the benefits consuming more at the expense of poor

6) Pilfering, diversions and corruption have also compounded the problem

What government has done?

• PAHAL and give it up for LPG,
• Nutrient based subsidy for agriculture, separation of transmission lines and better metering to stop overuse of electricity
• DBT
• JAM TRINITY

 Sufficiency:

1) Needs reliable data i.e quality of data collection needs to be increased

2) Better targeting: either based on geography, family or individuals

3) Plugging leakages: using ICT and BIOMETRICS and end-t-end computerization

4) Needs coherent policy so that long term empowerment initiatives for the poor are not jeopardized

Best Answer: Written by MADSTER 

Indian Gov since independence has subsidized many industries and products with the objective of
• Introducing higher consumption/production

• Offsetting market imperfections and achieving social policy objectives

Although the poverty ratio has reduced the number of people below poverty line hasn’t reduced in proportion to the funds spent on the poverty alleviation schemes .The regressive nature of the subsidies are quite evident from the food subsidies .The amt spent on food subsidies has doubled since 2010-11 but the penetration of PDS hasn’t seen much improvement nor has the quality of food provided .LPG subsidies has seen misallocation of resources with 50% of the poorest consuming only 25% of subsidy

Some of the recent Incentives and their reach–>

• PAHAL–>it aims at linking subsidy to Aadhar card and directly transferring the money to their accounts. The problem of misallocation is solved by providing these subsidies only to ppl with income less than 10lac .The only problem is that incomes will be self proclaimed which might lead to dubious records
• Kerosene Subsidy–>The subsidy is decided by the total amt of kerosene bought/no of eligible household and the amt is directly transferred to their bank accounts. But there have been misuses like adulteration which has led to overestimation
• JAM trinity–> This is being used for verification and allocation of subsides so that they are properly targeted and prevent misallocation.
• Fertilizers Subsidy–>Gov generally provides subsidies to the Fertilizers companies which in turn sell fertilizers at subsidised prizes but this has led to leakages and cases have been reported of subsidy not reaching the farmers. The gov is now planning to transfer the amt directly in the bank accounts.

Thus subsides will succeed in its objective only if the leakages and misallocation are taken care of and recent steps like DBT ,JAM trinity will surely help the cause.

2. There has been a recent trend of reviving the legacy of national leaders who took part in India’s freedom struggle. What does this trend denote? Do you think leaders like Subhash Chandra Bose have been given due credit and recognition in history? Analyse.(Note: The question attempts to examine your ability to handle sensitive questions being asked by UPSC)

Two parts to answer in the question.

What does the trend denote?

• Attempts on inheriting the legacy of freedom fighters
• Political parties & organizations trying to align their own ideologies with the freedom fighters.
• A new method of attracting votes and making a new vote bank.
• It is also done to malign the rival party which has been associated with a freedom fighter, who was ‘allegedly’ given disproportionate importance as compared to other contemporary stalwarts.
• Attempt to redefining history by blurring it with the ideology of their chosen freedom fighter.
• Enhance ideologically diversity in freedom struggle (ex. S C Bose vs Mahatma Gandhi) – increase respect for the leaders – multiply nationalist feeling
• Mainstreaming of certain sections who feel their contribution has been neglected (B R Ambedkar) – promoting national unity
• Fight for ideological supremacy – changing the future course of our action

The main positive thing about this trend is that the importance of the founding fathers of the nation is being propagated in the country especially among the youth. This also generates pride in our country and its people.

Second part: Has Subhash Chandra Bose been given his due credit in the history

Subhas Bose has not been given due recognition in view of his invaluable efforts towards India’s freedom struggle for around 6 decades. Then there are leaders from north-east who were also not recognized till recently. For eg. Rani Gaindinliu, a Naga leader from Manipur, who worked for the independence of this nation.

Reasons can be many:

1. Main instrument – nonviolence and satyagaraha (contrary to SC Bose) – international acceptance.
2. Role of historians – congruency to certain beliefs.
3. On what principles we wanted to shape the future of our country – proponents of that had to be idealized.
4. A single party remained in power at the centre for around 6 decades, which was associated with only a few leaders, due to which other leaders did not get their due attention.
5. The writings in history books especially at school level, did not recognize many leaders’ due contributions and focused mainly on few.
6. The turn of caste, religion and regional politics in the independent India also contributed to the same.

Best answer by RASH BIHARI LAL

History does not always award you with what you deserve. Same is the case with our national leaders of Independence movement. But recently we see a trend of reviving their legacy by awarding them Bharat Ratna, naming government schemes after them etc.

This denotes the following:

1. Enhance ideologically diversity in freedom struggle (ex. S C Bose vs Mahatma Gandhi) – increase respect for the leaders – multiply nationalist feeling
2. Mainstreaming of certain sections who feel their contribution has been neglected (B R Ambedkar) – promoting national unity
3. Opportunistic politics – appeasement policy – vote bank
4. Fight for ideological supremacy – changing the future course of our action

This is a fact that not just S C Bose but many nationalist leaders (ex. Sardar Patel, Malviya etc.) did not get the space they deserved in our history books. Reasons can be many:

1. Main instrument – nonviolence and satyagaraha (contrary to SC Bose) – international acceptance.
2. Role of historians – congruency to certain beliefs.
3. On what principles we wanted to shape the future of our country – proponents of that had to be idealized.

History is not just an account of what happened in the past but a hint as to how we want to shape our future. Asymmetry in historical records cannot be completely eliminated but at the same time we have to make sure that we do not neglect valuable contribution of our leaders.

3. The best model of financing smart cities in India is self financing wherein cities generate their own capital to create assets and public infrastructure. Discuss the viability of this model for Indian cities.

Smart Cities Mission is an urban renewal and retrofitting program by the Government of India with a mission to develop 100 cities all over the country making them citizen friendly and sustainable. This requires huge investments to the tune of 7 lakh crore rupees over the next 20 years with an annual investment of 35k crores.

There are broadly two types of projects considered for funding

• Greenfield projects
• Significant funding required as development is done from the scratch
• All aspects of development such as power, water, solid waste management need to be addressed

• Brownfield projects
• Relatively lower requirement of funds as large scale modifications are avoided
• Focus on leveraging technology solutions to deliver citizen services—water supply, solid waste management etc

Though there are several ways of funding the smart cities like government funding, incurring debts from national and multinational sources the best model of financing the smart cities projects is Self-Funding.

Self financing can be done in the following ways:

• Issuing Municipal Bonds—about 10% of funding requirements can be met by this route
• Flexible PPP models—private sector companies are leveraged for technical support, capital funding and oversight of operations
• Infrastructure Debt Funds can be directed to invest in municipal bonds by defining them as eligible investments
• Land monetization—funds can be raised through sale of land and/or commercial and residential real estate, increasing floor area ratio i.e the total floor area of a building in comparison to the size of the land upon which it is built
• User Charges—to cover the cost of service or infrastructure
• Tap Fees—can be levied to cover the cost of tying water meters for new connections to existing lines, charging higher rates for over use of water etc
• Other taxes can also be imposed

1. Green Tax on fuel purchase
2. Urban tax on purchase of new vehicles
3. Betterment charges payable on sale/registration of property

Thus we can see that the above mentioned methods of self financing are viable and the cities can sustain themselves as well as ensure creation of better physical, institutional, social as well as economic infrastructure. There is only a need of political will to make it viable and successful.

Best Answer: Written by White Dragon

The smart city mission has been launched in the country with a view to make 500 smart cities by 2022. The biggest hurdle facing this scheme is the financial. The government has decided to grant 500 cr to each city and the state government will also contribute it share. Seeing the ambitious goals which this scheme seeks to achieve, the funding is very small and much more will be required. Amidst this there is a talk of cities self financing themselves for investment in infrastructure and assets. Following methods of financing can be available to cities

1. Municipal bonds
2. Taxes like professional taxes.
3. PPP partnerships.
4. Loans from domestic and international financial institutions.

This method of self financing is considered as one of the best in current scenario as 

1. The burden of finance will not fall on central government but the people of cities who will be major beneficiaries.
2. Flexible, to the need financing. The cities which need more finance will not be starved and cities requiring less will plan accordingly.
3. Greater independence as they are self financing.
4. Speeding up of projects as crucial time taken for funds to reach cities will be greatly reduced.

However, the self financing model is also unviable in following ways.

1. Lack of professionals in local bodies to handle such responsibility.
2. Creation of different levels of smartness among cities based on how their local bodies plan.

Altogether, the model holds great potential and like any other model need to be tweaked to Indian needs. Proper regulations need to be framed for municipal bonds and local bodies loans. Audit mechanism needs to be created and more professionals brought in. The centre and the states too need to release their hold on these local bodies and act more as a coordinator than supervisor.