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What are the major problems of agricultural marketing in India? (10 marks)

Approach:

  • Briefly introduce with the agricultural marketing
  • Point out the major problems of agricultural marketing in India like lack of pan India markets, APMCs, Infrastructure etc.
  • Conclude with way forward.
Model Answer :

Agricultural Marketing is the way by which the farmers dispose of their surplus production in return of fair and reasonable price. Activities like collecting, grading, processing, transportation and financing are the key components of Agricultural Marketing.

The major problems faced by agricultural marketing in India are:

  • Lack of Pan India Market: There are about 2477 APMCs and 4843 sub-market yards regulated by the respective APMCs in India. Lack of the efforts by states to integrate them have via e-NAM has resulted in ineffective price discovery and marketing.
  • Variation in Market Charges: As per the provisions of APMC Acts of different states, the market committee collects the market charges which varies state by state. For e.g. the market charges vary between 0.50 per cent in Gujarat to 2 per cent in Punjab and Haryana.
  • Poor development of Rural Markets: These markets constitute the first contact points between the producer-seller and the commercial circuits. Most of these markets lack the basic minimum facilities.
  • Grading Infrastructure: It is grossly inadequate, only about less than 10% of the quantity sold by farmers is graded before the sale.
  • Handling: Due to lack of proper handling i.e. cleaning, sorting, grading and packaging and other facilities at the village level, about 7 per cent of food grains, 30-40 per cent of fruits and vegetables and 10-15 per cent of spices are lost before reaching the market.
  • Information Asymmetry: Poor producers find themselves at a major disadvantage in agricultural markets. They have little or no information on market conditions, prices and the quality of goods. They lack the collective organisation like Farmer Producer Organisation, that can give them the power. They can be easily exploited by those with whom they have market relations.
  • Essential Commodities Act: Many State governments are still enforcing several control orders and stocking limits under this Act. These control orders give rise to rent-seeking by the enforcement functionaries at the border checkpoints creating artificial barriers on the movement and storage of agricultural commodities.
  • Proxies: The infiltration of the traders or intermediaries in the guise of farmers reduces the benefits to be reaped by the actual cultivator.

Keeping these issues in mind the government have initiated programs like the National Agricultural Market (e-NAM), SAMPADA etc. Their effective implementation is key towards resolving the issues faced in the agricultural marketing in India.

Subjects : Economy

Deceleration in economy: Cyclical downswing, not a deep structural slowdown, says RBI

Headline : Deceleration in economy: Cyclical downswing, not a deep structural slowdown, says RBI

Details :

In News

  • The Reserve Bank of India has released its annual report for the year 2018-19.
  • The report confirms that several sectors are undergoing a deceleration in the economy.
  • However, it states that the deceleration could turn into cyclical downturn rather than a deep structural slowdown.

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From RBI annual report

Slowdown in growth

  • India’s real GDP growth was an average of 7.7 per cent during 2014-18 and 8 per cent in the first quarter of 2018-19, however, it has slowed down in the remaining quarters of 2018-19.
  • The growth slowed down to a five-year low of 5.8 per cent in the March quarter of 2018-19.
  • Several sectors, including auto and consumer goods, have witnessed demand slowdown, production cuts and lay-offs.

Private Consumption moderated in the second half

  • Private final consumption expenditure, accelerated in the first half of the year, supported by higher disposable income due to lower food expenses. However, the demand has seen moderation in the second half of the year.
  • The pick-up in activity in labour intensive sectors like construction provided additional push to household consumption demand.
  • Rural demand, however, was affected by moderation in agricultural growth which reflected in tractors and two wheelers sales.
  • Passenger vehicles sales were the lowest in five years on account of increase in insurance costs, volatile fuel prices, and lack of financing options due to the liquidity stress in the non-banking sector.
  • The production of consumer non-durables slumped to its lowest level in the past three years.
  • Going forward, public expenditure through the Pradhan MantriKisanSamman Nidhi (PM-KISAN) and farm loan waivers by some states are expected to sustain rural demand.

Reasons for the slowdown

  • Protectionist policies and actions like escalation of trade tensions; volatile crude prices; uncertainty over Brexit also had its effect on the slowdown in the economy.
  • Structural issues in land, labour and agricultural marketing are holding the economy back.
  • Bank credit is yet to become broad-based and flow of resources from nonbank financial intermediaries is also quite slow.
  • The delayed onset and skewed distribution of the south-west monsoon has created risks in crop production and has led to a decline in rural consumption demand.

Credit Delivery and Financial Inclusion

  • The Reserve Bank has made sustained efforts during the year to increase the penetration of formal financial services in unbanked areas.
  • Moreover it has continued with its policy of ensuring adequate flow of credit to all productive sectors of the economy.

Initiatives

  • Setting up of an expert committee/working group to examine the issues relating to credit flow to MSMEs and agriculture sectors.
  • Allowing SCBs to co-originate loans with non-deposit taking NBFCs for credit delivery to the priority sector.
  • The National Strategy for Financial Inclusion 2019-24 was prepared, besides ongoing measures to strengthen financial literacy and inclusion in the country.

Monetary Policy Operations

  • Inflationary pressures from volatile international crude oil prices, and currency depreciation in the first half of the year, reduced significantly in the second half.
  • The monetary policy committee has cut the policy repo rate by 75 basis points during February-June 2019.
  • Forex operations by the Reserve Bank increased the pressure on system level liquidity, necessitating active liquidity management.

Payment and Settlement Systems

  • The Reserve Bank has made efforts to ensure that the country has a ‘state-of-the-art’ payment and settlement systems that are not just safe and secure, but are also efficient, fast and affordable.
  • It has also continued with its emphasis on innovation, cyber security, financial inclusion, customer protection and competition.
  • Going forward, Vision 2021 aims to achieve a ‘highly digital’ and ‘cash-lite’ society to empower every citizen with an access to a variety of e-payment options.

Efforts in Financial markets

  • The Reserve Bank conducted liquidity management operations for maintaining an appropriate level of liquidity in the financial system
  • Intervention operations were conducted in the foreign exchange market to contain volatility.
  • In order to facilitate trade and payments, efforts were made to streamline regulations and align them with the current business and economic environment.
  • The external commercial borrowings regime was also rationalised during the year.

Bank NPAs

  • Several measures have led to a decline in gross non-performing assets of the banking system to 9.1% in March 2019, from 11.2% in the previous year.
  • After initial difficulties the insolvency and bankruptcy code is proving to be effective.
  • Recoveries have gradually improved and as a result, blocks in the path of the investment cycle are easing. 

Frauds in the banking system

  • Frauds in the banking system has increased by 74 per cent to Rs. 71,543 crore in compared with frauds worth Rs. 41,167 crore committed last year.
  • The average lag between the date of occurrence of frauds and its detection by banks was 22 months.
  • Public sector banks constitute the largest share of the frauds, followed by private sector banks and foreign banks.
  • Frauds related to loans constituted the majority share of the total amount involved in frauds in 2018-19.
  • Frauds relating to card/internet banking and deposits constituted only 0.3 per cent of the total value of frauds in 2018-19, the central bank’s report added.

Section : Economics

A road map to transforming India’s energy Editorial 30th Aug’19 HindustanTimes

Headline : A road map to transforming India’s energy Editorial 30th Aug’19 HindustanTimes

Details :

India progressing:

  • Forty years ago, India barely had a car manufacturer, was way behind in the space race, and had an insignificant IT sector.
  • Today, India is the world’s fourth largest car manufacturer, and is set to become only the fourth country to land on the moon.
  • These achievements should be applauded, but India is just getting started.

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India should play a significant role the energy sector:

  • India today has a golden opportunity to play a prominent role in global energy as well.

Energy and economic development:

  • Energy and economic development have been deeply intertwined.
  • Access to affordable and reliable energy is fundamental to reducing poverty, improving health, increasing productivity, enhancing competitiveness and achieving social justice.
  • In the last 30 years, India’s GDP has increased nearly tenfold, while the energy consumption over that period grew nearly 400% (with around 8% last year).

India to overtake China in energy consumption:

  • By some estimates, global energy demand seems set to increase by a third.
  • By some estimates, India will overtake China as the largest growth market for energy by the mid-2020s.
  • This is significant, given that around 30% of the Indian population does not have access to modern sources of energy.

Concerns over emissions:

  • More energy consumption tends to lead to more emissions.
  • By 2040, India’s share of global emissions seems set to rise from around 7% to 13%, despite the great ambition shown from the government to address climate change.

Dual challenge of increasing energy needs and reducing emissions:

  • More energy to improve lives, but with fewer emissions to help address climate change — is what we call the dual challenge.

India can play a leading role in addressing the dual challenge:

  • India has the entrepreneurialism, ingenuity and a can-do attitude as well as the tools to reset its energy mix with the low-carbon fuel and power, and reimagine energy.

Ways to achieve this:

  • Developing India’s domestic gas production:
    • Good for economy:
      • There exists huge opportunity with natural gas, in which India has a domestic resource potential of more than 100 trillion cubic feet (Tcf), which includes conventional, unconventional, and yet-to-find gas.
      • This resource base has the potential to meet up to 50% of anticipated demand for gas through to 2050.
      • So, developing India’s domestic gas production will help reduce energy imports, enable more investment and create jobs.
    • Good for environment:
      • Natural gas also has a lower carbon intensity per unit of energy than coal in power generation, and offers significant benefits for air quality.
      • Longer term, natural gas can be used to produce hydrogen, and decarbonised using carbon capture, use and storage (CCUS).
  • Ramping up renewables:
    • There is also a big opportunity in renewables, where there are large untapped solar and wind resources.
    • Cost of renewables is becoming increasingly competitive with fossil fuels.
    • As such, these renewable resources could be further maximised to meet the three to four-fold power demand growth expected in India by 2050.
    • They would progressively displace coal in electricity generation, which is important as coal emits about twice as much carbon emissions than gas.
  • Decarbonising mobility:
    • There is a third opportunity with vehicle electrification and the substitution of liquid fuels with CNG or LNG.
    • Costs of light-duty electric car (on a total cost of ownership basis) could converge with conventional vehicles from 2035, and EVs (two and three-wheeler) are close to cost parity today.
    • CNG is already competitive in medium and heavy-duty vehicles and LNG is attractive for long-distance trucking.
  • Driving digital innovation:
    • India also has opportunity in digital innovation, which could help to optimise the energy system and reduce energy demand by as much as 18% by 2050.
    • There are opportunities in the field of transport, through autonomous vehicles, ride-sharing and intelligent traffic management systems.
    • There are opportunities in buildings (through smart homes), in industry (through connected devices and advanced analytics), in transmission and distribution (though smart grid technologies) etc.

Conclusion:

  • With these initiatives, India could position itself as a leader in the energy transition.
  • India could help address the dual challenge of increasing energy needs and reducing emissions:

Importance:

GS Paper III: EconomySection : Editorial Analysis

Describe the origin and development of thunderstorms with examples. (15 marks)

Approach:

  • Introduce by defining thunderstrorms
  • Explain the origin via the formation of cumulonimbus clouds
  • Describe the 3 stage cycle of thunderstorm
  • Conclude appropriately
Model Answer :

Thunderstorms are local storms characterised by swift upward movement of air and heavy rainfall with cloud thunder and lightning. These are associated with the cumulonimbus  clouds. Atmospheric instability, updraft of potentially unstable air, abundant supply of warm and moist air, thick clouds. etc. are the factors which favour the development of thunderstorms

 

Origin and development of Thunderstorms

Thunderstorms are formed by the uplifting of warm and humid air. There are many factors that lead to the uplifting of air, like solar heating, low pressure troughs, meeting of two different air streams meet or when air is forced uphill.

When humid air is lifted, it gets cooled and the moisture in the air condenses to form cloud. Upon further uplifting, the cloud will extend higher. Water droplets in the cloud continue to grow in size. As the cloud extends further upward, ice crystals may form because of low temperature there. A cumulonimbus cloud results when it grows to a height of 10 to 20 kilometres. Thunderstorms are produced by cumulonimbus clouds.

Example: Air mass thunderstorms normally develop in late afternoon hours when surface heating produces the maximum number of convection currents in the atmosphere.

 

Most thunderstorms developed by a cycle that has three stages:

  1. Cumulus stage
  • Ground is significantly heated due to solar insolation.
  • A low pressure starts to establish due to intense upliftment of an air parcel (convention).
  • Air from the surroundings start to rush in to fill the low pressure.
  • Intense convection of moist hot air builds up a towering cumulonimbus cloud.

 

  1. Mature stage
  • Characterized by intense updraft of rising warm air, which causes the clouds to grow bigger and rise to greater height, as high as tropopause.
  • Later, downdraft brings down to earth the cool air and rain.
  • The incoming of thunderstorm is indicated by violent gust of wind. This wind is due to the intense downdraft.
  • The updraft and downdraft determine the path of the thunderstorm. Most of the time, the path is erratic.

 

  1. Dissipating stage
  • When the clouds extend to heights where sub-zero temperature prevails, hails are formed and they come down as hailstorm. Intense precipitation occurs.
  • In a matter of few minutes, the storm dissipates and clear weather starts to prevail.

Thunderstorms have wide-ranging effects on human life, including electrocution, shock, and even worse, deaths. However they have some positive effects too. For instance, lightning helps produce ozone through electrical excitation of oxygen molecules. It also creates nitrate from nitrogen, which is essential for plants to grow and thrive on earth.

 

Subjects : Geography – Physical

India’s water crisis: All stakeholders must come together Editorial 29th Aug’19 HindustanTimes

Headline : India’s water crisis: All stakeholders must come together Editorial 29th Aug’19 HindustanTimes

Details :

Water stress in India:

  • India is home to 17% of world’s population, but has only 4% of the world’s fresh water resources.
  • At present, 75% of Indian households do not have access to drinking water, and close to 90% of rural households have no access to piped water.
  • India is a water-stressed country, and with 1,544 cubic metre per capita annual availability, we are advancing towards becoming water-scarce.
  • Five of the world’s 20 largest cities under water stress are in India.
  • As per the Economic Survey 2018-19, by 2050, India will be extremely susceptible to water insecurity.

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Economic cost of environmental degradation:

  • There are some other aspects that pertain to the economic cost of environmental degradation that India is faced with.
  • A 2018 World Bank study pegged the cost of environmental degradation to India at approximately $80 billion per year, which amounts to around 5.7% of our GDP.
  • Further, an environment survey of 178 countries ranked India at 155.
  • This is extremely worrying, especially since among the BRIC nations, India ranked last.

Water management crucial for India’s future

  • Water and its management will determine India’s ability to achieve high economic growth, ensure environmental sustainability, and improve the quality of life.

NITI’s Composite water management index (CWMI) tracking States’ efforts:

  • State-led efforts to manage water have been assessed and shared by the NITI Aayog, which has developed the composite water management index (CWMI).
  • States are ranked on the management of water and progress in 28 indicators relating to water management.

Community management of water needed:

  • Community management of water will be crucial if India is to become water secure.
  • For local community driven initiatives, work on community engagement has begun.

Corporations can also play a key role:

  • Corporate sector has been playing a role in driving innovation in many sectors.
  • Given the magnitude of the challenges India faces, there is a growing role for leading enterprises to help meet development targets.
  • In water management, corporations must can a more active role in using their Corporate Social Responsibility (CSR) efforts towards innovation and conservation of water, along with the dissemination of proven practices that help conserve and harness water recharge.
  • Corporations should ensure that their CSR commitment and sustainability initiatives are effective and pervasive enough to make a substantial impact.

Examples of effective initiatives by corporations:

  • There are flag bearers for conservation efforts among Indian and multinational corporations, and their efforts must be emulated across the board.
  • ITC’s integrated water management:
    • ITC’s integrated water management approach has been a successful initiative.
    • Today, ITC’s integrated watershed development programme covers over one million acres spread across 15,000 water harvesting structures, benefiting over 300,000 people in 43 districts across 16 states.
    • This initiative has generated over six million person-days of employment within project villages, reducing levels of distress migration.
    • It is now extended to implement four large-scale river basin regeneration projects for achieving water balance and year-round environmental flows in select sub-basins in Maharastra, Tamil Nadu, Telangana and Madhya Pradesh.
    • Pilot programme on water use efficiency in agriculture:
      • In addition, a pilot programme at scale on “water use efficiency in agriculture” is also being promoted to enable effective demand-side management.
      • This initiative has yielded water savings of 20% to 45% in crops like sugarcane, wheat, rice and banana.
  • Tata’s Water Mission:
    • Tata’s Water Mission aims to provide better access to pure water for six million people spread across 7,000 villages in 12 states, by 2020.
    • Key focus areas are to improve access to safe water and sanitation, and to make a difference through rigorous and technologically advanced interventions.
  • Pepsico’s sustainability agenda:
    • Under its 2025 sustainability agenda, Pepsico is said to aim for a global improvement in water use efficiency in high water risk areas of its direct agricultural supply chain by 15% by 2025.
  • Mahindra Hariyali programme:
    • Mahindra too is doing extensive work under its Mahindra Hariyali programme.
    • As its climate change resistance movement, the initiative is a social upsurge where tree planting is not merely a duty, but, in fact, is termed a celebration.
    • Since 2007, this initiative has achieved a target of planting 16 million saplings. 

Corporations must make water conservation and management their top CSR concern:

  • Many of the CSR activities currently are geared towards water conservation and management.
  • But now they need to make it a top priority rather than one of the many avenues where CSR initiatives are undertaken.

Conclusion:

  • Water is a critical resource and community water management is a must.
  • This will range from corporate engagement to smaller scale community initiatives, to individual efforts.
  • Now, the entire ecosystem must work in a cooperative manner to ensure India’s water conservation efforts are forward-thinking, while leveraging synergies from the State, corporations, and the community as a whole.

Importance:

GS Paper III: EconomySection : Editorial Analysis

Explain the economic critique offered by the early Nationalists to challenge British imperialism and its impact. (15 marks)

 

Approach:

  • Introduce with British justification of colonisation and how early nationalists wanted to bust it
  • Explain various economics arguments given by early leaders like drain of wealth, against military expenditure etc.
  • Discuss its impact in the short term and long term
  • Conclude appropriately
Model Answer :

The British provided a moral argument for India’s colonisation by linking it to White Man’s burden to develop and modernise India. However, moderate leaders like Dada BhaiNaoroji, RC Dutt, MG Ranade etc. gave strong economic arguments to show that British imperialism was only benefiting Britain at the cost of India’s exploitation.

The various economic critiques offered were:

  • Drain of wealth theory: It was the key theme of economic nationalism. The early leaders argued that home charges like payment of salaries and pensions of officers situated in London, guaranteed interest payment on British investments like railways were leading to impoverishment of India. Naoroji calculated it to be 12 million pound sterling per year.
  • Free trade and foreign capital investment: In absence of any protective tariff, India turned into a supplier of agricultural goods and a market for British finished products. This led to “de-industrialisation of India” and India became a dependent agrarian economy.
  • High land revenue: Early nationalist leaders contended that in practice the land revenue was as high as 50 to 60 % which led to land alienation, impoverishment of peasantry and recurring famines.
  • Military Expenditure: Indian army was used in imperial wars in all parts of the world, the cost if which was borne from India. Moderates therefore demanded the military expenditure to be shared evenly by the British government.

With these arguments DadabhaiNaoroji calculated that per capita income of Indians in 1890s to be Rs 20 and he linked this abject poverty to the economic exploitation by British.

Impact of Economic critique

In the short term, moderates could not make much impact but a few areas of success were:

  • The British government agreed to share a fraction of military expenditure to the extent of 1 million pounds.
  • Scientific assessment of land revenue was recommended in Ryotwari Areas.

However, in the long run, it helped in the following ways:

  • The British lost its moral authority to rule India and Indians were convinced of exploitative nature of their rule. This helped in spread of Nationalism in India.
  • By preparing a logical case of exploitation by British, the moderates demanded more Indian involvement in the management of Indian affairs.
  • The economic critique generated anger and mistrust among Indians against the British rule. This anger then paved way for want of Swaraj by the extremists.

Therefore, despite limited successes in the short run, economic nationalism strengthened the mistrust on the intentions of British and created a fertile ground for national movement to grow and subsequently demand self rule.

Subjects : History Modern

PMAY (U) is beneficial both welfare-wise and economically, but its implementation has been slow so far for various reasons. Discuss, along with strategies for the effective implementation of the scheme.

PMAY (U) is beneficial both welfare-wise and economically, but its implementation has been slow so far for various reasons. Discuss, along with strategies for the effective implementation of the scheme.

Approach:

  • Introduce briefly mentioning the PMAY (U) scheme and its benefits
  • Highlight the slowness of the progress and discuss causes briefly
  • Suggest strategies for effective implementation
  • Conclude appropriately
Model Answer :

Pradhan Mantri Awas Yojana (Urban) or PMAY (U) was launched in June 2015 with the target of constructing 2 crore affordable houses by 2022. As well as providing housing to large number of people, it could have potentially significant economic gains, especially in terms of jobs and investment, as well as giving fillip to core construction sectors such as steel and cement.

However, progress on the scheme has been slow. More than 2 years after the launch, about 22 lakh housing units have been approved under PMAY (U), and just 1.4 lakh houses have been completed.

The reasons for slow progress include:

  • Disparities in implementation by states: For example, while only 2% of the grounded houses were completed in Himachal Pradesh as on July 2017, the comparable figures for Madhya Pradesh, Maharashtra and Karnataka are 5%, 25% and 25%, respectively.
  • Low credit flow: The major slowdown in credit flow to the housing sector has thwarted construction activities of many builders.

Measures to hasten the implementation of the scheme:

  1. Overhaul funding mechanisms:
  • The Union Budget 2017-18 has awarded infrastructure status to affordable housing and implemented the real estate Bill (RERA), which should ensure easier access to institutional credit to the builders along with greater transparency.
  • Long-term bonds could be issued by infrastructure and housing finance companies.
  1. Ensuring completion of stalled projects:
  • A suitable process must be put in place through which the government can take over stalled projects and ensure their completion.
  • Alternatively, the government can ensure access to time-bound and outcome-bound credit, raised through sovereign infra bonds, to developers to help them finish projects.
  1. Encourage foreign investment:
  • The government has to take a proactive approach to encouraging foreign participation and investment into the affordable housing sector, which will bring both capital and superior technology for fast and efficient completion.
  1. Find a way out of high land acquisition costs:
  • To minimise land acquisition costs, government could increase floor space index (FSI) and enable vertical construction.
  • The government must also consider better utilisation of its existing land banks and that of other public sector enterprises.

Success in implementation of PMAY (U) needs to be ensured through progress in the measures listed above. It is has huge economic benefits with a potential addition of about 2% to the GDP growth rate and create employment across the value chain.

Subjects : Editorials

Write a note on the factors that led to growth of early nationalism in India. (10 marks)

 

Approach:

  • Introduce with the lead up the the rise of nationalism in 19th century
  • Mention various factors that lead to growth of nationalism in India like exploitation, role of press, nationalism etc.
  • Conclude appropriately
Model Answer :

Indian nationalism grew in the second half of the 19th century partly as a result of colonial policies and partly as a reaction to colonial policies. The 1857 revolt gave an impetus to a new wave of nationalism.

Some of the major factors that led to growth of nationalism include:

  • Colonial Exploitation: Various section of people such as peasants, artisans, workers started realising the exploitative character of the British rule. Early intellectuals like Dadabhai Naoroji and RC dutta educated people about the “drain” of wealth being caused by the British rule.
  • Racism: The racial discrimination practised by the British Administration made Indians conscious of national humiliation and resulted in feeling of oneness while facing British.
  • Impact of western thought: Spread of education and ideas of scholars such Milton, Paine, Voltaire, Rousseau etc have imbibed rational, political and nationalist thought.
  • Role of press and literature: About 169 newspaper in English and vernacular languages were printed that spread various ideas and knowledge.
  • Modernization: Modern transport and communication, with ease of movement of people and trade also played an important role.
  • Political, Administrative and Economic Unification of India: This was done by the British to make it easier for them to rule such a vast country but it also helped the people in identifying the common enemy.
  • Rise of middle class Intelligentsia: They provided intellectual and political leadership.
  • Others: Apart from these, various other reasons like the socio-religious reform movements, cultural revivalism and contemporary international movements also contributed.

The above mentioned factors along with activism of various political organisations including INC have played catalytic role and spread the idea of nationalism. The early nationalism formed the basis for the Indian National Movement that culminated in an Independent India after a long struggle.

Subjects : History Modern

Comment on the significance of Central Asia for India. (10 marks)

Comment on the significance of Central Asia for India. (10 marks)

Approach:

  • Introduce with the civilisational links between C.Asia and India
  • Explain the significance of Central Asia for India (categorize under subheadings like energy, connectivity etc.)
  • Conclude with the need to promote the relationship and the recent Connect Central Asia Policy
Model Answer :

Relations between India and Central Asia are ancient and civilisational. India has been connected closely with Central Asia through the Silk Route. Today, the importance of Central Asia for India is not merely civilisational and historical; it goes much beyond this.

Significance of Central Asia for India:

  • Energy Security: Central Asia contains vast hydrocarbon fields and Uranium reserves. With India projected to continue to be reliant on imported energy, cultivating alternative sources of energy has become a vital concern.
  • Connectivity: The International North-South Transport Corridor (INSTC) connects Europe & Russia to Persian Gulf and India. Kazakhstan, Kyrgyzstan and Tajikistan are part of the project. INSTC will help India to gain smooth access into Central Asia and beyond to Europe, with economic and geopolitical implications (counterbalancing China’s presence and better relations with China).
  • Security: Security considerations form an important aspect of the India-Central Asia relationship. The two regions share the common agenda of maintaining stability in Afghanistan, as well as countering terrorism. India’s recent entry as member of SCO is significant in this regard.
  • Commercial Interests: India’s current trade with Central Asia is minimal at a little over $1 billion, and is miniscule when compared to that of China’s $ 50 billion. Both India and Central Asia have economic complementarity in terms of resources, manpower and markets, which can be leveraged mutually beneficially.

Despite the significance, the relationship between these two regions has not progressed as desired. As a result, India recently formulated the “Connect Central Asia Policy” to reconnect with the region. The new policy aims to expand India’s relations with Central Asia beyond the traditional spheres of economics and energy. It is based on pro-active political, economic and people-to-people engagement with Central Asian countries, both individually and collectively along with greater strategic and security cooperation.

Subjects : Current Affairs