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Subject: Economics

  • Distinguish between the Human Development Index (HDI) and Inequality-adjusted Human Development Index (IHDI) with special reference to India. Why is the IHDI considered a better indicator of inclusive growth?

    The Human Development Index (HDI), introduced by UNDP in 1990, measures a country’s progress in terms of health, education, and income. The Inequality-adjusted Human Development Index (IHDI), introduced in 2010, refines HDI by factoring in inequality of distribution of these achievements.

    India’s Human Development Performance

    Human Development Index (HDI)

    Rank improved from out of 193 countries.

    Since 1990, HDI improved by 53%, outpacing global and South Asian averages.

    Inequality-adjusted Human Development Index (IHDI)

    India suffers a 30.7% loss due to inequality.

    Poorest 40% hold only 20.2% of income, while the richest 10% hold 25.5%.

    Why IHDI is a Better Indicator of Inclusive Growth

    Accounts for Inequality – Unlike HDI, IHDI reduces scores based on income, education, and health disparities, showing the real distribution of gains.

    Closer to Ground Reality – Reflects what people actually experience, not just national averages. For India, 30.7% loss of human development due to inequality.

    Reveals Hidden Gaps – Exposes divides across region, caste, class, and gender that HDI alone masks. Eg- gender gap in Labour Force Participation Rate

    Guides Policy Better – Eg- targeted schemes like PM Poshan Abhiyan or Eklavya Model Schools

    Captures Inter-generational Equity – By highlighting disparities, it stresses need for equal opportunities for long-term human development.

    Comparative Value – Countries with similar HDI can differ widely in IHDI, revealing which societies are more inclusive.

    Supports SDGs – Aligns with SDG 10 (Reduce Inequality) and SDG 1 (No Poverty) by showing inequality-adjusted outcomes.

    As Amartya Sen observed, “Development is about expanding freedoms.” HDI shows progress, but IHDI shows whether that progress is fairly shared.

    Government Budgeting

  • Discuss the rationale of the Production Linked Incentive (PLI) scheme. What are its achievements? In what way can the functioning and outcomes of the scheme be improved?

    The PLI scheme, launched in 2020, covers 14 key sectors and provides direct incentives on incremental sales of goods manufactured in India. It aims to raise manufacturing’s contribution to 25% of GDP.

    Rationale of the PLI Scheme

    Boost domestic manufacturing by overcoming the historic 16-17% manufacturing share in GDP.

    Reduce import dependence, especially in critical sectors like electronics, APIs, and solar modules.

    Integrate India into global value chains (GVCs) by attracting global manufacturers.

    Encourage scale, competitiveness, and technology transfer through incentive-based production expansion.

    Generate employment in labour-intensive and high-potential sectors.

    Promote sunrise industries (EVs, semiconductors, telecom, batteries) to position India in future technologies.

    Enhance Exports – Position India as a competitive player in global value chains.

    Achievements So Far

    achieved by PLI beneficiaries (mid-2025).

    Over 12 lakh direct and indirect jobs created.

    India became the 2nd-largest mobile producer, with 97% domestically made.

    Third-largest pharmaceutical producer globally. 50% of total pharma production is exported.

    Automotive Sector – Boosted EV components, hydrogen technologies, and high-tech auto manufacturing.

    Achieved 60% import substitution in telecom equipment.

    Issues

    Falling Manufacturing Share in GDP (from 15.4% to 14.3%) since PLI launch.

    >10% of allocated funds disbursed.

    Delays in Incentive Disbursement

    94% of incentives to pharmaceuticals and mobile-phone manufacturing

    Limited Achievement of Targets only 37% of scheme’s goal.

    Exclusion of MSMEs due to high eligibility thresholds

    Way Forward

    Faster disbursal of incentives to reduce uncertainty and improve industry cash flows.

    Move from scale-based incentives to design, R&D, and innovation incentives (chips, batteries).

    Enhance MSME participation through cluster-based PLI, separate PLI window for MSMEs

    Rationalise value-addition norms – realistic localisation targets.

    Improve coordination between Centre and States to reduce procedural delays.

    Strengthen monitoring, transparency, and impact evaluation through real-time dashboards

    Couple PLI with ease-of-doing-business reforms and plug-and-play infrastructure

    As PM Modi stated, “Aatmanirbharta is the cornerstone of building a Viksit Bharat.” Strengthening PLI can help realise this objective.

  • Match List-I with List-II and select the correct answer using the codes given below the lists

    Match List-I with List-II and select the correct answer using the codes given below the lists:
    List-I (Person) – List-II (Area).
    List-I(Person) List-II(Area)

    A. Sabyasachi Mukherjee 1. Microfinance loans

    B. Aniruddha Bahal 2. Pharmaceuticals

    C. Vikram Akula 3. Fashion designing

    D. Yusuf Hamied 4. Investigative journalism

    A B C D A B C D
    (a) 1 2 3 4 (b) 3 4 1 2
    (c) 1 4 3 2 (d) 3 2 1 4

  • Consider the following statements

    Consider the following statements:
    1. The first telegraph line in India was laid between Kolkata (formerly Calcutta) and Diamond Harbour.
    2. The first Export Processing Zone in India was set up in Kandla.
    Which of the statements given above is/are correct ?

  • Consider the following statements

    Consider the following statements :
    1. Infant mortality rate takes into account the death of infants within a month after birth.
    2. Infant mortality rate is the number of infant deaths in a particular year per 100 live births during that year.
    Which of the above statements is/are correct ?

  • Consider the following pairs

    Consider the following pairs :
    1. ABN Amro Bank :USA
    2. Barclays Bank :UK
    3. Kookmin Bank :Japan
    Which of the above pairs is/are correctly matched ?

  • Consider the following

    Consider the following:
    1. Fringe Benefit Tax
    2. Interest Tax
    3. Securities Transaction Tax
    Which of the above is/are Direct Tax/Taxes ?

  • Consider the following statements

    Consider the following statements :
    1. The Baglihar Power Project had been constructed within the parameters of the Indus Water Treaty.
    2. The project was completely built by the Union Government with loans from Japan and the World Bank.
    Which of the statements given above is/are correct?

  • With reference to India, consider the following Statements

    With reference to India, consider the following Statements:
    1. The Wholesale Price Index (WPI) in India is available on a monthly basis only
    2. As compared to Consumer Price Index for Industrial Workers (CPI (IW)), the WPI gives less weight to food articles.
    Which of the statements given above is/are correct?

  • Consider the following statements

    Consider the following statements:
    The functions of commercial banks in India include
    1. Purchase and sale of shares and securities on behalf of customers
    2. Acting as executors and trustees of wills.
    Which of the statements given above is/are correct?