Synopsis Sep 25
GS1:
What is Marshall Plan? Under what circumstances it was launched? What was the response of the communist regime to the Marshall Plan? Elucidate.
General approach:
- Discuss Marshall Plan and under what circumstances it was launched.
- Explain the response it received from the communist regime.
Points to be considered:
- Marshall Plan: The Marshall Plan was a U.S.-sponsored program implemented following the Second World War to aid European countries that had been destroyed as a result of the war.
- The plan focused on modernizing both business and industrial practices across Europe, while reducing trade barriers between European nations and the United States. As bonus it would help them limit the spread of communism.
- Circumstances: After World War II in 1947, Western Europe was in an economic downfall: these countries within it were deteriorating, and the spread of communism was on the rise.
- The Marshall Plan successfully sparked economic recovery, meeting its objective of ‘restoring the confidence of the European people in the economic future of their own countries and of Europe as a whole.
- The Soviet Union, however, viewed the Marshall Plan as an attempt to interfere in the internal affairs of other states and refused to participate. They found it as a way to exploit East European raw material resources for the rehabilitation of Western Europe. They saw it as a step directed toward the establishment of West European bloc as an instrument of American policy.
GS2:
What is regulatory arbitrage? What are the reasons behind it? How should a conflict in jurisdiction among regulatory bodies be resolved so to reduce the incidences of regulatory arbitrage? Explain.
General approach:
- Straight off define regulatory arbitrage.
- Discuss the reasons/factors behind it.
- Cite measures to resolve the conflict among the regulatory bodies.
Points to be considered:
- Regulatory arbitrage: when financial firms take advantage of loopholes in regulatory systems to avoid certain types of regulation. This can be achieved by conducting business, creating products and services in certain locations that are outside the purview of regulators.
- It is a perfectly legal planning technique used to evade taxes, manipulate the accounting rules, avoid disclosure requirements, and reduce regulatory costs. Regulatory arbitrage undermines the efficiency of regulatory competition, shifts the incidence of regulatory costs, and leads to a lack of transparent and accountable rule of law.
- Reasons: institutions trying to avoid complying with stringent regulations, indulging in cross border tax arbitrage by means of routing deals through special purposes vehicles and shell companies, to avoid or reduce regulatory costs involved in transactions; Governance regulation is also one of the primary reasons for regulatory arbitrage where institutions prefer to shift the regulatory regime and go to a less regulated or loosely regulated market; exploitation of regulatory inconsistencies, non uniformity in regulations etc.
GS3:
In the light of the PPP model not being as effective, what are the other models of infrastructure financing that should be undertaken? Describe their pros and cons.
General approach:
- Discuss some of emerging models of infrastructure financing along with their pros and cons. One can use tabular representation for the same.
- Emphasize on revitalizing PPP model as recommended by Vijay Kelkar committee.
Points to be considered:
- Other models of infrastructure financing includes: Hybrid Annuity Model, Swiss Challenge model, Build, Operate and Transfer (BOT) Annuity Model, EPC (Engineering, Procurement and Construction).
- The Build Operate and Transfer (BOT) Annuity Model
Under BOT annuity, a developer builds the highway, operates it for a specified duration and transfers it back to the government. The government starts payment to the developer after the launch of commercial operation of the project. Payment will be made on a six month basis.
- Engineering, Procurement and Construction (EPC) Model
Under this model, the cost is completely borne by the government. Government invites bids for engineering knowledge from the private players. Procurement of raw material and construction costs are met by the government. The private sector’s participation is minimal and is limited to the provision of engineering expertise. A difficulty of the model is that financial is the high financial burden for the government.
- The Hybrid Annuity Model (HAM)
In India, the new HAM is a mix of BOT Annuity and EPC models. As per the design, the government will contribute to 40% of the project cost in the first five years through annual payments (annuity). The remaining payment will be made on the basis of the assets created and the performance of the developer. Here, hybrid annuity means the first 40% payment is made as fixed amount in five equal installments whereas the remaining 60% is paid as variable annuity amount after the completion of the project depending upon the value of assets created.
GS4:
What are values? What do you think has been the most influential source of inculcating of values in you? Comment.
General approach:
- Define values along with its importance briefly.
- Write about the influential source in your life which can be mythology, ancient sculptures, home/ school teachings, immediate environment/society.
- Also, give some light on the values inculcated.
Current Affairs Questions:
Q: Structural reforms and not mere fiscal stimulus is the answer to India’s worsening economic slowdown. Analyse the reasons for declining economic growth and what policy and monetary measures can be taken to mend weakening economy.
General approach:
- Introduce what are structural measures and their importance to answer India’s worsening economic slowdown.
- Discuss the reasons for declining economic growth.
- Explain the policy and monetary measures required.
Points to be considered:
- Reasons: recent ones like GST, Demonetization; huge NPA, delayed investment projects, stagnating progress wrt labor reforms, land acquisition etc.
- Measures: investor friendly procedure, reducing red-tapism, improving our ports and expanding their carrying capacities, Skill development and certification, boosting indigenous production, creating more medi-parks, defense parks; Agriculture modernization and eliminating disguised employment, etc
Q: As the floor test remains the sole and supreme means of ascertaining majority in Indian Democracy, the partisan element of Speaker disqualifying defecting member of the house should be taken out of anti-defection law, and the adjudicatory power be transferred to an independent body such as the Election Commission. Critically Comment.
General approach:
- Explain the constitutional provisions under schdule10 and the powers of speaker to disqualify defecting member.
- Discuss the some of the recent incidences of misuse of theses powers.
- Also, discuss the reasons for the powers to be remained with the speaker.
- Finally, conclude your answer.
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