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1 March 2017 Question Bank


Ist  MARCH 2017 


(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.


1. The idea of a universal basic income (UBI) has been gaining ground globally. Should it be introduced in India? Discuss its pros and cons.

Universal Basic Income (UBI) Globally:

  • The idea of a universal basic income (UBI) has been gaining ground globally.
  • While Switzerland held a referendum on it in 2016 (it was voted down), Finland introduced it in early January 2017.
  • India’s flagship Economic Survey 2017 has endorsed the UBI, setting the stage for its introduction.
  • In the West, the UBI is being discussed as a solution to two problems:

1.      unemployment due to automation; and

2.      growing social unrest caused by extreme inequality and precarity.

  • It is expected to solve the unemployment problem by decoupling subsistence from jobs, freeing human beings to realise their true potential, preferably through entrepreneurship. It would address the second by supplying monetary resources to access the necessities of life. This, in a nutshell, is the popular understanding of the UBI. The reality, however, is not so rosy.

The UBI evangelists:

  • The most eloquent advocates of UBI today are free-market enthusiasts — the same lot branded as neo-liberals for their advocacy of deregulation, privatisation, and cuts in welfare spending.
  • Their guru, Milton Friedman, was an early advocate of basic income.
  • Outside the academic realm, the biggest champion of UBI is the global tech sector.
  • Silicon Valley billionaires such as Elon Musk, the founder of Tesla Motors, and Facebook co-founder Chris Hughes have publicly backed the idea.
  • Invariably, they all present the same conclusion: giving cash to the poor is better than traditional welfare 

A redistributive UBI:

  • It is indeed possible to have a redistributive UBI.
  • But it would need to fulfil two conditions:

1.      it must be funded by taxing the wealthy; and

2.      the existing entitlements to the poor must not be taken away.

  • Such a UBI would actually be a socialist measure that would increase the bargaining power of the working classes by giving them an income cushion.
  • But neither of these conditions is met by any of the UBI designs being promoted today, either globally or in India.
  • The much-touted Finnish experiment is restricted to the unemployed. It does not cover all working individuals. And it only replaces the already existing basic unemployment allowance and labour market subsidy — it is not an add-on benefit.

What constitutes a basic income?

  • The actual minimum wage in India is around Rs 4,800 per month.
  • While different numbers have been bandied about, there seems to be a broad consensus around the Tendulkar committee poverty line of Rs 33 a day. This works out to a basic income of Rs 1,000-Rs 1,250 a month or Rs 12,000-Rs 15,000 a year.
  • But even this modest figure is estimated to cost 11-12% of the GDPIn contrast, all the government’s subsidies put together account for only 4-4.5% of the GDP.

JAM trinity:

  • The Jan-Dhan Yojana set out to make every Indian accessible to global finance.
  • The Aadhaar card set out to make every Indian identifiable and enumerable as data — the currency of global tech.
  • The high mobile penetration has connected every Indian to the global digital network.
  • An element that was missing was consumer behaviour, which the recent demonetisation sought to address, by force-feeding ’cashless’ to a cash-dependent population.
  • The UBI fits perfectly in this scheme of things, as it seeks to compress the whole gamut of welfare benefits into one, and mount it on a singular JAM (Jan-Dhan, Aadhaar, Mobile) platform.

Direct Cash Transfer:

  • Back in 2008, in an influential paper in the Economic and Political Weekly titled ’The case for direct cash transfers to the poor’, Arvind Subramanian, the present Chief Economic Adviser of the government, along with economists Devesh Kapur and Partha Mukhopadhyay, argued that the Rs.1,80,000 crore spent annually on centrally sponsored schemes and assorted subsidies should instead be distributed as cash directly to 70 million households below the poverty line. Put simply, the UBI in India is nothing but the old wine of direct cash transfer in a fancy new bottle.
  • Its objective remains the same: to eliminate the public distribution system (PDS) and with it, the food, fuel, and fertiliser subsidies.
  • It would result in the elimination or a significant roll-back of programmes such as the PDS, midday meal schemes, and the Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS).

A case against direct cash transfers:

  • Economists such as Jean Dreze have convincingly argued against direct cash transfers.
  • There is immense pressure on India in secretive free trade negotiations.
  • The developed nations have for long wanted India to wind up its food security-related provisions — both state procurement of foodgrains, and their subsidised distribution via PDS.
  • A UBI would pave the way for the elimination of these measures, dealing a death blow to food security and deepening farm distress.
  • Another is that the Indian state is stuck with welfare commitments it cannot renege on without political and legal consequences.
  • The efficiency/inefficiency argument for scraping PDS and MGNREGS never acknowledges that these are rights-based social entitlements with specified outcomes — and that is not accidental.
  • Shifting the welfare paradigm to UBI would loosen the bonds of legal and social accountability.
  • Under the PDS, for instance, the state must provide a specified quantity of foodgrains to the poor no matter what.
  • With UBI, it has the option letting the payout slide behind inflation, as has already happened with the old age and widow pensions.




Q2. What is the significance of 2015 Framework Agreement on the Naga issue? Critically examine how this agreement will impact the northeastern region.

The Naga Peace Accord, a framework agreement as it has been termed, signed between the National Socialist Council of Nagalim-Isak-Muivah (NSCN-IM) and the Government of India on August 3 is significant for several reasons.

Firstly, it shows the flexibility and realism of the NSCN-IM in terms of the willingness to alter the goals, from complete sovereignty and Greater Nagalim to acceptance of the constitutional framework albeit with a provision for the grant of greater autonomy to the Naga inhabited areas outside of Nagaland through the establishment of autonomous district councils. This indeed had been a sticking point in negotiations as Arunachal Pradesh, Assam and Manipur had categorically stated their opposition to any territorial division. It is pertinent to note here that a similar proposal called the ’supra-state structure’was offered by the Government of India’s negotiators in 2011. This involved the grant of greater autonomy for the Naga areas without a territorial division of the other states involved. But opposition from the Manipur Chief Minister, Ibobi Singh, meant that an agreement could not be signed.

Second, the signing of the accord at this moment in time discloses that the platform of social support for the NSCN-IM comprising of Naga civil society groups are insistent on a peaceful path to conflict resolution. Since November 2014, after Prime Minister Narendra Modi during his visit to Nagaland promised a peaceful settlement with the NSCN-IM within 18 months, Naga civil society groups like the Forum for Naga Reconciliation, Naga Hoho, Eastern Naga Peoples’ Organisation, Naga Mothers’ Association, Naga Students’ Federation and the specific Hohos of the 14 Naga tribes have been regularly holding consultations with the NSCN-IM and the government’s interlocutor, R. N. Ravi on arriving at a settlement at the earliest. The accord arrived at now ends the ceasefire process in existence since 1997 and locks in the NSCN-IM’s commitment to a peaceful dialogue. The urgency to get a peace deal breakthrough had risen in the backdrop of the rival NSCN-K abrogating its ceasefire with the Government of India on March 27, 2015, and following it up with the June 4 ambush in Manipur that killed 20 military personnel.

Third, the leaders of the NSCN-IM, Thuinga-leng Muivah and Isak Chisi Swu (who has been unwell for some time now), have been forthcoming since 2011 to sign a framework agreement that pledges to preserve the culture, history and traditions of the Nagas and grants greater autonomy to the Naga inhabited areas outside of Nagaland.

Fourth, Modi’s own promise to resolve the Naga conflict within an 18 month-timeframe must have been a factor in the signing of the framework agreement. While the accord has been welcomed by many quarters, the actual response will be known only once the terms of agreement are publicly disclosed. In fact, the secrecy behind the terms of agreement has raised several questions from various stakeholder factions and only time will reveal how they all respond and react to the agreement.

Another fact that sets this accord apart from all others signed earlier is the timing. The geo-political situation today is vastly different from what prevailed in the region over the last six decades. Today, the Indian Government has established far closer economic and diplomatic relations with China, a country that has had a history of offering overt and covert support to various insurgent factions operating in the North-East.

Impact on North East

1). "ACT east policy" of the GOI, will get a boost and thereby India shall get gateway to south-east asia through Developmental activities like  Kaladan Multi-Modal Transit Transport Project will get a boost  and in turn shall improve the employment opportunities and healthcare facilities. Tourism will also get a boost in the North East region.

2).  NSCN has been the largest group in Nagaland. With them signing the accord, it will bring peace due to reduced insurgency.

3). However ,as the details of this agreement is still not out in the public domain it has created suspicion in people of the states like Manipur and Arunanchal. The majority non-Naga population in these states (such as Meities in Nagaland) are worried about their territorial integrity.

4). The agreement has created differences among various Naga political groups such as NSCN(K) Khaplang faction, UNC (United Nagaland council) who were not party to the agreement. They are still resorting to the violent means of protest and recent economic blockade of Manipur is an example of that.

5). Election outcomes - One of deciding factors of Manipur elections this year.

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