Question Bank

December 27, 2018 @ 2:30 pm
Question Bank

27th December 2018


(2 Questions)

Answer questions in NOT MORE than 200 words each. Content of the answer is more important than its length.

Links are provided for reference. You can also use the Internet fruitfully to further enhance and strengthen your answers.


Q1. Suggest ways to further improve India’s foreign policy.


  • India’s neighbourhood policy is at a critical juncture: while its past policies have ensured a steady decline in its influence and goodwill in the region, the persistent absence of a coherent and well-planned regional policy will most definitely ensure that it eventually slips out of India’s sphere of influence. India’s foreign policy planners therefore need to reimagine the country’s neighbourhood policy.
  • The government’s neighbourhood policy began exceptionally well with Prime Minister reaching out to the regional capitals and making grand foreign policy commitments. But recently, it seemed to lose a sense of diplomatic balance, for instance, when it tried to interfere with the Constitution-making process in Nepal and was accused of trying to influence electoral outcomes in Sri Lanka. While India’s refugee policy went against its own traditional practices, it was found severely wanting on the Rohingya question, and seemed clueless on how to deal with the political crisis in the Maldives.


  • First, let’s briefly examine what should not be done in dealing with a sensitive neighbourhood. For one, India must shed its aggression and deal with tricky situations with far more diplomatic subtlety and finesse. The manner in which it weighed down on Nepal in 2015 during the Constitution-making process is an example of how not to influence outcomes. The ability of diplomacy lies in subtly persuading the smaller neighbour to accept an argument rather than forcing it to, which is bound to backfire.
  • Second, it must be kept in mind that meddling in the domestic politics of neighbour countries is a recipe for disaster, even when invited to do so by one political faction or another. Preferring one faction or regime over another is unwise in the longer term.
  • Third, New Delhi must not fail to follow up on its promises to its neighbours. It has a terrible track record in this regard.
  • Fourth, there is no point in competing with China where China is at an advantage vis-à-vis India. This is especially true of regional infrastructure projects. India simply does not have the political, material or financial wherewithal to outdo China in building infrastructure. Hence India must invest where China falls short, especially at the level of institution-building and the use of soft power. However, even in those areas China seems to be forging ahead. India must therefore invest a great deal more in soft power promotion (and not the Hindutva kind of outreach). To begin with, India could expand the scope and work of the South Asian University (SAU), including by providing a proper campus (instead of allowing it to function out of a hotel building) and ensuring that its students get research visas to India without much hassle. If properly utilised, the SAU can become a point for regional integration.
  • Finally, while reimagining its neighbourhood policy, New Delhi must also look for convergence of interests with China in the Southern Asian region spanning from Afghanistan to Nepal to Sri Lanka. There are several possible areas of convergence, including counter terrorism, regional trade and infrastructure development. China and India’s engagement of the South Asian region needn’t be based on zero-sum calculations. For example, any non-military infrastructure constructed by China in the region can also be beneficial to India while it trades with those countries. A road or a rail line built by China in Bangladesh or Nepal can be used by India in trading with those countries.
  • Going forward, New Delhi must invest in three major policy areas. There needs to be better regional trading arrangements. The reason why South Asia is the least integrated region in the world is because the economic linkages are shockingly weak among the countries of the region. The lead to correct this must be taken by India even if this means offering better terms of trade for the smaller neighbours. While it is true that long ‘sensitive lists’ maintained by South Asian countries are a major impediment in the implementation of SAFTA, or the South Asian Free Trade Area, India could do a lot more to persuade them to reduce the items on such lists. Second, several of India’s border States have the capacity to engage in trading arrangements with neighbouring counties. This should be made easier by the government by way of constructing border infrastructure and easing restrictions on such border trade.
  • India prefers bilateral engagements in the region rather than deal with neighbours on multilateral forums. However, there is only so much that can be gained from bilateral arrangements, and there should be more attempts at forging multilateral arrangements, including by resurrecting the South Asian Association for Regional Cooperation (SAARC).
  • India must have a coherent and long-term vision for the neighbourhood devoid of empty rhetoric and spectacular visits without follow up. We must ask ourselves, as the biggest country in the South Asian neighbourhood, what kind of a region do we want to be situated in, and work towards enabling that.


Q1. The NITI Aayog’s ‘Strategy for New India @ 75’ provides a way for growth of Indian economy but it also needs to focus on the direction and quality of growth. Comment


  • The NITI Aayog’s ‘Strategy for New India @ 75’ affirms that “policymaking will have to be rooted in ground realities” rather than economic abstractions. The intent to change the approach to planning from preparations of plans and budgets to the creation of a mass movement for development in which “every Indian recognises her role and experiences the tangible benefits” is laudable. It says that stakeholders have been consulted widely in preparing the strategy, which is also something that the erstwhile Planning Commission said.
  • The strategy emphasises the need to improve implementation of policies and service delivery on the ground, which is what matters to citizens. Its resurrection of the 15 reports of the Second Administrative Reforms Commission and recommendation that they must be implemented vigorously are welcome.
  • Employment and labour reforms, the second chapter in the strategy, have rightly been given the highest priority, which was not the case in the previous plans. Overall growth is also emphasised by NITI Aayog: “Besides having rapid growth, which reaches 9-10 per cent by 2022-23, it is also necessary to ensure that growth is inclusive, sustained, clean and formalised.” However, it is the shape of growth that matters more than size. The employment-generating capacity of the economy is what matters more to citizens than the overall GDP growth rate. There is no joy for citizens if India is the fastest-growing economy and yet does not provide jobs and incomes.
  • The growth of industry and manufacturing is essential to create more employment, and to provide bigger opportunities to Indians who have been too dependent on agriculture so far. Here, too, it is not the size of the manufacturing sector that matters but its shape. Labour-intensive industries are required for job creation. If the manufacturing sector is to grow from 16% to 25% of the GDP, which the strategy states as the goal, with more capital-intensive industries, it will not solve the employment problem. The strategy does say that labour-intensive industries must be promoted, but the overall goal remains the size of the sector. What one measures, one manages. Therefore, the goal must be clearly set in terms of employment, and policies and measurements of progress set accordingly. Indian statistical systems must be improved quickly to measure employment in various forms, formal as well as informal.
  • The strategy highlights the urgency of increasing the tax base to provide more resources for human development. It also says financial investments must be increased to strengthen India’s production base. Managing this trade-off will not be easy. If tax incentives must be given, they should favour employment creation, not more capital investment.
  • A big weakness in the Indian economy’s industrial infrastructure is that middle-level institutions are missing. Rather than formalising small enterprises excessively, clusters and associations of small enterprises should be formalised. Small enterprises cannot bear the burden of excessive formalisation — which the state and the banking system need to make the informal sector ‘legible’ to them. Professionally managed formal clusters will connect the informal side of the economy with its formal side, i.e. government and large enterprises’ supply chains. NITI Aayog’s plan for industrial growth has very rightly highlighted the need for strong clusters of small enterprises as a principal strategy for the growth of a more competitive industrial sector.
  • It recommends complete codification of central labour laws into four codes by 2019. While this will enable easier navigation for investors and employers through the Indian regulatory maze, what is required is a fundamental reorientation of the laws and regulations — they must fit emerging social and economic realities. First, the nature of work and employment is changing, even in more developed economies. It is moving towards more informal employment, through contract work and self-employment, even in formal enterprises. In such a scenario, social security systems must provide for all citizens, not only those in formal employment. Indeed, if employers want more flexibility to improve competitiveness of their enterprises, the state will have to provide citizens the fairness they expect from the economy. The NITI Aayog strategy suggests some contours of a universal social security system. These must be sharpened.
  • Second, in a world where workers are atomised as individuals, they must have associations to aggregate themselves to have more weight in the economic debate with owners of capital. Rather than weakening unions to give employers more flexibility, laws must strengthen unions to ensure more fairness. Indeed, many international studies point out that one of the principal causes of the vulgar inequalities that have emerged around the world is the weakening of unions. The NITI Aayog strategy mentions the need for social security for domestic workers too. This will not be enforceable unless domestic workers, scattered across millions of homes, have the means to collectively assert their rights.
  • Third, all employers in India should realise that workers must be their source of competitive advantage. India has an abundance of labour as a resource, whereas capital is relatively scarce. Human beings can learn new skills and be productive if employers invest in them. Employers must treat their workers — whether on their rolls or on contract — as assets and sources of competitive advantage, not as costs.
  • The shape of the development process matters more to people than the size of the GDP. Development must be by the people (more participative), of the people (health, education, skills), and for the people (growth of their incomes, well-being, and happiness). How well India is doing at 75 must be measured by the qualities of development, as experienced by its citizens, along these three dimensions. GDP growth will not be enough.

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