IASCLUB Synopsis : 20 June 2019

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1.Industrial clusters have grown and come to stay as hubs of business activity in India. Discuss the factors responsible for the development of industrial clusters in India?  (GS Paper-1, Human Geography) (250 words)

Structure of the Answer

·         Introduction: Discuss about industrial clusters in India

·         Explain the role of such cluster in economic development with example

·         Point out the factors responsible for cluster development

Reference- NCERT

Model Answer:

In the present times, industrial clusters have become the new mantra for economic development. It is now over a decade since SME clusters, that are regional concentrations of small and medium-scale enterprises involved in similar kinds of economic activities, have ceased to be a popular topic of academic research and have become areas of great attention for policy makers and practitioners in the field of economic development.

Industries tend to concentrate in certain locations because of favourable location factors. Industrial clusters are identified on the basis of number of units, number of workers, quantum of input and output produced and power used. There are certain common and unique factors responsible for the development of industrial clusters.

Cluster development is attributable to several factors, including technology transfer, knowledge transfer, development of a skilled work force in related industries, the benefits of agglomeration economies, and social infrastructure. An example might be a localized knitwear and garment industry, which includes within a small geographical area knitting firms, cloth-finishing, dyeing and printing units, garment producers, merchant buyers and exporters, and also producers of specialized inputs such as threads, buttons, up to textile machine suppliers.

Historical reasons: Historically, many clusters emerged during British era itself. For example – Mumbai-

Pune and Kolkata-Hooghly clusters

Access to raw material: Weight-loosing industries are located near the source of raw material. For example the installation of steel plants in Jameshedpur and Bokaro etc in the Chotanagpur region, Cotton mills of Bombay and Jute mills of Kolkata were developed due to this reason only.

Power: One of the major reasons is the availability of power. For example, Chottangapur regions is close to DVC project, Mumbai-Pune region is close to Tarapore, Trombay, Rawatbhatta, Narmada dam etc, Bangalore-Chennai Industrial Region is dependent on the Pykara power plant, Neyveli etc. .

Capital: Initial capital favoured only port areas – Mumbai, Kolkata and Chennai and thus these are the oldest industrial clusters. Chotanagpur region also received large amount of government investments. After liberalization, flow of capital diversified to other regions.

Agglomeration effect: Clusters start with one type of industries and gradually other ancillary industries evolve around it. For example, in Mumbai chemical industry developed around the cotton textile industry,. This process was further intensified by the opening of the Bombay High petroleum field and construction of nuclear energy plants.

Transport and communication links: Industrial clusters cannot survive without transport linkages. All clusters are located at big railway junctions for the internal movement of goods. Mumbai, Hugli and Chennai clusters are dependent on the sea links.

Besides major industrial clusters, there are several Small Scale Industrial (SSI) clusters. It is estimated that 400 modern SSE and 2000 rural and artisan based clusters exist in India. These contribute up to 60 percent of India’s manufactured exports. For example, the knitwear cluster of Ludhiana, Gems and Jewellery clusters of Surat and Mumbai, clusters of Chennai, Agra and Kolkata for leather and leather products.

2.Discuss the reasons for mounting backlog in court cases, which hamper the justice delivery system.                                                                                                                                                                                                (GS Paper-2, Polity) (250 words)

Structure of the Answer

 ·         Introduction on pendency of court cases

·         Discuss the reasons of backlog in court cases

·         Briefly conclude with possible solutions

Reference– Current Affairs

Model Answer:

Courts in India is burdened with over 3.3 crore pending cases and this number is increasing. More than two thirds of the pending suits are criminal cases, showing a lack of effective prosecution and early disposal.

Large numbers of pendency of criminal cases are worrisome for two reasons. Firstly, it denies the access to justice to a large number of victims of crime. Secondly, because of slow progress of the criminal cases, a large number of under-trial prisoners continue to languish in jails, sometimes, they end up spending more time in jail as under-trials than the prescribed term of imprisonment for the crime they have been accused of committing.

Reasons for Judicial backlog:

 Understaffing

  • Inadequate judge to population ratio – 15 per million based on sanctioned strength. The ground availability is even less.

 Inadequate physical infrastructure

  • Absence of use of ICT in courtrooms and court complexes.
  • Lack of computerization of records.

 Operational Issues:

  • Improper case management – does not take into consideration the expertise and specialization of judges while assigning the cases resulting in inefficiency, petty cases like traffic challans etc. can be dealt by outside institutions.
  • Provision of Adjournments: These deals are granted only when the courts deem it necessary or advisable for reason to be recorded. However, these conditions are not strictly followed and the bad practice continues not only by litigants but also by sitting judges.
  • Vacation for Courts
  • Complexity and rigidity of procedural laws
  • Rotation of Benches

 Role of Lawyers- take adjournments on frivolous grounds, do not prepare their cases resulting in inefficiency, frequent strikes etc.

 Lack of judicial accountability gives comfort to judges that ultimately lead to delay in deciding the matters. No performance metric which focuses on time bound delivery of justice.

 Excessive filing of Public Interest Litigation cases resulting in lesser time to hear and decide upon regular cases.

 Gram Nyayalayas and Family Courts should be set up for quick delivery of petty cases. ICT enablement of courts can also speed up the judicial process. Courts should fill up vacancies in the High Courts.

3.How does a central bank like the RBI generate profits or surplus?    (GS Paper-3, Economy) (150 words)

Structure of the Answer 

·         Introduction

·         Explain the process of earning money by RBI

·         Discuss the profit of RBI by highlighting the earning and expenditure of RBI

Reference– NCERT

 Model Answer:

The Reserve Bank of India (RBI) is India’s central banking institution, which controls the issuance and supply of the Indian rupee. The RBI plays an important part in the Development Strategy of the Government of India. The surpluses of RBI have come to occupy a very important position in managing the Centre’s fiscal balances.

RBI earns money by virtue of being the custodian of forex reserves and conducting monetary policy operations.

  • As forex reserves finally reside with the central bank, they are invested in safe avenues and earn an income. Similarly, the Government Securities (G-Sec) held by RBI are used to draw liquidity out of the system when required for OMOs (sale) earn revenue for the central bank.
  • Further, when RBI conducts the repo and term repo operations when liquidity conditions are tight, banks pay them interest at the repo-related rate.
  • Hence, the central bank runs a very profitable balance sheet as the liabilities do not quite exist and can be created by a fiat. Assets earn income from banks and the government and the surplus gets transferred to the Budget as surplus.

So, how does a central bank like the RBI generate profits (or surplus)?

A central bank’s income typically comes largely from

  1. The returns it earns on its foreign currency assets, which could be in the form of bonds and treasury bills of other central banks or top-rated securities, deposits with other central banks, the interest it earns on its holdings of local rupee-denominated government bonds or securities;
  2. When lending to banks for very short tenures (such as overnight); and
  3. Management commission on handling the borrowings of state governments and the central government.

The RBI buys these financial assets against its fixed liabilities such as currency held by the public, and deposits issued to commercial banks on which it does not pay interest.

A central bank’s expenditure is mainly on

  1. the printing of currency notes and on staff;
  2. on commissions to banks for undertaking transactions on behalf of the government across the country, and to primary dealers, including banks, for underwriting some of these borrowings.

The central bank’s total costs, including expenditure on printing and commissions, is only about a seventh of its total net interest income — which implies that it generates a large surplus.

4.Discuss the different mechanisms for citizens’ participation in the governance process?   (GS Paper-4, Ethics) (250 words)

Structure of the Answer

 ·         Introduction

·         Discuss importance of citizen’s participation in governance

·         Point out different mechanisms of citizens’ participation in the governance

Reference: Lexicon’s Ethics

Model Answer:

Citizens have a legitimate role in influencing decision making processes that affect their lives and businesses. Role of citizens have changed radically from non-participation to tokenism to full participation.

The three essential aspects of good governance and development i.e. transparency, accountability and responsiveness of the administration can be achieved only through citizen’s participation which was acknowledged by the “Citizens’ Charters” initiative which is a response to the quest for solving organizational problems providing public services.

Following are the different mechanisms for citizen’s participation in the development process:

 Seeking information –Availability of information is the first step to empower citizens. RTI act is one of the success stories of India’s democracy which has brought transparency and citizens.

 Giving suggestions – government must reflect the voice of citizens. Citizens are in the best position to articulate their needs and suggest the appropriate solutions. It can be done through public hearings and surveys etc.

 Demanding better services – government servants should be accountable to citizens. Citizens have right to demand for better services.

Holding service provider accountable – the criteria of customer satisfaction requires citizens to voice their grievance. The mechanisms used could include citizens’ feedback and surveys, citizens’ report card and social audit. Right to education act and mid-day meal scheme have option of social auditing. Last government released its report card. Regular citizens’ feedback and survey and citizens report cards should therefore be evolved by all departments.

 Active citizens’ participation in administration/decision making – this is a more mature and intensive form of citizens’ participation through which they can negotiate with for better policy, better plans, better projects etc. Gram Sabha is the best example of such participation. Government recently institutionalized keeping bills and rules for public suggestion for a period of one month.

However there are certain challenges and issues like lack of institutionalization of citizen’s participation, willingness as well as ability of locals etc. that hinder citizen’s participation in governance.

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