Optionals IAS Mains Economics: Questions 190 - 193 of 216

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Question 190

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Appeared in Year: 2019 (IEcoS)

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Essay▾

Are investment decisions based on commercial judgements superior to allocation of resources through planning on the basis of preconceived notions of social desires? Elaborate your answer comparing the July 1991 industrial policy to the earlier policies. Is this change beneficial for the Indian economy? Discuss.

Explanation

  • Yes. Investment decisions based on commercial judgements are superior to allocation of resources through planning on the basis of preconceived notions of social desires (in my opinion) . Because commercial judgements are highly based on circumstances or events that are already happened or data whereas planning has many drawbacks and is not based on…

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Question 191

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Appeared in Year: 2019 (IEcoS)

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Essay▾

Examine the nature of reserve army of labour in India after the adoption of the neo-liberal policies. Do you think that India will continue to be an informal economy in near future? Give reasons for your answer.

Explanation

  • The neoliberal policies is an economic ideology that aims at privatization. That is the role of the government is reduced in the economy and move towards a market oriented economy (capitalism) . The only role of the government is to ensure freedom of the individual at any cost. Classical liberalism (laissez faire policy leads to unregulated market)…

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Question 192

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Appeared in Year: 2019 (IEcoS)

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Essay▾

Critically examine the rationale of the withdrawal of a significant volume of currency in circulation in India in the recent past. Do you think that this temporary shock will lead to deeper and long-term recession in the economy? Give reasons for your answer.

Explanation

  • Demonetization withdraws the legal tender status of 500 and 1000 notes in the year 2017 November 8. This is actually done
    • To tackle the black money in circulation. (This black money is the major source for terrorism, smuggling etc. by tracking and ending this will help to curb the above mentioned problems also)
    • To reduce the circulation of cash and t…

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Question 193

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Appeared in Year: 2019 (IEcoS)

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Essay▾

Analyse the cause of India՚s balance of payments problem before 1990s. How was fiscal deficit linked to the balance of payments crisis? Examine the measures taken by the government of India in correcting these twin deficits.

Explanation

BoP is the annual financial statement shows the transaction between a resident of home country and resident of other countries. The main causes of BoP problem before 1991 are

High current account deficit.

  • Balance of payment = current account + capital account.
  • Current account is again divided into two.
    • Trade/Merchandise account
    • Invisible account.
  • There i…

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