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Exam Year: 2018

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    The rising protectionism and currency manipulations have disrupted global trade flows and have direct implications for India’s growth, inflation, fiscal balance, and external vulnerability.

    Tools of Protectionism

    Tariffs

    Quotas

    Import Licensing

    Sanctions

    Exchange Controls

    Industrial Subsidies

    Impact of Protectionism on Macroeconomic Stability of India

    Export Slowdown due to high tariffs. Eg: US protectionism under Section 232 hurt India’s steel exports.

    Supply Chain Disruptions lead to higher Production Costs. Eg- higher oil prices after Israel-Palestine conflict

    Imported Inflation due to barriers on food, energy and intermediate goods. Eg: Indonesia palm oil ban.

    Weak Employment in Export-oriented Sectors – Eg: Fall in European demand hit India’s textile and leather clusters.

    Lower FDI Inflows – Uncertain trade regimes discourage long-term investments. Eg- Apple cancelling plant in India after Trump threat.

    Impact of Currency Manipulations on Macroeconomic Stability

    Widening Trade Deficit – Undervalued currencies make their exports cheaper. Eg- China’s managed yuan

    Rupee Volatility creates monetary Policy Challenges. Eg: Yen depreciation in 2023-24 triggered pressure on Asian currencies including INR.

    Higher Inflation and BoP Pressure – Eg: INR touching 83-84 per USD raised petroleum import bills.

    Capital Outflows due to dollar strengthening. Eg: 2022-24 saw FPI outflows during phases of aggressive US Fed tightening.

    Pressure on Forex Reserves – Eg: RBI sold USD in 2022-23 to stabilise INR, reducing reserves temporarily.

    Opportunities for India Amid Protectionism & Currency Politics

    China+1 Advantage in electronics, chemicals, renewables. Eg- Mobile exports crossed USD 11 bn in 2023-24.

    Boost Make in India to build self-reliant supply chains. Eg: PLI schemes in semiconductors, textiles, solar modules.

    Diversification of Trade Partners – Eg- Recent FTA with UK

    Strategic Attractiveness as a Stable Market – Amid volatile currencies and geo-economic blocs, India is seen as a stable investment destination.

    Promoting Rupee Trade Mechanisms – Eg- INR invoicing and Vostro accounts.

    Opportunity to Lead on Fair Trade Norms in WTO, G20 on currency transparency and non-tariff barriers.

    Way Forward

    Enhance R&D (2.5% of GDP), reduce logistics costs (PM Gati Shakti), and expand PLI schemes to boost manufacturing resilience.

    Accelerate FTAs with EU, GCC to reduce over-dependence on a few partners.

    Strengthen FOREX buffers and expand rupee trade settlement

    Encourage domestic production of critical inputs (electronics, APIs, green tech) to reduce vulnerability to global shocks.

    Scale IT, fintech, health tourism, education services to offset goods-trade shocks from rising protectionism.

    By strengthening domestic competitiveness, India can position itself as a reliable, rules-based and resilient player in the evolving global economic order.

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    The SDGs recognise energy as a foundational driver of human development. SDG-7 emphasises ensuring affordable, reliable, sustainable and modern energy for all.

    Importance of Energy for SDGs

    SDG 1 & 2 – Affordable energy reduces poverty and improves food security through irrigation, cold chains. Eg- Solar pumps under PM-KUSUM

    SDG 3 – Clean cooking reduces indoor air pollution and respiratory diseases. Eg- 10 Cr LPG connections under PM Ujjwala

    SDG 4 – Electrification improves learning outcomes and digital access. Eg- Electrification of over 1 lakh schools under Saubhagya Scheme

    SDG 8 – Creates green jobs and boosts industrial productivity. Eg- India’s renewable industry employs over 3.7 lakh workers

    SDG 9 – Supports innovation and sustainable infrastructure. Eg- Green Hydrogen Mission

    SDG 10 – Reduces inequality through universal access. Eg- Rural electrification through DDU Gram Jyoti Yojana

    SDG 13 – Clean energy drives climate change mitigation.

    SDG 5 – Clean cooking reduces drudgery of women and improves participation in the workforce.

    Progress Made by India in Energy

    Clean Cooking Energy – PM-Ujjwala raised LPG coverage to 99% of households.

    Renewable Energy Expansion

    India ranks 4th globally in renewable capacity.

    244+ GW installed RE capacity (50% of total demand)

    Energy Efficiency Gains- PAT, BEE standards saved significant electricity and reduced CO₂ emissions.

    Global Leadership

    International Solar Alliance (ISA) promotes global solar cooperation.

    Coalition for Disaster Resilient Infrastructure (CDRI) integrates climate-resilient energy systems.

    New Technologies – National Green Hydrogen Mission to produce 5 MMT of green hydrogen by 2030.

    Updated NDC Commitments

    45% reduction in emission intensity of GDP by 2030.

    50% electricity from non-fossil sources.

    Net Zero by 2070.

    Challenges

    Import Dependency: over 85% of its crude oil and 50% of its natural gas

    Financing Needs: $160 billion per year to meet 2070 goal ((IEA)).

    Rising Energy Demand: double by 2040

    High DISCOM losses affect reliable supply.

    Affordability concerns – rising LPG refill prices.

    Land acquisition issues for solar/wind parks.

    Going forward, technology integration, financial reforms, domestic manufacturing, and a just transition is needed for Energy Security.

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    The US withdrawal from the JCPOA (Joint Comprehensive Plan of Action) in 2018 and subsequent reimposition of sanctions, has heightened tensions in West Asia.

    Impact on India’s National Interests

    Energy Security

    Regional instability inflates global oil prices, aggravating India’s current account deficit and rupee depreciation.

    Connectivity Challenges

    US sanctions complicate financing and insurance for the Chabahar Port and INSTC– critical to India’s access to Afghanistan, Central Asia, and Europe.

    India’s exports to Iran (pharmaceuticals, rice, machinery) face banking restrictions.

    Strategic and Diplomatic Dilemmas

    Challenge of maintaining strategic partnerships with both Washington and Tehran, while avoiding diplomatic friction.

    Security Concerns- Escalation in the Strait of Hormuz threatens India’s sea-borne energy supplies and security of Indian diaspora in the Gulf. Eg- Red sea crisis in 2024

    How India Should Respond

    Short-term Measures

    Energy Diversification- Strengthen long-term import contracts with Saudi Arabia, UAE, Russia, and the US, and expand strategic oil reserves.

    Protect Maritime Routes- Enhance naval surveillance in the Arabian Sea under SAGAR (Security and Growth for All in the Region).

    Use rupee-rial trade mechanisms and alternate payment channels.

    Medium to Long-term Strategy

    Secure waivers for Chabahar Port and accelerate linkage with INSTC to strengthen access to Eurasia.

    Energy Transition- Fast-track investments in renewables, LNG, and green hydrogen.

    Regional Multilateralism- Promote India-GCC-Iran dialogue for maritime security and conflict de-escalation.

    Supporting IAEA-based diplomacy for restoring JCPOA through peaceful dialogue and achieving Nuclear disarmament.

    A balanced, multi-vector foreign policy is essential to safeguard India’s economic and security interests while sustaining its role as a stabilizing power in West Asia.

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    The WTO, established in 1995 under Uruguay Round of the GATT, was designed to promote rules-based multilateral trade and ensure that global trade flows as smoothly, predictably and freely.

    Major Challenges Facing the WTO

    Since 2019, WTO’s dispute settlement system has been defunct due to US blocking judge appointments.

    Deadlock over Doha Development Agenda and Agreement on Agriculture

    Opposition of developing countries for ‘New Issues’

    WTO rules lag behind in Digital Trade & E-commerce

    Dispute over “Developing Country” Status – The US opposes self-declared developing status at WTO, arguing that countries like India and China should be treated as developed.

    Mega-regional trade pacts like the TPP (Trans-Pacific Partnership), bypassing WTO norms.

    Proposals by India in the High-Level Mini-Ministerial Meeting

    Revival of the WTO Dispute Settlement System to maintain WTO’s credibility and rule-based order.

    Institutional & Negotiation Reforms

    Move from consensus-only decision-making to hybrid or majority-based models for efficiency.

    Enhance voice of developing nations in agenda-setting and committee representation

    Reform of Special and Differential Treatment – Retain S&DT as a core principle ensuring policy space for developing countries.

    Agricultural Trade Reform

    Rationalize domestic support and export subsidies in developed nations (EU, US).

    Permanent solutions for public food grain stockholding programs

    Ensure food security exemptions are protected under Article 18.4 of AoA.

    Tackling Non-Tariff Barriers (NTBs) by ensuring transparency, science-based standards, and non-discriminatory application of NTBs.

    Addressing Distortions by Non-Market Economies – Eg- China’s export quotas on rare earths

    Develop balanced rules on data localization, digital taxation, and cross-border flows to prevent dominance of Big Tech

    Prevent misuse of green trade barriers as disguised protectionism. Eg- EU’s Carbon Border Adjustment Mechanism

    Permanent WTO Reform Council to propose systemic reforms every five years.

    India must lead the Global South coalition to ensure reforms are inclusive, equitable, and development-centric.

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    The Citizen’s Charter, introduced in India in 1997 (DARPG) following the UK model, aims to make public services transparent, accountable, and citizen-centric by clearly defining service standards, timelines, and grievance redressal mechanisms.

    Role in Ensuring Transparency and Accountability

    Defines Service Standards – Eg- Passport Seva Kendra specifies delivery within 3 working days for Tatkal applications.

    Enhances Administrative Transparency – Makes procedures, responsibilities, and timelines public, reducing scope for arbitrariness and discretion.

    Promotes Accountability of Officials – Identifies responsible officers for each service and grievance redressal, ensuring answerability for delays or failures.

    Empowers Citizens to demand better service delivery, question inefficiencies, and seek grievance redressal through defined channels.

    Builds mutual expectations between government and citizens, enhancing trust in public institutions.

    Provides a benchmark for assessing departmental efficiency and monitoring service outcomes through periodic audits.

    Promotes feedback-based improvement by institutionalizing citizen input in service reforms.

    Limitations of Citizen’s Charter

    Charters are non-statutory and lack penal provisions for non-compliance, reducing accountability.

    Top Down Approach – Charters are formulated by bureaucrats without citizen consultation, making them non-representative and unrealistic.

    Low Public Awareness – Eg- only 36% of users knew of service standards (NITI Aayog, 2023).

    Weak Grievance Redressal – Absence of clear escalation mechanisms leads to ineffective resolution and loss of citizen confidence.

    Bureaucratic Resistance – Many departments treat the Charter as a procedural formality rather than a reform instrument.

    Poor Review and Monitoring – Charters are rarely updated or evaluated; lack of performance metrics weakens impact.

    Fragmented Implementation – No uniform structure or standards across ministries and states, causing inconsistency in service quality.

    Accessibility issues due to absence of regional language versions

    Measures for Greater Effectiveness

    Enact a Citizen’s Charter Act with penalties for non-compliance, similar to Right to Public Services Acts in MP and Bihar.

    Integration with Grievance Systems – Link Charters with CPGRAMS and State Service Guarantee Acts for real-time grievance tracking.

    Regular Review and Evaluation – Institutionalize annual audits and third-party evaluations to assess compliance and update service commitments.

    Conduct public awareness campaigns and train officials under the Sevottam Framework for citizen-oriented delivery.

    Technological Integration – Promote digital dashboards, online service tracking, and data-based performance monitoring.

    Performance Incentives and Accountability – Introduce reward mechanisms for compliant departments and penalties for persistent failures.

    By aligning it with the 2nd ARC recommendations, it can evolve from a symbolic commitment to a practical framework for responsive, transparent, and citizen-centric governance.

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    73rd and 74th CAA are the embodiment of grass-root democracy and democratic decentralization in India. They are inspired by Gandhiji’s concept of “Oceanic Circles of Power” and “Swaraj”.

    Importance of PRIs

    Rajni Kothari – Described local bodies as “schools of democracy” where political awareness and participation are cultivated at the grassroots level.

    Democratic Decentralization – Eg- Kerala’s People’s Plan Campaign grants local bodies control over 40% of the state’s plan budget.

    Capacity Building– Training programs for PRI members. Eg- e-Panchayat initiative

    Efficient Local Service Delivery- Addresses local needs in sanitation, drinking water, roads, housing, and education. Eg- Hiware Bazar Model of watershed development.

    Transparency– Direct accountability to local constituents. Eg- Rajasthan’s Social Audit Mechanism

    Implementation of Schemes, ensuring that benefits reach the grassroots. Eg- MGNREGA.

    Financial Autonomy– PRIs have the power to levy taxes and mobilize resources, which helps them fund and manage local development projects.

    Conflict Resolution- Reports indicate a 30% reduction in petty disputes reaching district courts due to effective Panchayat mediation.

    Inclusivity– Reserving seats for women, Scheduled Castes, and Scheduled Tribes. Eg- Women’s Representation at 46.44%

    Challenges

    “PRIs exist as over-structured but underpowered organisations.” (2nd ARC)

    No decentralisation of power, rather decentralisation of corruption – Mani Shankar Iyer Committee

    Dependence on higher tiers- Around 95% of Panchayat funds come from Central/State transfers, limiting fiscal autonomy.

    Limited own-source revenue- Poor tax collection efficiency (>1% own tax).

    Barriers to Local Taxation- Freebie culture and fear of losing popularity discourage local taxation.

    Incomplete devolution- less than 20% of States have transferred all 29 subjects under 11th Schedule (MoPR, 2022). (​​overall Panchayat Devolution Index is only 43.89% (2021-22))

    Centralised Welfare via Cash Transfers – The welfare state now relies on DBT through JAM, bypassing panchayats and reducing local accountability and participatory governance

    Shortage of staff- Average 0.67 Panchayat Secretaries per Gram Panchayat, as low as 0.33 in Uttar Pradesh.

    Weak Gram Sabhas- Low participation, elite domination, and token meetings.

    Gender and social barriers leading to proxy control. (Sarpanch Pati)

    Alternate Sources of Panchayat Financing (Beyond Government Grants)

    Own Tax Revenues- Property/House tax, Profession tax, Market fees, and Entertainment tax.

    Non-Tax Revenues- Rent from panchayat buildings, water usage fees, license fees, and user charges for services.

    Public-Private Partnerships (PPPs) for solid waste management, renewable energy, or tourism projects. Eg- waste-to-energy projects.

    Community Contributions- Voluntary labor (Shramdaan), local donations, and community funds for infrastructure.

    Borrowings and Bonds- Soft loans from NABARD and Rural Infrastructure Development Fund (RIDF) for rural projects.

    Corporate Social Responsibility (CSR)- Eg- Tata Steel CSR projects in Jharkhand villages for drinking water and sanitation.

    Using funds from MGNREGA, 15th FC grants for rural infrastructure development.

    Way Forward

    Strengthen State Finance Commissions (SFCs) with mandatory action on their recommendations.

    Manishankar Aiyar Committee recommendations – Adopt activity mapping for clear delineation of 3Fs – Funds, Functions, Functionaries.

    Flexible Funding Norms under CSS

    To realise the vision of “Gram Uday se Bharat Uday”, India needs second-generation Panchayati Raj reforms

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    “The true measure of a democracy is how it treats its weakest members.” – Mahatma Gandhi

    The Indian state has established a network of statutory and constitutional commissions to uphold equality, dignity, and justice as envisioned in Articles 14-17, 21, and 46 of the Constitution.

    Problems of Overlapping Jurisdiction

    Ambiguity in Mandate – Example- Hathras case – NCSC & NCW both intervened.

    Parallel Investigations – Example- Bilkis Bano case – NHRC, NCW, and NCM all investigated.

    Lack of Coordination leads to contradictory recommendations.

    Confusion in Accountability – Citizens unclear which body to approach for redressal.

    Problems of Duplication of Functions

    Repetitive Reporting

    Fragmented Data Systems – Separate data collection on similar issues creates inconsistency.

    Resource Wastage – Each commission maintains its own secretariat, inquiry cells, and legal divisions, leading to inefficiency.

    Overlapping Policy Recommendations, causing delay and duplication.

    Merging of all commissions into an umbrella HR Commission

    Arguments in Favour

    Uniformity- Brings consistency in standards, inquiry, and reporting across all vulnerable groups.

    Resource Efficiency- Prevents duplication of staff, budgets, and administrative infrastructure.

    Accountability- Establishes a single point of responsibility for human rights protection.

    Removes confusion and brings Clarity of Jurisdiction

    Intersectional Approach- Enables holistic handling of overlapping vulnerabilities like caste, gender, and religion.

    Global Best Practice- Mirrors models in Canada, Australia, and New Zealand with unified human rights bodies.

    Data Integration- Allows centralized data collection and analysis for evidence-based policymaking.

    Policy Coherence- Facilitates unified engagement with ministries and state bodies for coordinated action.

    Arguments Against

    Specialization Loss- Dilutes expertise of domain-specific bodies like NCW, NCSC, and NCPCR.

    Constitutional Violation- Conflicts with Articles 338, 338A, and 338B granting separate constitutional status.

    Administrative Overload- A single mega body may become slow, inefficient, and unresponsive.

    Representation Loss- Marginalized groups lose dedicated institutional voices for advocacy.

    Risk of Bureaucratization of commission

    Symbolic Dilution- Weakens the government’s visible commitment to vulnerable sections.

    Better Coordination Alternative- Inter-commission coordination can address overlaps without structural merger.

    Way Forward

    Create an Inter-Commission Coordination Council chaired by NHRC to avoid overlaps.

    Establish a common digital platform for complaints, investigations, and monitoring.

    Joint Investigations and Reports in intersectional cases (e.g., caste + gender).

    Amend relevant Acts to clearly demarcate jurisdiction.

    Simplify public interface through a single online grievance portal linked to all commissions.

    The 3R approach of Reform, Reorientation and Restructuring can enhance functioning of commissions as an effective Bulwark Of Democracy in India.

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    Despite being the largest foodgrain producer (73 million tonnes of buffer stock) and running the world’s largest food security programs (NFSA), India ranks 102nd out of 123 countries in the Global Hunger Index 2025.

    Focus on Lack of Availability of Food

    NFSA, 2013: 5 kg subsidized food grains/month to 67% of India’s population.

    PM Garib Kalyan Anna Yojana: Extended free food grain distribution during and post-COVID.

    ICDS and Mid-Day Meal Scheme: Supply meals to pregnant women, lactating mothers, and children to combat calorie deficiency.

    Persistent Malnutrition: NFHS-5 shows stunting (32.9%), wasting (18.7%), and underweight (32%) children despite extensive food programs.

    High Anemia Levels: 57% of women and 67% of children are anemic – a form of hidden hunger linked to poor micronutrient intake, not lack of food.

    SOFI 2025: 12% of Indians remain undernourished despite record food production.

    Global Hunger Index 2025: score of 25.8 (Serious).

    Ineffective Human Development Policies in India

    Health System Deficiencies: Poor healthcare access, high maternal mortality, inadequate disease prevention, and sanitation deficits worsen malnutrition.

    Education Gaps: Lack of nutrition awareness, hygiene education, and poor child care practices perpetuate undernutrition despite food access.

    Feminization of poverty: Low female labor participation, limited autonomy, and poor maternal nutrition cause intergenerational hunger.

    A large share of the workforce (90%) remains in low-paid informal jobs, restricting food affordability and living standards.

    Limited Funding – Public spending on health (~1.9% of GDP) and education (~2.9% of GDP) remains below global averages, weakening capability-building.

    Income Poverty and Inequality: The poorest 10% spend over 60% of income on food, leaving little for health or education.

    Jobless Growth: Despite 7%+ GDP growth, unemployment among youth remains 17.3% (PLFS 2022-23).

    Steps Taken to Address the Broader Dimensions of Hunger

    Saksham Anganwadi and Poshan 2.0: Modernizes ICDS infrastructure and promotes dietary diversity through fortified foods.

    Ayushman Bharat and PM Jan Arogya Yojana: insurance coverage to 50Cr population

    Swachh Bharat Mission & Jal Jeevan Mission: Improve sanitation and safe water, reducing nutrient loss due to infections.

    MGNREGA, NRLM, and PM-KISAN: Provide livelihood and income support to improve household food affordability.

    Women Empowerment Initiatives: Mobilizing over 1 crore women into 9.96 lakh Self-Help Groups (SHGs) under NULM

    Millets Promotion under “Shree Anna” – Integration of nutri-cereals (e.g. ragi, bajra, jowar) into PDS, ICDS and PM POSHAN

    Way Forward

    Promote diet diversity (millets, pulses, vegetables) through PDS reform.

    Increase public investment in health (2.5%) and education (6%) to strengthen human capital.

    Adopt data-driven local interventions under Aspirational Districts Programme to target high-burden regions.

    Adopt Brazil’s Bolsa Família conditional cash transfer scheme

    Scale State level best practices like TN’s inclusion of Eggs in MDM

    India’s vision of ‘Sabka Saath, Sabka Vikas’ demands inclusive nutrition as the foundation for sustainable human development.

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    The governance of Delhi has remained contentious due to its special constitutional status under Article 239AA. The Supreme Court’s July 2018 Constitution Bench judgment in Government of NCT of Delhi v. Union of India sought to clarify the powers of the Lt. Governor (LG) vis-à-vis the elected government.

    Key Features of the 2018 Judgment

    Aid and Advice– LG is bound by the aid and advice of the Council of Ministers, except in matters of land, police, and public order.

    No Independent Power– LG cannot act independently; he is not an obstructionist authority.

    In case of conflict, LG should refer matter to President.

    SC concluded (following Balakrishnan Committee) that Delhi is not a state.

    Can the 2018 SC Judgment Settle the Tussle?

    Yes – Scope for Settlement

    Judicial clarity – LG bound by aid and advice except land, police, public order.

    Strengthens democracy – Elected govt. empowered.

    Curtails obstruction – LG cannot act independently or stall routine decisions.

    Constitutional morality – Promotes cooperative federalism, mutual trust.

    Checks arbitrariness – Limits misuse of “difference of opinion” clause.

    Encourages dialogue – Pushes for institutional maturity and coordination.

    No – Tussle Likely to Persist

    Ambiguity remains – Article 239AA(4) still allows LG to escalate disputes.

    Key exclusions – Land, police, public order under Centre control.

    Services issue – Left unresolved in 2018, led to fresh disputes till 2023.

    Party rivalry – Conflict driven by politics, not just legal text.

    Structural limits – Delhi lacks full statehood, unlike other states.

    Comparative experience – Capitals like Washington D.C. also face similar tussles.

    Way Forward

    Legislative clarity on Article 239AA to reduce ambiguity.

    Institutionalised cooperative mechanisms such as inter-governmental councils for Delhi.

    Judicial restraint and constitutional morality from all actors.

    Political maturity to balance Union concerns with the democratic mandate of Delhi’s citizens.

    “Federalism is not a monolith; it is a dialogue between self-rule and shared rule.” Both Union & States are creatures of the Constitution

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