20 Feb 2023
GS Paper 3
Question 1: The strategic economic reforms of 1991 revitalized the Indian economy during a crisis of balance of payments. In the current era, India requires more robust regulation to protect its economy from internal and external financial shocks and crises. Discuss. (250 words)
Question 2: What is corporate sector responsibility? How far has it achieved its intended goal? (150 Words)
- Give a brief introduction about the economic reform of 1991.
- Write about the requirement of robust regulations to protect the Indian economy from internal and external shocks.
- Write a holistic and appropriate conclusion.
- In 1991, India faced a severe economic crisis due to a balance of payments deficit, leading to a depletion of foreign exchange reserves and a sharp decline in economic growth.
- To address the crisis, the Indian government implemented a series of strategic economic reforms aimed at liberalizing the economy and reducing government intervention.
- These reforms, which included measures such as devaluation of the currency, reduction of trade barriers, and privatization of state-owned enterprises, revitalized the Indian economy and set it on a path of sustained growth.
- The impact of these reforms on India's economy and their legacy continues to be debated and analyzed by economists and policymakers around the world.
- Need of Robust Regulation:
- In the current era, India is one of the world's fastest-growing economies, with a rapidly expanding middle class and a burgeoning entrepreneurial ecosystem. However, the Indian economy remains vulnerable to internal and external financial shocks and crises. To safeguard against such risks, India requires more robust regulation across various sectors of the economy.
- One area where stronger regulation is needed is the financial sector. India's banking system has been plagued by a high level of non-performing assets (NPAs) in recent years, which has led to liquidity constraints and weakened the banks' ability to lend. To address this issue, the Indian government has taken steps to strengthen the regulatory framework, including the implementation of the Insolvency and Bankruptcy Code, and the consolidation of public sector banks. However, more needs to be done to ensure that banks and other financial institutions are adequately regulated and supervised.
- Another area where stronger regulation is needed is the labor market. India's labor laws are complex and often restrictive, which can deter investment and hinder job creation. To promote economic growth and employment, India needs to undertake comprehensive labor market reforms, including simplifying and modernizing labor laws, and improving social security benefits for workers.
- Finally, India needs to strengthen its trade and investment policies to protect against external shocks and crises. With the global economy becoming increasingly interconnected, India needs to ensure that its trade policies are aligned with global standards, and that its investment policies are transparent and conducive to foreign investment.
India's economic reforms have transformed the country into a global economic powerhouse, more needs to be done to safeguard against internal and external financial shocks and crises. Stronger regulation across various sectors of the economy, including the financial sector, labor market, and trade and investment policies, is essential to ensure sustained economic growth and development.
- Give a brief introduction about Corporate Sector Responsibility.
- Write about India's achievement in Corporate Social Responsibility (CSR).
- Write a holistic and appropriate conclusion.
- Corporate sector responsibility, also known as corporate social responsibility (CSR), refers to the idea that businesses have a responsibility to operate in a way that benefits society and the environment.
- The Companies Act, 2013 in India makes corporate social responsibility (CSR) mandatory for certain companies.
- This can include practices such as ethical sourcing, reducing environmental impact, supporting local communities, and promoting diversity and inclusion.
- The aim of corporate sector responsibility is to ensure that businesses are not solely focused on maximizing profits but are also actively working to contribute to the greater good.
- India's achievement in corporate social responsibility:
- India's corporate social responsibility (CSR) framework was introduced in 2014, requiring companies meeting certain criteria to spend 2% of their average net profit on CSR activities. Since then, many Indian companies have made significant efforts to contribute to various social, environmental, and economic causes. Some examples of India's achievements in CSR include:
- Environmental sustainability: Many companies have taken steps to reduce their carbon footprint, conserve energy, and promote clean energy. For example, the Tata Group has invested heavily in renewable energy, while Reliance Industries has launched several initiatives to reduce its greenhouse gas emissions.
- Education and skill development: Many companies have invested in education and skill development programs, especially in rural areas. For example, Infosys Foundation has funded several programs to promote computer literacy, while ITC has established several vocational training centers.
- Health and sanitation: Several companies have launched initiatives to promote health and sanitation in rural areas. For example, Hindustan Unilever has implemented several water conservation projects, while Wipro has launched a program to improve maternal and child health in rural areas.
- Disaster relief and community development: Many companies have contributed to disaster relief efforts and community development initiatives. For example, the Adani Foundation has implemented several projects to improve the living conditions of tribal communities, while the Mahindra Group has contributed to relief efforts during natural disasters.
- Women's empowerment and gender equality: Several companies have launched initiatives to promote women's empowerment and gender equality. For example, ICICI Bank has launched a program to promote financial inclusion for women, while Hindustan Unilever has launched several initiatives to promote gender diversity in the workplace.
- Philanthropy: Several Indian business leaders have made significant contributions to philanthropic causes. For example, Azim Premji, the founder of Wipro, has donated a significant portion of his wealth to education and healthcare initiatives, while Ratan Tata, the former chairman of Tata Sons, has established several philanthropic organizations to promote social development.
India's CSR framework has encouraged many companies to take a more proactive approach to social and environmental responsibility, leading to significant progress in various areas. However, there is still a long way to go in addressing pressing social and environmental challenges and promoting sustainable and inclusive development. The concept of CSR has gained more prominence in recent years, with many companies incorporating social and environmental responsibility into their business strategies. However, there is still room for improvement, and many stakeholders are pushing for companies to do more to address pressing global challenges such as climate change, inequality, and human rights.