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IASbaba’s TLP 2016 [15th February]: UPSC Mains GS Questions [HOT]: Synopsis

  • February 16, 2016
  • 3
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IASbaba’s TLP 2016 [15th February]: UPSC Mains GS Questions [HOT]: Synopsis

 


1. The rail route to economic growth must be the policy priority. Do you agree? What reforms would be required to transform Indian Railways as the driver of prosperity and sustainability?

Need for prioritizing:

  1. Employability- life line of nation currently employ over 13 lakh people. Expansion of rail route provide opening of employment opportunities
  2. Transportation cost- Cheaper compared to road routes at the rate of Rs. 2 per net tonne-Km for freight and Rs. 1.6 per passenger-Km (Economic Survey 2014-15)
  3. Boost to industries- cheaper transportation cost will lead to cheaper raw material and finished goods transportation
  4. Contribution to INDCs- India has committed to reduce 33-35% of GHGs emission by 2030 (base 2005) under INDCs. Rail route with lesser GHG emission compared to roads, (75-90% less energy for freights and 5-21% for passengers (Economic Survey 2014-15)) can help India in sticking to INDCs
  5. Passenger and freight movement-Around 30 million people and 3 million tons of freight movement occur daily, integrating various regions and boosting various sectors of the economy.
  6. As per the Economic Survey, that a Re 1 increase in the output of the railways increases the GDP by Rs. 3

 

Reforms needed to transform Indian railways:

Implementation of Bibek Debroy committee recommendations which suggests railways to concentrate on its core operations and outsourcing the subsidiary activities.

  1. Slowly reduce the debt burden, by involving private sector in areas other than operations, by bringing in Private sector we may increase the transparency, accountability, efficiency, technology and latest know how.
  2. Sam Pitroda committee recommendations for modernisation of railways and Kakodkar Report for railway safety should be simultaneously incorporated.
  3. Speed enhancement by doubling tracks, dedicated fright corridor can be an option for faster delivery of goods.
  4. Speedy completion of DFC’s (Dedicated Freight corridors) both WDFC & EDFC, which could ease congestion. And are environmentally sustainable (after completion of these two DFCs, these will lessen the Co2 emissions from 582 million tonnes per year to 124 million tonnes).
  5. Undertaking PETS (Preliminary engineering & traffic survey) for additional freight corridors, like North – South, East – West, East coast and South corridors.
  6. Kayakalp and other railway institution may suggest more innovative methods to be used for railway sector overhaul.
  7. Setting up a railway regulatory authority of India to create a level playing field for the public and private players, dispute settlement, tariff determination etc.
  8. Creation of SPV for delivery of projects.

Best answer: Amay

Rail route to economic growth should be made policy priority due to following reasons:

  1. Employability- life line of nation currently employ over 13 lakh people. Expansion of rail route provide opening of employment opportunities.
  2. Transportation cost- Cheaper compared to road routes at the rate of Rs. 2 per net tonne-Km for freight and Rs. 1.6 per passenger-Km (Economic Survey 2014-15)
  3. Boost to industries- cheaper transportation cost will lead to cheaper raw material and finished goods transportation
  4. Contribution to INDCs- India has committed to reduce 33-35% of GHGs emission by 2030 (base 2005) under INDCs. Rail route with lesser GHG emission compared to roads, (75-90% less energy for freights and 5-21% for passengers (Economic Survey 2014-15)) can help India in sticking to INDCs

Reforms needed to transform Indian railways:

  1. Investment- Railways owing to underinvestment has resulted in congestion and over burdening. There is need to increased investment in form of public investment as well as through PPP mode
  2. Independent regulatory body- Set up of Rail Regulatory Authority of India to oversee functioning of railways with accountability and transparency (Bibek Debroy Committee)
  3. Transition to Commercial accounting: to assess the span of return of investment for projects (Bibek Debroy Committee)
  4. Safety- to increase safety to passengers and ensure faith in rail transport there is need to overhaul safety measures as suggested by Kakodkar Committe

 

2. The budget session is approaching. What do understand by zero based budgeting and performance budget?. Bring out the differences and merits.

Budget is an estimation of the revenue and expenses over a specified future period of time. Performance budget and Zero Based budget are two important types of budget.

Performance Budget is a budget that reflects the input of resources and the output of services for each unit of an organization. This type of budget is commonly used by the government to show the link between the funds provided to the public and the outcome of these services.

Merits of PB:

  • Improves budget decision-making by focusing funding choices on program results
  • Focuses more on outputs or outcomes of services than on decisions made based on inputs.
  • Allocation of funds and resources are based on their potential results
  • Places priority on employees’ commitment to produce positive results, particularly in the public sector.

Zero Based Budgeting is a method of budgeting in which all expenses must be justified for each new period. Zero-based budgeting starts from a “zero base” and every function within an organization are analyzed for its needs and costs. Budgets are then built around what is needed for the upcoming period, regardless of whether the budget is higher or lower than the previous one.

Merits of ZBB:

  • ZBB allows top-level strategic goals to be implemented into the budgeting process by tying them to specific functional areas of the organization, where costs can be first grouped, then measured against previous results and current expectations.
  • Can lower costs by avoiding blanket increases or decreases to a prior period’s budget.
  • Favors areas that achieve direct revenues or production

Differences between PB and ZBB:

  • ZBB is costly and complex while PB is relatively cheaper and simple
  • ZBB fails in long term planning while PB has a long term perspective
  • ZBB focuses on judging and prioritizing while PB focuses on results
  • ZBB is non-inclusive while PB is inclusive

ZBB is more efficient compared to PB

However, both the types of budgets have their own merits and demerits. Depending on the needs and resources of an organization, suitable type of budget should be adopted.


3. The advent of e-commerce companies and the exponential rise in their reach require effective regulation in order to not only protect consumer interests but also support their own growth. Elucidate.

 

Introduction: 

  1. Increasing penetration of the internet.
  2. Every sector and every product has been inculcated in its ambit.
  3. Cumulative annual growth rate was 30% from 2009 to 2014.
  4. It will be a $80 billion industry by 2020.
  5. Mention laws presently in place. E.g. IT Act, 2000.

Consumer interests:

  1. Consumer grievances addressed.
  2. Consumer safety addressed.
  3. Quality of product.
  4. Over-the-counter sale of drugs checked.
  5. Privacy of the consumer respected.
  6. Predatory pricing techniques will lead to demolition of MSME and brick and mortar shops.

That would lead to monopoly of e-commerce industries and eventually uncensored prices.

Growth will be effected:

  1. In consonance with FDI.
  2. Increase in outreach.
  3. Consumer trust will be enhanced.
  4. Massive employment.
  5. Wide range of choices to consumers.
  6. Coherence in national and state policies.

Conclusion:

Emphasize on the need of regulations.  You can benefits Make-in-India, Digital India and Start-up-India can accrue from it.

 

Best answer: Kept6363

In recent years, Indian economy has seen a spurt in e-commerce models. They have brought with them new set of challenges. Addressing them through regulation is in the interest of both consumers and e-commerce portals.

Effective regulation is needed to protect the consumers because of issues such as
1) Authentication and Identity:-Transaction across the internet happens between people who are not physically present. This may raise the issue of capacity and legitimacy of the person to enter into a contract.
2) Privacy:-Personal details are required to complete the online transactions.E-commerce platforms may collect indirect information about personal choices and patterns of search. Regulation is important to maintain privacy of the customer
3) Non-application of caveat emptor:- Traditionally buyers could not hold the seller responsible for any patent defect which could be have been easily discoverable by buyer’s inspection. The principle of ‘Caveat emptor’ or ‘Buyer beware’ was applicable in such cases. However, buyer cannot physically verify the goods online and has to rely on seller’s description. Thus regulation is important to ensure that products can be exchanged without any hassle with the seller ensuring reverse-pickup
4) Unfair Trade practices and Unethical business practices: – Their possibility has grown with e-commerce platforms. For example, regulation is imperative in case of illegal and unregulated online sale of medicines.

 

Regulation would also further the interests of e-commerce platforms in various ways 
1) Card payment is often resorted to in online payments. This increases the possibility of cyber frauds
2) Business model: – There is lack of clarity over the business model which isfollowed by these platforms. They claim to follow a ‘marketplace model’ where they connect retailers with customers without any product inventory of their own. However, some have evolved a ‘fulfillment model’ where they also engage in warehousing, packaging and delivery. Clarity on this through regulation is imperative
3) Taxation: – Since there is confusion over the business model, there is confusion whether to apply tax where the warehouse is located or on sale of goods or on commission earned. Kerala has imposed sales tax on slew of e-commerce platforms. States argue that they cannot be deprived of revenue generated by high frequency of online sales.
4) There is growing apprehension that e-commerce platforms would lead to destruction of offline shops leading to unemployment. Balancing between competing interests in required
5) E-commerce companies are ignorant of cyber laws (important to protect sensitive information) and violate laws such as FEMA.

These issues need to be comprehensibly dealt with through effective regulation. A separate law on lines UK (Consumer Protection (Distance Selling (Regulation), 2002 is needed. Protection of consumer interests and clarification on their operations would boost confidence of all stakeholders. This would especially help Startup India Programme since many e-commerce portals are operated by first generation entrepreneurs.

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