GS -3 Mains 2019-20 WriteToBeIAS.com CA RAHUL KUMAR …

GS -3 Mains 2019-20

Course Broucher

WriteToBeIAS.com CA RAHUL KUMAR

9045716803

www.writetobeias.com Email : [email protected] 011-41561002 Page 1 Course Broucher for GS 3 Mains 2019

LARGEST GS MAINS PAPER (I.e, PAPER 3) SIMPLIFIED by

CA Rahul Kumar & Team

“Get 140+ Marks in GS 3 with minimum efforts”

Dear Aspirants,

We are launching the most demanded subject i.e, GS PAPER 3 covering “ECONOMIC DEVELOPMENT,

AGRICULTURE, ENVIRONMENT, S&T, INTERNAL SECURITY” for Mains 2019-2020

MUST WATCH VIDEO - GS 3 IAS MAINS BEST STRATEGY

https://www.youtube.com/watch?v=FqZWFpUsamc

WHAT WILL BE THE DELIVERABLES ?

Weekly four to five Online recorded Video classes on

your personal computer dashboard and Android and

Iphone app

One to one doubt discussion with faculty over phone

/whatsapp (Pre defined Regular Time slots will be given

for one to one and conference calls). Separate doubt

sessions will also be conducted live for all

Pre-defined topic wise lecture plan

Complete, relevant and effective printed & soft copy

study material

Sufficient handwritten class notes making

Mindmaps

3 practice section wise tests and one comprehensive test

paper at par with UPSC level

Previous year question analysis and structure making

Additional sessions may be held, if needed

APPROACH DURING CLASSROOM

Question Answer Approach

Maximum discussion and negligible dictation

Conceptual Interlinking of topics

Answer to most probable Analytical topics for mains exam

From basic to applied level for every topic

From conventional till recent updates on the topic

Available at the end of this broucher

Sample Video Youtube links

200 + Topics list from Macro

economy & Agriculture

Development (Page 11 onwards)

Sample Important practice

Questions for Mains 2019 &

Mains 2020 (page 12 onwards)

Sample printed Study Material

(Page 11 to 25)

Sample handwritten notes from

students of earlier batch (page

26 onwards)

Few Mindmaps

http://www.writetobeias.com/

mailto:[email protected]


GS -3 Mains 2019-20

Course Broucher


9045716803


Daily revision of previous class for long time retention

Suitable attention to all areas (Both economy and Non economy) of syllabus considering exam

requirements & weight

No need to refer any other reference book

Classroom content will be unique and not just a compilation of common available resources

You will remember lots of things from the lecture itself and will be able to deliver in the exam

Those students who have mismanaged their preparation in earlier years by thinking that GS 3 can be

covered by just reading current affairs or joining some GS test series will find our classroom suitable to

develop good perspective on every topic.

Note – Initially the classes will be given in online mode only and later on we may also give in offline mode

(only in Delhi). But our initial promise is online only.

Note – Date wise Topic wise lecture Plan will be available for you once you get admission into the

course

SOURCES TO COVER:

Kaushik Basu, NCERTs , Uma Kapila, Mishra & Puri

Updated current affairs since the last 3 years ( from the Hindu Indian Express, Business Standard and

PIB)

Coverage of 2 years economic survey and budget, Yojna & Kurukshetra

Economic Survey 2019 and Budget will be covered as and when they are released

The Hindu, Indian Express, PIB, Business Standard

Niti Aayog Strategy Document @75

Relevant 2nd Arc reports like Crises management, public order etc

COURSE OPTIONS : We have total two courses

COURSE NAME SPEED COURSE COMPLETE COURSE

Deliverables 125+ Most probable topics

from entire syllabus

350+ Topics from entire syllabus

No of lectures

30+ Sessions of 3 Hrs each 70+ Sessions of 3 Hrs each

Time Duration Mid June 2019 to end of July

2019 (you can watch lectures

till 2 months after completion

of the batch)

Mid June 2019 to end of August

2019 ((you can watch lectures till 2

months after completion of the

batch)

Weekly lectures 3 to 4 Sessions a week 4 to 6 sessions a week

Target Aspirants Appearing in Mains 2019 Appearing in Mains 2019 and Mains

2020

(Updations till Mains 2020 will be



GS -3 Mains 2019-20

Course Broucher


9045716803


How to get admission into subscribe to course.

Click on the link given below and pay.

https://www.writetobeias.com/courses-list.php

You will get course option here.

Click on “Enroll Now”

Once you pay, within 24 Hrs you will get your e-learning platform login password separately

You will get recorded lectures and soft copy materials in your dashboard as per lecture plan

Video lectures will also be available on android app/iphone app (Link of such apps we will send to your

after admission)

About the faculty

Mr Rahul Kumar is a Chartered Accountant. He appeared in UPSC Interviews thrice. He has been a faculty

in GS 3 and Economy in famous Delhi civil Institutes for many years. Lecture discussion and study material

will reflect his experience. He has experience of working in government organisations for more than 8 years.

He has deep interest & expertise in Indian economy, agriculture development and environmental & internal

security issues.

You can connect with him over WhatsApp at 9045716803 or drop an email at [email protected]

for any query/clarification regarding the course.

One more team member of equivalent level will be covering few areas like science and technology

provided for mains 2020 students

even after completion of the course)

Relevant for Who want to spend minimum

time yet get maximum

advantage for Mains 2019

only

Both fresher and Senior

players

Who want to be 100% confident in

all areas of GS 3

Both fresher and Senior players

Fee Rs 8260 Rs 14,500

Regarding fee GST @ 18% is included in above

10% discount for all our old students belonging to any

course (send us an email at [email protected]

to get your discount coupon)



https://www.writetobeias.com/courses-list.php



GS -3 Mains 2019-20

Course Broucher


9045716803


Sample Videos links on our YouTube Channel

GS 3 IAS MAINS BEST STRATEGY https://www.youtube.com/watch?v=FqZWFpUsamc

GS 3 ONLINE COURSE DETAILS https://www.youtube.com/watch?v=YqZVES5Hp9M

DISINVESTMENT IN INDIA https://www.youtube.com/watch?v=7SPgnMXC1vY

UNIVERSAL BASIC INCOME https://www.youtube.com/watch?v=PcoxXq4V2PI

Listing of GS 3 topics for Mains 2019

SECTION 1 - MACRO ECONOMY

A. Issues related to growth & development in India

1. Indian Economy in British Era

2. Economy on Eve of Independence : Challenges & Features

3. Recent India's Growth Story

4. Indian Economy – SWOT Analysis

5. India vs China’s economy

6. Late Converger Stall : Economic Survey 2018

7. Green economy

8. NITI Aayog vs Planning commission

9. Financial Inclusion : Evolution since independence

10. Pradhan Mantri Jan-Dhan Yojana (PMJDY)

11. Sustainable Development Goals (SDGs)

12. Savings and Investment rates slowdown : factors and solutions

13. Inflation and Food inflation

B. Public finance & Fiscal Policy 14. Long Term Capital Gains on equity shares

15. Arvind Modi task force on Direct Tax Code

16. How to increase tax to GDP Ratio/Tax base

17. GAAR

18. Base Erosion and Profit Shifting

19. Tax Terrorism in India

20. Flat Income Tax Rate in India

21. Agricultural Income Tax in India

22. GST - Two years Analysis

23. E Way Bill - critical Analysis

24. National Anti-profiteering Authority - Analysis

25. New FRBM Act

26. Fiscal Consolidation

27. States finances & fiscal deficits




https://www.youtube.com/watch?v=YqZVES5Hp9M

https://www.youtube.com/watch?v=7SPgnMXC1vY

https://www.youtube.com/watch?v=PcoxXq4V2PI

GS -3 Mains 2019-20

Course Broucher


9045716803


28. 15th Finance Commission Controversy

29. Outcome Budgeting

30. Gender Budgeting

31. Interim Budget 2019 analysis

32. Public debt management agency

C. Inclusive Growth , Poverty, Employment and Skill development 33. Meaning, Concept and Elements, Challenges & Issues arising from it

34. Balanced Regional Development: Transforming Aspirational Districts

35. Universal Basic Income

36. Demographic Dividend

37. Poverty : Reasons , Government initiatives and solutions for poverty

38. Inequality in India

39. Unemployment : Reasons , Government initiatives and solutions for poverty

40. New problem of under-employment

41. Fixed Term Employment

42. Female Labor force participation rate

43. Informal sector employment trends & challenges

44. Skill India

45. Start up & Stand Up India & Entrepreneurship

D. Investment Models & Resource Mobilization

46. Public Private Partnership : BOT, Hybrid Annuity Model

47. FDI policy in India : Evolution and reforms recently

48. FDI vs FII – Comparative Analysis

49. FPI New Norms

50. Crowdfunding

51. Recent Savings and Investment Trends

52. Municipal Bonds

53. Demonetization – critical analysis

54. Cashless economy

55. Green Finance

56. Masala Bonds

E. Industrial Policy In India : Changes since independence

Evolution of India’s industrial policy

57. Phases of Industrial development - Foundational Phase till 1966 (Mahala Nobis strategy), Phase

of recession and retrogression between 1966-1979, Phase of revival in 1980s till 1990

58. New Economic Policy 1991 and New Industrial policy under the policy of liberalization,

privatization and globalization

59. Third Economic Reforms

60. Roles of private sector and public sector in Indian economy

61. Disinvestments – concept, issues and suggestions

62. Strategic Disinvestments of PSUs

63. Problems of Public Sector

64. Main constraints in the industrial development of India

65. Make in India and NIMZs

66. Industrial Revolution 4.0

67. New E-Commerce Policy



GS -3 Mains 2019-20

Course Broucher


9045716803


68. Labor Reforms – 4 labor code

69. Ease of doing business

70. MSMEs – Challenges and Solutions

71. National Financial Regulatory Authority (NFRA)

72. New IPR Policy, 2016

73. PM Mudra Yojana

74. Special Economic Zones (SEZs)

75. Shell Companies

76. Electronics Industry in India

77. Tourism Sector

78. Pharmaceutical Sector in India

79. Handloom industry (Yojana)

80. Textile industry

81. Footwear industry

82. Defence manufacturing in India

F) Infrastructure – Features, Types,

83. Telecom Sector – issues and challenges ; Draft National Digital Communications Policy – 2018

84. Urban Development, Urbanization 2.0,

85. Smart Cities, “SAHI” approach to urban mobility/ urban transport

86. Rural Infrastructure in India

87. Infrastructure financing

88. Digital India

89. Logistics Sector

90. Minerals licensing and exploration

Railways :

91. Issues in Railway Sector

92. Freight segment : Dedicated Freight Corridor

93. Rail Safety

94. Railway Privatization

95. High Speed Rail Project, National Rail Plan 2030, Various Committees

96. New Metro Policy 2017

Road Sector

97. Road Transport – issues and challenges

98. Bharatmala

99. National Electric Mobility Mission Plan 2020

100. National Auto Policy 2018

Water Transport –

101. Jal Marg Vikas Project (Inland Waterways)

102. Sagar Mala Project

103. Shipping sector

104. Costal shipping

105. Costal employment Zones

106. RO-RO Service

107. Dry ports

Air Transport :

108. Civil Aviation Sector – Issues and Solutions

109. UDAN Scheme 2 & 3



GS -3 Mains 2019-20

Course Broucher


9045716803


110. Civil aviation Policy 2016

111. Air India issue

112. Multi Modal Logistics Park

Energy Security

113. Status, Policies, Challenges

114. Draft National Energy Policy 2017

115. National Biofuel Policy 2018

116. Energy efficiency (STRATEGY)

Coal & Power Sector

117. Power Sector - issues and Policies

118. DISCOM Reforms – UDAY Scheme

119. Coal Sector – issues and analysis

120. Privatisation of coal mining sector

121. Rural electrification : DDU Gram Jyoti Yojna, Saubhagya Scheme, KUSUM Yojana

122. Nuclear energy programme

Oil and Gas Sector

123. New Hydrocarbon and Exploration Policy 2016

124. Strategic oil reserves

125. Natural Gas – issues and suggestions

126. Affordable Housing for All

127. Real Estate Sector : RERA Act, 2017, Real Estate Investment trust (REIT)

128. Rural Development : Bharat Nirman, Smart Villages, PURA Scheme

Renewable Energy : Policies and Challenges

129. Solar Energy, Solar Parks

130. National Solar Wind Hybrid Policy

131. International Solar Alliance

132. Shale Gas

133. Methanol Economy

G. Money & Banking 134. NPA or Twin Balance Sheet crises – Reasons, Govt initiatives and Suggestions

135. Project SHASHAKT analysis, Willful Defaulters, ICA, PCR, 12 Feb Circular

136. Banks Recapitalization : good or bad

137. Banking Reforms : Mission Indradhanush

138. Banks merger : good or bad

139. RBI vs Government controversy

140. Banks privatization : good or bad

141. Public Sector Asset Rehabilitation Agency (PARA) and Bad Bank

142. The Fugitive Economic Offenders Act, 2018

143. Insolvency and Bankruptcy Code, 2016

144. India’s payments banks - Analysis

145. Bitcoins/Cryptocurrency

146. IL&FS Crisis and NBFC Sector

147. PNB Banking Fraud : LOU and SWIFT

148. The Banning of Unregulated Deposit Schemes Bill, 2018

H) External Sector

149. Globalization & associated issues

150. Trade War & Protectionism

151. Currency War



GS -3 Mains 2019-20

Course Broucher


9045716803


152. Rupee exchange rate fluctuations

153. WTO New issues – Delhi meet

154. India‘s Export Promotion initiative

155. General system of preferences (GPS) issue

156. MFN status analysis

SECTION 2 : AGRICULTURE

1. Agriculture during planning process

2. Role of agriculture in Indian Economy

3. Increasing agriculture productivity & Modernizing Agriculture

4. Doubling Farmer's Income, Ashik Dalwai Committee

5. Farmer's Suicides issue

6. Loan Waivers

7. Toxic Farming

8. Organic Farming and Zero Budget Natural Farming

9. Evergreen Revolution

10. Major crops cropping patterns in various parts of the country,

11. National Year of Millets 2018

12. Different types of irrigation and irrigation systems;

13. PM Krishi Sinchayi Yojana Analysis

14. PPP in Micro Irrigation , Soil Health Card Scheme

15. Agricultural Credit – Banks/ RRB/ NABARD/ KCC & other angles

16. Agricultural Finance – Features/ Criteria & Need, Sources/ Problems & Measures

17. Agriculture – Crop Insurance in India – Features & Schemes

18. PM Fasal Bima Yojna

19. E-technology in the aid of farmers

20. Storage, transport and marketing of agricultural produce and issues and related constraints

21. APMC and E-NAM,

22. Agri Export Policy 2018

23. Contract farming

24. Sugarcane pricing

25. Model Agricultural Produce and Livestock Marketing Act 2017

26. Technology missions

27. Economics of animal-rearing – importance, challenges

28. Dairy Sector

29. Poultry Sector

30. Silk Sector

31. National Policy on Marine Fisheries

32. Fisheries Sector

33. Sweet Revolution

34. Pink revolution

35. Livestock sector and Rastriya Gokul Mission & Rashtriya Kamdhenu Aayog

36. Agri R&D

37. Agricultural extension (Krishi Vigyan Kendras)

38. Issues related to direct and indirect farm subsidies (Power, Irrigation, Price, Credit subsidies)

39. PM KISAN Scheme – Critical analysis

40. Fertilizer sector reforms : DBT etc

41. Minimum support prices (PM AASHA Yojana & Price deficiency payment system



GS -3 Mains 2019-20

Course Broucher


9045716803


42. Public Distribution System- objectives, functioning, limitations, revamping;

43. PDS and Aadhar, National Food Security Act,2013

44. Issues of buffer stocks

45. Global Hunger Index and Nutritional Security; POSHAN Abhiyaan

46. Food processing and related industries in India- scope and significance

47. Upstream and downstream requirements, supply chain management.

48. PM Kisan Sampada Yojna

49. Land Reforms in India – Objectives, Phases, Success and failures

50. Land leasing law,2016

51. National Land records Modernization Program

52. Land acquisition Act 2013

53. Land Bank

54. Draft Pesticides Management Bill 2017

55. GM Crops and GM Mustard

56. Sustainable Agriculture

57. Operation Greens

58. GOBARDHAN Scheme

59. Agri Future Markets

60. Sugar Industry

61. Farmer Producer organizations

62. Draft Pesticide Management Bill 2017

63. Agriculture Futures

64. National Bamboo Mission

65. Climate Smart Agriculture

66. Feminization of Agriculture

The above list will further be updated with topics emerging between June 2019 to September

2019. So be in touch…

TOPICS LIST FOR BELOW GIVEN AREAS WILL ALSO BE GIVEN ONCE

YOU JOIN COURSE

SECTION 3 : ENVIRONMENT

SECTION 4 : INTERNAL SECURITY

SECTION 5 : SCIENCE AND TECHNOLOGY

30 SAMPLE PRACTICE QUESTIONS FOR MAINS 2019 & 2020

All such and 200 more questions will be discussed in detail in the classroom

MACRO ECONOMY :

1. There is a clear acknowledgement that Special Economic Zones (SEZs) are a tool of industrial

development, manufacturing and exports. Recognizing this potential, the whole instrumentality of



GS -3 Mains 2019-20

Course Broucher


9045716803


SEZs requires augmentation. Discuss the issues plaguing the success of SEZs with respect to

taxation, governing laws and administration

2. While we found India’s demographic dividend, we ignore the dropping rates of employability. What

are we missing while doing so? Where will the jobs that India desperately needs come from?

Explain.

3. Industrial growth rate has lagged behind in the overall growth of Gross-Domestic-Product(GDP) in

the post-reform period” Give reasons. How far the recent changes in Industrial Policy are capable of

increasing the industrial growth rate?

4. In a globalised world, intellectual property rights assume significance and are a source of litigation.

Broadly discuss various advantages that National IPR Policy,2016 can offer and what are the major

obstacles that are being faced on the path of its success.

5. ‘Severe underemployment’ and not unemployment is a more serious problem in India. Discuss with

logical arguments

6. Inequality in India poses a multitude of threats. What are the causes of Inequality in India. Explain

various adverse impacts of the inequality. Give some suggestions to overcome this problem.

7. Normally countries shift from agriculture to industry and then later to services, but India shifted

directly from agriculture to services. What are the reasons for the huge growth of services vis-a-vis

industry in the country? Can India become a developed country without a strong industrial base?

AGRICULTURE

8. Establish the relationship between land reform, agriculture productivity and elimination of poverty in

Indian Economy. Discussion the difficulty in designing and implementation of the agriculture

friendly land reforms in India.

9. What are the reasons for poor acceptance of Aadhar based PDS System? How the Aadhar based PDS

System will be helpful for effective distribution of cheaper foodgrains?

10. Among several factors for Agriculture sectors’ potential growth, improving agricultural productivity

is the most effective one. Do you agree? What are the other factors available for growth potential of

agriculture sector ?

11. “Apart from the agriculture sector, there needs to be increased focus on agriculture-allied sectors to

realize the goal of doubling farmers’ income.” Examine. What steps has the Government taken to

promote allied activities in this sector?

12. ‘The fertilizer industry has been instrumental in making India self-sufficient in food and agricultural

produce but at the same time it is frequently criticized for straining country’s fiscal deficit’. In light

of this statement, do you think that the recent reforms could help in reviving the sector? Examine

with respect to

the stakeholders involved.

13. Food management and distribution includes the entire set of activities from farm to fork. There are a

variety of challenges in this process. Discuss this statement. What are the recent government

initiatives in this context. Discuss.

ENVIRONMENT



GS -3 Mains 2019-20

Course Broucher


9045716803


1. The Namami Gange and National mission for clean Ganga (NMCG) programmes and causes of

mixed results from the previous schemes. What quantum leaps can help preserve the river Ganga

better than incremental inputs?

2. There is also a point of view that Environmental impact assessment (EIA) studies in India not only

impeded the progress of various development projects but also have been ineffective in achieving its

intended objectives. Critically examine.

3. “When it comes to the debate of economic development versus environment, there is an inherent

tendency among developing countries to tilt towards economic development”. Discuss the statement

in the context of India's ranking in Environmental Performance Index, 2018.

4. India was one of the birthplaces of the Green Revolution that helped to bring food sufficiency, but

now faces a new set of challenges due to climate change. Illustrate with examples the impact of

climate change in Indian agriculture and suggest solutions.

DISASTER MANAGEMENT

5. Describe various measures taken in India for Disaster Risk Reduction (DRR) before and after signing

‘Sendai Framework for DRR (2015-2030)’. How is this framework different from ‘Hyogo

Framework for Action, 2005’? (250 Words, 15 Marks)

6. Drought has been recognised as a disaster in view of its party expense, temporal duration, slow onset

and lasting effect on various vulnerable sections. With a focus on the September 2010 guidelines

from the National disaster management authority, discuss the mechanism for preparedness to deal

with the El Nino and La Nina fallouts in India.

INTERNAL SECURITY

7. The scourge of “Naxalism” is a grave challenge to national security. What are the major reasons

behind its spread in Urban Areas of India? What solutions do you suggest to curb this growing

menace?

8. Data security has assumed significant importance in the digitized world due to rising cyber-crimes.

The Justice B. N. Srikrishna Committee Report addresses issues related to data security. What, in

your view, are the strengths and weaknesses of the Report relating to protection of personal data in

cyber space? (250 Words, 15 Marks

9. India’s proximity to two of the world’s biggest illicit opium-growing states has enhanced her internal

security concerns. Explain the linkages between drug trafficking and other illicit activities such as

gunrunning, money laundering and human trafficking. What countermeasures should be taken to

prevent the same? (250 Words, 15 Marks)

10. Violation of data privacy is emerging as a serious problem in India. Giving suitable examples,

analyse various challenges in ensuring data privacy in India. Describe various available mechanisms

and techniques at present to ensure the data privacy in india.

11. Border management is a complex task due to difficult terrain and hostile relations with some

countries. Elucidate the challenges and strategies for effective border management.

12. BCIM Corridor is a double edged sword and benefits accruing to it could be counter balanced by the

challenges it can pose. Do you agree with the statement? Critically examine

13. Illegal Immigration should be given priority in the foreign policy as it is not only a political issue but

also a security issue. Critically analyse the statement and list out measures to deal with the problem.



GS -3 Mains 2019-20

Course Broucher


9045716803


14. Coastal security is an indispensable part of our National Security. In light of this statement,

enumerate the steps taken to strengthen coastal security in India. Also examine the shortcomings that

continue to undermine coastal security, and suggest remedial measures. (15 marks)

S&T

15. Stem cell therapy is gaining popularity in India to treat a wide variety of medical conditions

including Leukaemia, Thalassemia, damaged cornea and several burns. Describe briefly what stem

cell therapy is and what advantages it has over other treatments?

16. Scientific research in Indian universities is declining, because a career in science is not as attractive

as our business operations, engineering or administration, and the universities are becoming

consumer oriented. Critically comment.

17. The development of Artificial Intelligence (AI) is increasingly becoming a nation a security concern

in recent years. In light of this statement, discuss the merits and demerits of the use of AI for military

purposes. (10 marks)

SAMPLE PRINTED NOTES

Four Topics covered below

1) India’s Leapfrog to Methanol Economy

2) Indian vs Chinese economy

3) Public private partnerships

4) Financial Inclusion

India’s Leapfrog to Methanol Economy

Table 1 Prelims Booster

Methanol (CH3OH) It is a single carbon compound that can be

produced from coal, natural gas, biomass

DME and bioDME

Primarily produced by converting hydrocarbons via gasification to

synthesis gas (syngas). Synthesis gas is then converted into methanol

in the presence of catalyst (usually copper-based), with subsequent

methanol dehydration in the presence of a different catalyst (for

example, silica-alumina) resulting in the production of DME

Alternative fuel due to the advantages

Scalable and sustainable fuel as can be produced from a variety of

feedstocks.

Efficient and can be cent percent renewable.

Less Infrastructure costs

Emits lesser NOx and Particulate matter (PM) than gasoline and

produces no SOx as there is no sulphur in methanol.

Can be blended (or be completely substituted) with gasoline to use as a



GS -3 Mains 2019-20

Course Broucher


9045716803


A) Methanol Economy : means the replacement of fossil fuels

with methanol as means of energy storage, transportation fuels and

feedstocks of chemical products

B) Need for Methanol Economy in India:

Energy security: India is the 6th highest consumer of

petrol and diesel in the world

Environmental concern: India is third highest energy related CO2 emitter country in the world.

Current Account Deficit: India’s crude import bill stands at almost 6 lakh crores

Inflation: The price of fuel has multiplier effect

C) Applications of Methanol in various sectors of Indian Economy:

1) Transportation: Methanol blended with gasoline and diesel or complete substitution + railway engines can run on

methanol/DME blends + methanol and DME powered ships cost cutting and efficiency increase

2) Energy: India Huge Coal reserves ; Biomass generated ; Stranded & Flared gases alternate feedstock and fuels

India’s 10% reduction in import dependence of oil and gas by 2022.

3) Manufacturing: methanol compatible engines under Make in

India FDI investments employment

4) Marine sector: liquid form no SOx or NOx ; cheaper and cleaner than LNG and Bunker / Heavy Oil. meeting the

stringent emission regulations by the IMO reduce the costs.

5) Electricity power generation: as a turbine fuel

6) Agriculture: Biomass like rice straw or Bamboo in North East

feedstock additional income to the farmers

7) Telecom Towers: 2% of diesel consumption can be replaced

8) Chemicals sector: Methanol producing various chemicals

like formaldehyde, acetic acid and olefins can be exported

9) Clean cooking fuels: Ujjwala Yojana (PMUY) LPG

connections Methanol or DME blending with LPG or the complete substitution of latter through former can gradually

displace LPG imports

10) Swachh Bharat: opportunity for India to use its landfills to convert it into methanol and avoid problems such as toxins leaching into the soil and release of GHG emissions etc

D) Global Developments

Methanol is being actively pursued by China, Italy, Sweden, Israel, US, Australia, Japan and many other European

countries.

10% of fuel in China in transport Sector is Methanol. China alone produces 65% of world Methanol and it uses its coal to

produce Methanol.

The Technology has acquired commercial maturity and countries like Iceland are producing in meaningful quantities

already.

The United States ran several methanol programs, especially in California from 1980 to 1990 for the conversion of

gasoline run cars to methanol blended fuels

Israel, Italy have adopted the Methanol 15% blending program with Petrol.

Methanol is seen by the world as the “Enduring Energy Solution known to Mankind”

D) Status of Methanol in India:

Presently at a nascent stage in production and usage but huge potential in both

Methanol imports is meeting 90% of India’s methanol requirement because cheaper for India to import vs domestic

production considerable forex outgo

India imports 99% of its methanol from Iran and Saudi Arabia who produce it from natural gas

India does not have a commercial coal to methanol plant despite having large coal reserves

India is producing all of its methanol from imported natural gas

The Government is likely to go ahead with a target of 15% blending by methanol/DME in gasoline/diesel by 2022

Recently, Coal India Limited (CIL) planned to set up a coal based methanol plant in West Bengal

The Namrup-based Assam Petrochemicals Limited (APL) rolled out the country’s first methanol- based cooking fuel

project-

transport fuel

DME and bioDME

commonly used as a replacement for propane in liquid petroleum gas

(LPG)

a viable and clean diesel alternative

can also be blended with LPG

a non-toxic compound and is safe to handle



GS -3 Mains 2019-20

Course Broucher


9045716803


‘Green and Clean Fuel Pilot Project on Methanol Cooking Stove’. The project has been promoted by NITI Aayog.

E) NITI Aayog's Plan for Methanol Production in India:

India is producing all of its methanol from imported natural gas since domestic production is not economically viable at

present. it must use abundant domestic high ash coal to make it economically viable Commercial coal to methanol

plants need to be set up wherever necessary.

It is estimated that a 1600 tons per day of methanol plant will require a capital expenditure of ~INR 1200 Cr which

would be able to produce methanol at INR 17- 19 per liter which is comparable with the cost of imported methanol. Whereas, presently, the per liter cost of methanol production in India is INR 25-27 or even more depending on the

volatility in the price of imported natural gas.

Biomass/municipal solid waste and flared natural gas can also be used for methanol production, but the continuous availability of latter would be a challenge.

F) Challenges:

Water Intensive 20 cubic meters freshwater for 1 ton coal-based methanol wastewater.

leakage and explosion loss of life and property.

Vehicle’s damage rubber or plastic components + corroding metals such as aluminum, magnesium, zinc

During the process of making methanol from coal, a large amount of CO2 is emitted.

Technology to co-generate power in methanol plants requires further refinement

For blending more than 15% of methanol, internal combustion engines changes in the engine design are required.

G) Way Forward:

1. Create an innovation fund support the R&D activities a demonstration coal to methanol production plant

2. Have sufficient domestic methanol production capacity so that user industries are assured of supply

3. Simultaneous programs for the development of

flexi-fuel vehicles to run on methanol/DME fuel blends

Methanol/DME cookstoves

Converting diesel powered railway locomotives to methanol/DME based engines.

4. Explore possibility of setting up a manufacturing facility for methanol/DME in Iran or Qatar as these countries can

provide the natural gas at very low prices

5. Import Methanol/DME for its direct application or for further conversion to chemicals like olefins as it is likely to

be economically advantageous rather than importing crude

6. Set up a mega coal based complex for production of power, methanol and fertilizer in an integrated manner

7. Methanol Blending Program with all possible fossil fuels can be implemented on an early basis

MAINS QUESTION :

With growing energy needs should India work on exploring methanol production and application ? Discuss the facts and fears associated with Methanol economy in India(250 Words, 15 Marks)

India vs China’s Economy

Past to Present

In 1985, GDP per capital for India and China was around $293 per person.

In 2017, as a World Bank report, India’s per capita has managed to reach $1,942, while China’s GDP per capita has

expanded to $8,827.

In 2017, India became the sixth largest economy with a GDP of USD 2.59 trillion while China was the second largest

with a GDP of USD 12.23 trillion, as per World Bank data.

Presently, India and China on an average have



GS -3 Mains 2019-20

Course Broucher


9045716803


same population rates

identical levels of unemployment

current GDP rates (highest among the world).

However, China’s economy is five times larger than India’s

Reason /factors for Difference in the Size of two Economies today

China went through Cultural Revolution and the Great Leap Forward thus adopting an authoritarian and capitalistic model,

while India followed a socialist economic model with state control. This model difference is one the key reasons China is in a better shape than India. In addition to this several other factors are listed below in detail -

Factor China India

Politics

Authoritarian political system with The

Chinese Communist Party (CCP) governs

with minimum barriers increases ease of

policy implementation rapid development on a large scale.

e.g. The Three Gorges Dam, which is the

world’s largest hydropower project has been

building for almost a decade. It has displaced

more than 1.2 million population, and flooded

1,350 villages, 140 towns, and 13 cities in

total. However, dam provides → Job opportunities → Clean energy

India is governed through a complex

democracy. It has a federal parliament

with regional assemblies. slows down

the rate of development due to the delay in

decision making process reducing the ease of implementation of polices

e.g. It took Indian parliament 16 years, to pass a GST bill in 2017

High corruption levels and a politically

divided system also adds to delays in projects.

Industrial

Focus

Backyard industrialization MSME Focus

Labor intensive Jobs Balanced regional development

Mahalanobis & Socialistic Model Heavy

Industries in Public Sector focused Imbalanced regional dev. + Failed PSUs

Economic

Reforms

Started in 1980s Early mover advantage Private investment from west

Started in 1991 as a result of crises

Political and

Governance

Reforms

Great Leap Forward 1958 Capitalistic Model

Cultural Revolution 1966

1950 Constitution of India Socialistic Pattern

Green and Industrial revolution impacts remain limited)

Openness of

the economy

SEZ Model Export orientation Foreign exchange earnings

Economic planning Self-sufficiency

objective Inward looking strategy No exports but high imports 1991 Crises

Geographical

reasons

Majority land is unproductive

Industrialization preferred over agriculture high economic growth

Instability in focus over Agriculture &

Industry Neither could develop properly Finally in 1991 onwards Service sector



GS -3 Mains 2019-20

Course Broucher


9045716803


dominates Limited jobs

Productivity

• China has a better railways and roads

system which increases speed of transportation.

• China invested heavily in universities and

skill development programs. The country also

focused on creating jobs in labor-intensive

sectors for its large population such as in

garments, textiles, assembly and light engineering.

World Economic Forum’s Global

Competitiveness Report India lags

behind China in almost all infrastructural

category.

Lack of investment in infrastructure is

estimated to reduce India’s GDP growth annually by 2 percent.

Urbanization A high level of urbanization has occurred in

China as opposed to India. 58 percent of China resides in the city.

There is a strong evidence for the positive

relationship between urbanization and growth of a nation.

Today only roughly 37 percent of Indian live in cities

Both the countries saw a shift of

employment from agricultural sector to

service and other non-farming sectors, as

more people moved to cities in search for a

higher wage. This transition happened

faster in China than in India.

Indian Economy strengths China’s strengths

Exports and software exports have doubled

in the last couple of years, even though export-to-GDP ratio is still low.

India has seen a huge jump in foreign

investment (over $21 billion)

India’s young population is estimated to

contribute to a high rate of personal savings.

Today China is a $12.5 trillion economy,

the second largest in the world.

China’s trade is six times larger than India’s

trade. In 2007 increase in China’s trade

levels were around $433 billion where

greater than India’s total trade.

China’s trade is the second-third largest in

the world, while India lags behind with only

1 percent of world trade.

China’s Manufacturing Productivity is

1.6 times than that of India

Inflation in China is 1/6th times of Inflation

in China



GS -3 Mains 2019-20

Course Broucher


9045716803


Weaknesses of Chinese Economy

Moving in the direction of a more reliable

growth strategy which relies less on exports

and majorly on domestic demand

Regarding Entrepreneurship : China

communist country State run enterprises

are not efficient & not innovative. The Indian industry is based on innovative

enterprises. Given the competitive nature of

the world economy, the Indian industry

stands a better chance at success in the

future

One Child Policy in China a

demographic time bomb there are more

people out of the workforce than in it. On an

average, every Chinese worker is expected

to pay for the costs of at least two Chinese

retirees. (India, on the other hand, is facing

a demographic dividend)

Brightful future for India

Today India is the fastest growing economy in G 20. Based on OECD report of 2019, India’s GDP is said to be around

7.5 percent by 2020, versus being 7.25 percent in 2019

China’s economy is estimated to witness a cool down due to global trade

tensions. China’s economy is estimated to be around 6 percent by the year

2020, according to a Paris based think tank.

India’s economy clocked at a low of 6.6 percent in October-December

period in 2018. While China according to Global Economics Prospects

report 2019, is projected to witness a growth of 6.2 in the years 2019 and

2020, and a 6 percent growth in 2021.

Based on the assumption that rapid growth eventually slows down,

China’s time span of high growth may soon run its course, while India’s

experience if more recent.

As per former RBI Governor, India will become bigger than China

eventually as China would slow down and India would continue to grow.

So India will be in a better position to create the infrastructure in the

region which China is promising today.

Growth lessons India can learn from China

An increased investments and incentives in labor-intensive industries to create more job opportunities. In the past 25

years, labor-intensive industries have suffered in the form of excessive regulations and tax. In order to increase job-

creating, removal of restrictive labor regulations India Brought Shramev Jayate Reforms

Increase investment in infrastructure to account for 6.5 percent of the total GDP and release investment tools by

divesting in infrastructure assets which are state owned.



GS -3 Mains 2019-20

Course Broucher


9045716803


Enhance productivity of ports, improve conditions of railways and highways, and reduce power theft

Allow private sector to investment in education in order to improve skills and human resources.

Invest in new cities, to promote urbanization which will ease the delivery of civil services to raise the standard to living

for the population.

De-reserving goods for medium and small enterprises to make them grow bigger and faster

The Way Forward

India India’s economy will continue to grow if economic reforms continue to grow and are stretched to large-scale structures. Factors that will help in India’s potential growth

High domestic demand

India’s demographic dividend is considerably larger than China’s

India’s 60-year-old history of democracy provided it a solid foundation for adaptability and stability.

New income support measures for framers

fiscal and quasi-fiscal stimulus

Structural reforms like GST, Demo, IBC

India vs. China: Is There Even a Comparison ?

China’s Economy is Four Times Larger Than India’s Economy : The GDP of India is close to $1.5 trillion. At the same time, the

GDP of China is close $7 trillion. The economy of China is at least 4 times as big as the economy of India. This means that even if

China grows at the rate of a meagre 1.5% and India grows at a rate of 7%, the Chinese economy would have added the same

amount in output as the Indian economy would have!

Comparing the GDP growth rates of India and China is therefore a pointless exercise. China’s growth rate has been consistently

higher than India’s growth rate over the past three decades or so. India has barely overtaken the Chinese growth rate for a couple

of quarters. Only if India can continue to beat the Chinese growth rate by a huge margin for the next two to three decades, does

India stand a chance of overtaking the Chinese economy.

RECENT NEWS AND ITS ANALYSIS

In 2016, NITI Aayog Chairman Amitabh Kant projected that India would become a $10-trillion economy by 2032.

‘The World in 2030’ report by HSBC has stated India’s economy would grow to $5.9 trillion by 2030 from an estimated $2.8 trillion at present.

ANALYSIS

Firstly, Despite India clocking a higher economic growth rate than China, the gap between the size of the two economies will

further increase by 2030. China will overtake the US as the world’s largest economy, and India will jump four notches to become the world’s third-largest.

Secondly, India will be outperformed by neighbor Bangladesh, which is expected to be the top-performing economy in terms of growth rate by 2030.

Thirdly, despite decent economic growth, India’s citizens will not get rich at the same pace as those of some neighbouring and other lower-middle-income countries. (At present, an average Chinese citizen earns almost $7,900 more than an Indian. But by 2030, the per-capita income gap between the two nations could widen to $13,000)



GS -3 Mains 2019-20

Course Broucher


9045716803


PUBLIC PRIVATE PARTNERNSHIP IN INDIA (P3) MEANINGLong-term contract between a government agency and a private-sector company –used to finance, build, and

operate projects –public transportation networks, parks, and convention centres.

- Private party bears significant risk and management responsibility, and remuneration is linked to performance.

- Public Sector monitors the performance of the private sector and enforce the terms of the contract.

NEED OF PPP in India

TO BE COVERED IN THE CLASS IN DETAIL

EVOLUTION OF P3 IN INDIA- Three phases

1. FIRST PHASE 1990 to 2004 : inception of P3’s and key projects primarily in the transport and power sectors.early

initiatives failed to scale up PPP projects in the absence of an integrated approach, clear policy framework, lack of an

institutional mechanism and detailed road map for future growth.

2. SECOND PHASE 2004-2011

Private partnerships scaled up. Strong political will to scale up P3 in infrastructure led to the formation of the

Committee on Infrastructure chaired by the Prime Minister. –Ensured engagement at the highest level of

government.

Streamlining the appraisal and approval processes and standardizing of documents –fast roll out of projects.

Launches of new initiatives –Viability Gap Funding (VGF) scheme, India Infrastructure Finance Company

Limited (IIFCL). increase financial flexibility and capacity in the ecosystem.

11th Five Year Plan (2007-21) –performance exceeded expectations private sector contributed 36.62% of

total infrastructure investment. GDP contribution increased from 5% to 7.3%

3. THIRD PHASE Current phase. Decline in the momentum gained during 2nd phase. Twelfth Year Plan (2012-17)

targets were set with a view to continue on the upward trajectory.

Stalled projects, lack of investor interest –different stages of construction and operation –dilution in important

terms of standard bidding documents, over engineering of project design, aggressive bidding by project

developers, financing issues, lack of funding and lack of equity funding. led to slowdown in P3 project.



GS -3 Mains 2019-20

Course Broucher


9045716803


ISSUES WITH P3(Economic Survey 2015)

Reasons According to the Economic Survey 2015, below are the reasons why the P3 is stalled in India:

Over-leveraging Many companies have been bidding beyond capacity and expecting government to redraw contracts.

Finance Long term finance for P3 projects dried up due to excessive dependence on banks and lack of proper

corporate bond market in the country. Banks –further stressed –high NPAs and governance issues.

Flaws in design P3’s have certain inherent flaws in design led to stalling eventuallyno re-negotiation structures;

wrongful risk allocation; focus on fiscal provision rather on efficient service provision; no measure to

penalise the providers for poor service; bidders giving highest revenue sharer to government win contract; failed projects don’t lead to investigations against bureaucrats while re-negotiated might do so.

Center state

coordination

TO BE DISCUSSED IN CLASS WITH GOOD EXAMPLES

Private sector

inefficiencies

Corruption

Governance issues

P3 Models:

4 major families of P3 models are

1. Management contracts Contractual arrangement for the management of a part or whole of a public facility or service

by the private sector. Capital investment not primary focus.

2. Lease contracts

3. Concessions

4. Build-operate-transfer (BOT) and its variants. Simple and conventional P3 model.

BOT (Build-operate-transfer) Private players build, operate and maintain infrastructure for a specified period before

transferring the asset back to the government. Private players arrange finances while collecting toll revenue or annuity fee from

government. Government may or may not undertake risks.

Problem private players have to fully arrange for finance and NPA riddled banks are reluctant to lend and delays and

cost overrun due to environmental clearances and land acquisition worsens finances.

VariantsBuild-own-operate (BOO), Build-own-operate-transfer (BOOT), Build-operate-lease-transfer(BOLT), Lease-

Develop-Operate(LDO)

EPC (Engineering, Procurement and Construction) model

TO BE DISCUSSED IN CLASS IN DETAIL

Hybrid Annuity Model (HAM) As per Economic Survey 2018: Hybrid Annuity Model (HAM) is a combination of two

models



GS -3 Mains 2019-20

Course Broucher


9045716803


1. EPC (Engineering, Procurement and Construction) model(40%) private players construct the road and have no role in

the road’s ownership, toll collection or maintenance. NHAI pays private players for the construction of the road.

The Government with full ownership of the road, takes care of toll collection and maintenance of the road.

2. BOT (60%)definition given in Types of P3 model. private players arrange all the finances for the project, while

collecting toll revenue (BOT toll model) or annuity fee (BOT annuity model) from Government, as agreed. In the

BOT annuity model, the toll revenue risk is taken by the Government. The Government pays private player a pre-fixed

annuity for construction and maintenance of roads.

On behalf of the Government, NHAI (National Highway Authority of India) releases 40 per cent of the total project

cost. The balance 60 per cent is arranged by the developer. The developer usually invests not more than 20-25 per

cent of the project cost, while the remaining is raised as debt.

SWISS CHALLENGE MODEL

To be covered in class in detail

Way forward

Recommendations of Vijay Kelkar Committee

TO BE DISCUSSED IN CLASS IN DETAIL

Recommendations of NITI Aayog

1. Infrastructure Committee constitute with the Finance Minister or PM as the chairman and secretaries from relevant

department as members. –can resolve policy issues on a fast track mode.

2. Increase Enforcement and Monitoring EffortsP3 projects are based on concession agreements –define quantifiable

outputs and quality standards.

3. Strengthen Dispute Resolution Mechanisms attempts to encourage alternative resolution mechanisms like amicable

settlement, mediation and conciliation –internal dispute resolution committee with stakeholders from both public and

private side and a neutral third party, appointed at the beginning of the project.

4. Curb Aggressive bidding standardized documentation should be updated to include weightage for technical

qualification parameters used in RFQ stage to RFP stage to avoid aggressive, unviable bidding.

5. Recommendation on Financing by HLCFI incentivize commercial banks to refinance their medium term debt from construction and initial operation period by insurance and pension funds;

Reorient the role of IIFCL –shouldn’t be limited to replication of bank lending, should be enhanced to include –credit

enhancement to enable bond issuance in infrastructure, increase capacity of lending institutions, Resolve NPAs issue

and Operationalize National Investment Infrastructure Fund (NIIF).

6. Sector Specific Measures:

a. Highway ensure strict adherence to clearances being available before project is awarded; expedite clearance

processes by the constitution of an Infrastructure Committee recommended above; develop shelf where land

acquisition/environmental clearance are available; expand the current use of HAM and Operation and Maintenance

Models.

b. Ports reorient the Model Concession Agreement (MCA) on the basis of models followed in some minor ports in

Gujarat.

c. Airports create robust framework for ensuring appropriate capital expenditure monitoring by the regulator and

approval of capital expenditure only after the due ex-ante analysis; Removing regulatory uncertainty in 2017 by



GS -3 Mains 2019-20

Course Broucher


9045716803


adhering to a consistent policy as discussed in the “Civil Aviation” section of the “Transport and Connectivity”

chapter.

d. Telecommunication Expedite the implementation of BharatNet by engaging private partnership through the P3

model as per the recommendations of Telecom Regulatory Authority of India (TRAI) released in February 2016.

Exam time revisionary Points

Meaning Long-term contract between a government agency and a private-sector company –used to finance, build, and

operate projects –public transportation networks, parks, and convention centres.

3 phases of P3 in India 1st phase –initial phase, key projects primarily in transport and power; 2nd phase –private

partnerships scaled up, VGF scheme, 11th year plan and 3rd Phase current year, 12th 5 year plan, slowdown of projects.

Issues over-leveraging, aggressive bidding, excessive dependence on finance (NPA problem) and Flaws in design

Model 4 families of P3 models- BOT model; HAM -40% EPC and 60% BOT.

Recommendations of NITI Aayog infrastructure committee, increase enforcement and monitoring efforts, strengthening

dispute resolution mechanism, curb aggressive bidding and recommendation of financing by HLCFI. Sector recommendations

– telecommunications, ports, airports and highways.

Financial Inclusion: Evolution Since Independence

A. Meaning of Financial Inclusion:

It is a process of making financial services that are accessible and affordable to all people and businesses. Its

aim is to address and bring solutions to issues that exclude people from participating in the financial sector.

B. United nation’s goals of Financial Inclusion :

1. Accessibility reasonable cost for all

households’ entire range of financial

services.

2. Efficient and safe institutions

governed by proper regulations and

performance standards.

3. Financial institutional sustainability

guarantee continuity and certainty of investment.

4. Competition ensure choice and affordability.

C. Objectives of Financial Inclusion:

To help secure financial services and products at

economical prices deposits, fund transfer services,

loans, insurance, payment services, etc.

Aim establish proper financial institutions

should have clear-cut regulations and maintain high

standards. build and maintain financial sustainability.

Intends numerous institutions afford financial

assistance sufficient competition clients have options.

Traditional banking options minimal services of



GS -3 Mains 2019-20

Course Broucher


9045716803


institutions that offer inexpensive financial products/services.

Increase financial literacy awareness benefits of services

among economically underprivileged sections.

Inclusion of digital financial solutions mobile banking

or services economically underprivileged people, remote

areas of the country.

D. Need for Financial Inclusion:

Development Greater access to financial

services= Increase

in Savings+ Decrease in income inequality and poverty+

increase

in employment levels.

Growth encourages habit to save enhances

country’s capital formation boost the

economy + availability of sufficient and

transparent credit from formal financial

institutionspromote entrepreneurs= increase

in productivity and prosperity in rural areas.

Service Delivery direct cash transfers to

beneficiary bank accounts will become

possible funds actually reach the targeted

beneficiaries instead of being siphoned away.

Bank’s efficiency could experience higher

operating efficiency- retail deposits are cheap

and insensitive to risks; add considerable

stability to the sector + increasing bank’s

outreach help reduce distance for consumers;

good relations- judicious pricing and lending

decisions.

Consequences of financial exclusion

1. difficulty getting jobs employers want

to pay wages into account

2. no bank account reduces credit score

can’t get access to other financial products

(services and credit)

3. dependence on informal/illegal lenders

huge debt-suicide, especially farmers.

4. Savings in cash at homevulnerable to

theft.

E. Goals of Financial Inclusion for Women Empowerment:

Belief of Financial Inclusion women are more capable of handling finances efficiently compared to men.

target women by helping them get started engaging in financial management.

Patriarchal societies women aren’t permitted to be involved in managing money asked to take care of

only domestic chores. believe that women aren’t capable of handling money.

RBI’s initiatives

for F.I.

Description

No frills account Basic bank account minimum balance of

zero/low balance were converted

into BSBDA –basic savings bank

deposit account issued by the RBI

in 2012.

BSBDA- Basic Savings Bank Deposit

Account

Doesn’t have the facility of minimum balance account many services availed by

banks.withdrawal and deposit of

cash at the bank branch/ATM.

receipt and credit of money through

electronic payment/cheque.

LBS- Lead Banking

Scheme

Envisages the lead role for an individual

bank private and public banks.

Priority area semi-urban and rural

section. increase the flow of small-

scale industries

PMJDY- Pradhan Mantri

Jan Dhan Yojana

Slogan “Mera Khata- Bhagya Vidhata”

Provided 50,000 plus overdraft facilities

for accounts that are linked to

Aadhar card provided for Rupay debit cardholders

Business Correspondent

System

Bank representatives individually go to

areas allowed to them to carry

banking tasks.

Help improve standard of living

Bridges the gap between rural and urban

peopleboosts bank’s businesses and

increases bankable customers



GS -3 Mains 2019-20

Course Broucher


9045716803


Help women get more financially independent by encouraging them to take up more employment

opportunities.

Targeting women belonging to low-income groupstaught in simple ways to save money for the

futureexposure to multiple affordable savings instrumentstaught about various forms of credit availability

in the market –can help them start a new small business venture or take up a training course increase their

monthly income.

Institutions provide special rates and exclusive discounts or other benefits to women charge subsidised or

discounted interest rates for lone product some savings accounts, women depositors gain more interests on

their deposits.

F. Challenges of Financial Inclusion:

IlliteracyIndia’s 1/4th of population is illiterate ad below poverty line- ensuring financial inclusion is a

challenge Low income- inability to provide collateral security More Reliance- on informal lending.

Difficulty- understanding of different product offerings, financial terms, and conditions Hidden bank

charges -demotivated poor people from availing financial services

Lack of credit, low-costing and high-quality financial advice.

Gender inequality most women are excluded from the formal financial system

Non-Performing Assets (NPAs) rising level makes it difficult to improve financial inclusion situation in

India.

G. Solutions of Financial Inclusion:

Banking initiatives:

1. Regional Rural Banks (RRBs) on the basis of Narasimhan Working Group in 1975, RRBs were

established to serve banking needs of rural population.

2. Priority Sector Lending important role given by RBI to the banks provide a portion of bank

loans to few specific sectors like agriculture or small scale industries.

3. Business correspondents RBI permitted banks provide door-step delivery of financial and

banking services.

4. No-frills accounts bank accounts which don’t require a minimum balance –accessible to vast

sections of the population.

5. KYC relaxation for small accounts in August 2005 opening of bank accounts became even easier

with the introduction of Aadhar.

Social Security Initiatives Insurances: PM Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jeevan

Jyoti Bima Yojana Atal Pension Yojana –focuses on unorganized sector,

H. Concerns about the initiatives:

PMJDY from the 180 billion accounts, 48% of those accounts haven’t had any transaction in the last one

year.

Rupay cards only 33% of beneficiaries were ready to use

People buy insurance policies without proper planning and give up halfway as they don’t have any money

to pay the premium. penalties are very harsh.

Misuse of SHGs Panchayats are now competing with NGOs and rural banks in forming SHGs –political

pressure and misuse of funds.

I. Way forward:

Launching a new scheme for comprehensive financial literacy an Arthik Shiksha Abhiyan will help

improve financial literacy and may be integrated in the regular school curriculum. Efforts to improve

financial literacy should be complemented by mass media campaigns.



GS -3 Mains 2019-20

Course Broucher


9045716803


Access the performance of banking correspondents and give better incentives. An inadequate

compensation structure makes correspondent banking unattractive. addressed by the RBI –developed a

framework for basic and advanced levels certificates.

Need create better monetary incentives for correspondents.

Leverage bank accounts and other platforms to scale up payments systems in underserved areas.

Using technology improve the assessment of credit-worthiness for households and informal

businesses.

Create new data-sharing framework that builds on the success of Jan Dhan and Aadhar platforms.

Existing gaps in Land records like transfers of ancestral properties need to be filled.

Facilitating growth of online and paperless banking this will reduce friction, documentation proof

requirements and cost of banking services.

Following actions are required on the policy front-

1. Ease transaction for e-KYC based deposit and loan accounts.

2. Push digital signature for loan accounts by asking public sector banks to carry out at least 25% of

their transactions through paperless accounts by 2022-23.

3. Expand dig locker services by issuing more issuers of documents

CONCLUSION:

1. Financial inclusion is the process of making financial services and products accessible to people from all sections of the

society.

2. Goal of UN’s FI is to make it accessible, efficient and safe, institution’s stability, and have competition to ensure choice

and affordability.

3. Aims to increase financial literacy to the underprivileged sectors of the society.

4. Financial exclusion people don’t get jobs as employers want to pay wages into accountdependence on informal

moneylenders cash kept at home is vulnerable to theft.

5. Women are more capable of handling finances compared to men.

6. Hidden Bank charges, lack of collateral security and finding it difficult to understand complex financial services

demotivates the informal sector.

7. Banking initiatives Regional Rural Banking, Priority Sector Lending, Business Correspondents, No frills accounts,

KYC relaxation.

8. Social Security Initiatives PMBSY, PMJJBY, and Atal Pension Yojana.

9. Concerns about initiatives PMJDY (48% accounts haven’t had transactions in the past year), Rupay Cards (33%

ready to use), giving up halfway with insurance etc

10. Way forward Launching a new scheme for comprehensive financial literacy, access to performance of banking

correspondents, need to create better monetary incentives for correspondents, using technology to improve the system

of credit-worthiness and facilitate the growth of online paperless banking.

MAINS PRACTICE QUESTION

Not many years ago, financial inclusion was a concept but it is becoming reality in the

country. Discuss various government initiatives in the past and present times taken in this

regard. Also discuss major challenges still faced by India on the path of complete financial

inclusion.



Scanned by CamScanner

























GS Paper IIIMains 2019-20

CA RAHUL KUMAR

WriteToBeIAS.com

DISINVESTMENTS IN INDIA

INDEX

1. Status on the eve of independence2. Rationale behind PSUs dominant Role3. Problems faced by PSU’s – 1991

4. Disinvestment : Meaning, Categories5. Purpose of disinvestment6. Policy on disinvestment7. Budget 2016 -17 : Investment based approach

8. DIPAM

9. Arguments for Disinvestments

10. Arguments Against Disinvestments

11. Targets and Actuals12. Role of PSUs presently13. Way forward14. Conclusion

On the eve of independence

• Socialistic Pattern of Economy

• State led capitalism

• Mixed Economy (Public + Private)

• Centralized planning → Imperative planning

• Self Reliance

• 2nd Five Year Plan→ Mahalanobis Model →

Heavy Industries → PSU Dominance

Rationale behind PSU’s dominant Role

•Tackling regional imbalances

•Jobs creation

•Import substitution

•Coordinated decisions

•Basic Industries like steel, power etc

•Market for Big Industries through each other

•Budgetary support →Big enough to face risks

•Weak private sector

Problems faced by PSU’s-1991

• Financial losses – burden on fiscal deficit.

• Issue of White Elephant – poor project planning & time & cost overruns.

• Generalist Bureaucratic control → Low efficiency/accoutability

• Excessive political interference.

• Surplus man power – cost of man power is more but Efficiency is less.

• Low price recovery due to social Burden.

• Over protection from competition – so started producing poor quality of goods.

"The difficulty with PSU → a PSU is expected to perform on similar lines as private sector units yet is deprived of management autonomy →

Disinvestment : Meaning

• Government’s action for selling or liquidating its share holding in a PSU in order to

– get the government out of the business of production and

– increase its presence and performance in the provision of public goods and basic public services such as infrastructure, education, health etc.

Three Categories of disinvestments

Outright sale

100% sale

Disinvestments

partial transfer of govt equity to private Sector

Strategic Disinvestment

51% of equity

and Management control to private sector

e.g. Air India

Purposes of Disinvestment Policy

i. To infuse the professional management vs.

Bureaucratic system

ii. Wider ownership comprising of Govt,

Public & private sector →Accoutability

iii. De-politicisation of essential services

iv. Enhance the financial discipline & reduce

subsidy burden: reduces fiscal burden.

v. More competition and Better Quality of

goods and services

Purposes of Disinvestment Policy-

vi. More autonomy to the PSU management through

Navaratna, Maharatna, Miniratna status

• Autonomy to invest till particular levels as per their

status

• Their workforces not apply rules of Govt.

{economic logic vs Public Service Logic}.

viii. To enable Govt. to focus on social objective like

education, health, rather than business values.

Timeline

1991-93– 20% disinvest in select PSUs– Shares sold to Domestic FIs and MFIs– Later expanded to FIIs, Banks, PSU Employees

1998-2000 : PSUs classified into 2 parts• Strategic Sector– industries which are strategically

important like Defence, Railways, and Atomic etc. →No Disinvestment

• Non strategic Sector: others -> Disinvestment in phased manner

PSUs like Maruti, VSNL etc were privatised

Timeline

2004 : UPA Common Minimum Programme

– Revive Sick PSUs

– Don’t touch profitable PSUs

– Commercial Autonomy

2005 : National Investment Fund

75% proceeds social sector ; 25% PSUs capitalisation

Disinvestment policy 2009 : PRINCIPLES

1. Public enterprises are the assets of public → So, public’s

ownership should be increased.

2. Reserve 20% of shares in OFS (offer for sale) for retail

investors (for General Public/ individuals) → Broad base

ownership.

3. Retaining majority shareholding of 51% & management

control in strategically imp. Sectors

4. Strategic disinvestment of identified PSU’s with more than

50% equity sale & simultaneous transfer of management

control

Budget 2016 -17 :

Investment based approach

• Govt moved from Disinvestment based

approach to investment based approach. → to

enhance efficiency of PSU → Get more profit.

• Transfer of Dept of Investment to Dept of

Investment & public Asset management

(DIPAM).

Investment based approach

• The current government is pursuing disinvestment, not to vacate the public sector, but to enhance its efficiency.

• The new disinvestment mantra is to

• i) Minimize interference

• ii) Allow public sector undertakings to function along commercial principles

• iii) Grant managerial autonomy in decision-making, such as in appointments.

Department of Investment and Public Asset Management or ‘DIPAM’

• Aim of DIPAM: Efficient management of centre’sinvestments in equity including its disinvestment in central public sector undertakings (CPSU)

• Mandate:

• i) Advice the government in the matters of financial restructuring of CPSUs.

• ii) Attracting investment through capital markets.

• iii) Addressing issues such as capital restructuring, dividend, bonus shares, etc.

Investment Based Approach

Recent Initiatives

• Time bound listing of 14 CPSU’s – Transparency

inc. – Accountability (pipeline of initial public offers (IPOs) of state-owned enterprises in place)

• To promote the retail investors through index

based ETF like Bharat 22

Investment Based Approach

• Proposed Alternative Set up

– to speed up strategic sales

– comprises select ministers empowered to decide on the timing, price and amount of shares of a state-run company to be put on the block for outright sale,

Targets and Actuals

• FY 2017-18

Target 72,500 Cr Actual Rs 100000 Cr

• FY 2018-19

Target 80,000 Cr Actual Rs 85,000 Cr

FY 2019 – 20 : Target Rs 90,000

• Rail Vikas Nigam IPO Started• 10 more companies proposed are

– Telecommunication Consultants India, – RailTel Corporation India – National Seed Corporation India – Tehri Hydro Development – Water & Power Consultancy Services India – FCI Aravali Gypsum and Minerals India – Indian Railway Finance Corporation – Indian Railway Catering and Tourism Corporation, – IREDA and – North Eastern Electric Power Corporation.

Arguments For Disinvest -

1. At time of 1947 we did not have any investment Base -

– The initial rational for growth of PSU’s is no longer valid.

– We already have strong industrial Base, wider market &

Good private sector in space.

2. Poor performance of PSU’s in productive efficiency

parameter

In FY18, 71 out of 257 operational central public sector entities were in the red, notching up combined losses of Rs 31,260 crore.

State-run BSNL and MTNL had a combined loss of nearly Rs 11,000 crore.

Air India contributed Rs 5,338 crore to the loss

INDEX

1. Status on the eve of independence2. Rationale behind PSUs dominant Role3. Problems faced by PSU’s – 1991

4. Disinvestment : Meaning, Categories5. Purpose of disinvestment6. Policy on disinvestment7. Budget 2016 -17 : Investment based approach

8. DIPAM

9. Arguments for Disinvestments

10. Arguments Against Disinvestments

11. Targets and Actuals12. Role of PSUs presently13. Way forward14. Conclusion

Arguments For Disinvest

3. It is just change in portfolio of assets by the owner →

means, selling the good investment to buy more

promising Assets (Social security assets)

4. Current principle is that investment should be change in

favour of high social returns.

5. Public Management may never be able to revive some of

sectors and their financial operational health.

6. We should be guided by economic logic rather than

guided by nostalgia

Argument against Disinvestments-

1. Initially when we were in difficult Situation PSUs

was rescued us.

– By transferring ownership, whatever we built by

public taxes, profit will be enjoyed by the private

sector at the cost of public money

2. PSU built by tax payer’s money often in those areas

where private sector was not often ready to go due

to high initial risk should not be transferred on they

are becoming profitable.


3. Lack of clarity in valuation of PSU assets and absent

of clear-cut polity promote crony capitalism as was

reported by CAG in 2006 → that surplus land was

sold @ very low price

4. The social objective of formal jobs, need based

goods, providing level playing field, etc. will be

compromised.

5. Disinvestment is not going to benefit enterprise itself,

as the proceeds are just used to reduce the fiscal

deficits.


6. The unfavourable market conditions have

resulted into very low disinvestments proceeds

for many years

7. Issues of mis-utilisation of natural resources.

• Biggest sell-off surge happened under the NDA government of 1999-2004, when PSUs like Maruti, VSNL, IPCL and IBP were privatised

Suggestions

1. As per NITI AYOG → The S.D. should

be done only in those areas where

Private Sector is sufficiently present

and the chances of monopoly are less

E.g.- Air India

2. Disinvestment changes from case to

case basis rather than one shoe fit for

all approach.

Suggestions-

3. Judicial balance b/w labour welfare,

social agenda and economic logic

should be maintained.

4. An Independent regulatory authority to

regulate sale procedure and monitor its

after effects.

5. We should not wait for revival of sick

enterprise and act proactively to get

maximum price.

Conclusion

• NITI Aayog CEO Amitabh Kant → Government should spend money on improving social indicators like health, education, nutrition".

• PSUs are a necessity in areas – where government has a natural

monopoly; like railways, metro rail, utilities or sensitive areas like satellite or nuclear power.

– where private sector is not keen to invest, like public health in rural areas

Conclusion-

• Disinvestment proceeds must be parked in a separate fund to be used in infrastructure investment. ("We should not be selling the family silver to pay the grocery bills)

• "Private and public sector need not be completely divorced. While PSUs can build and own the infrastructure, private sector could do operations and maintenance efficiently." – For example: railway tracks could be state-

owned, and trains with the private sector.

Conclusion-

Upcoming Relevant Topics

• Strategic Disinvestments in India

• Air India – Case Study

OTHER TOPICS• Inequality in India

• Irrigation sector in India

• PPP in India and so on

Visit our Website for

WriteToBeIAS.com → Downloads

• 350+ Topics list on GS 3

• Comprehensive material on few topics

• Connect with us at

[email protected]

Listen our other Youtube videos

– Previous Year Trends analysis

– Syllabus topics

– Topic wise analysis of relevant topics

• Visit WriteToBeIAS.com → IAS Mains Courses

THANK YOU

Documents

GS -3 Mains 2019-20 WriteToBeIAS.com CA RAHUL KUMAR …