Displaying 4 of 4 records

Title: Resolving India’s banking crisis

Issue: Non-performing Assets

Syllabus: General Studies-III - Indian Economy - Economic Development - Mobilization of resources, Financial Intermediation (Banking, Insurance, Capital Markets, External resources)

Context: The credit growth in India has been seriously affected because of the rising issue of Non-performing assets (NPA). Mechanisms need to be put in place to tackle this challenge effectively


  1. What is NPA? Banks usually categorize loans as nonperforming after 90 days of nonpayment of interest or principal, which can occur during the term of the loan or at maturity
  2. Origin of the NPA crisis in India: India posted a tremendous growth in the early part of the 21st century. This resulted in increased income, increased savings in the economy. Mobilization of the money by banks also increased. However, banks lent money in an irresponsible manner which was primary one of the reasons for rising NPA.
  3. Other reasons which contributed to the rise in NPA in India include:

ü  In 2008-09, the global financial crisis impacted Indian economy. The global financial crisis led to loss of jobs over the world, demand subsided. This adversely impacted India. Example: our exports fell down

ü  Undue delay in projects occurred in getting environmental concerns for some of the projects. This delay adversely affected the economic health of the project

ü  Several projects in India are languishing in courts awaiting its decision for start of the project. Some of the reasons for projects being taken to court is- issues related to land acquisition, environmental concerns etc. the judgment of the court in certain sectors have also affected the rise in NPA. Example: Coal, Telecom, power sector etc

ü  Over exposure of banks to certain sectors in India. Example: Infrastructure, steel, aluminum

  1.  Scenario of NPA situation in India:

ü  Non-performing assets (NPAs) at commercial banks amounted to ₹10.3 trillion, or 11.2% of advances, in March 2018.

ü  Public sector banks (PSBs) accounted for ₹8.9 trillion, or 86%, of the total NPAs

  1. Consequences of rising NPA: It results in bad health of the bank which would affect credit growth in the Indian economy, thereby affecting business as a whole in India
  2. What should be done? Government should take short-term measures and long-term measures to resolve the issue of NPA in India.

Short-term measures

Long-term measures

Infuse capital into these banks. (Mission Indhradhanush is welcome a step in this regard)

RBI should henceforth constantly monitor credit growth in India

Quality of the loan advanced should be done in a transparent manner. if any losses in loan advanced, provisions for such loan loss should be made

Even though Bank board bureau (BBB) has been setup, it’s working has been hampered. Many appointments to banks are yet to be made

Expedite the insolvency process done through Insolvency and Bankruptcy code

Care should be taken to ensure banks are not unduly exposed to anyone sector

Economic survey had suggested a ‘Bad bank’ to deal with NPA in India. Measures in this regard could be taken to setup such a bank

Expedite the process of environmental clearances, push for faster resolution of cases lying in court.

  1. Some of the steps taken in recent times: RBI’s mandate to identify NPA to all banks, RBI’s prompt corrective action, setting up Insolvency and Bankruptcy board, Project Sashakth, Mission Indhradhanush etc

Takeaway point: Both Government and Reserve Bank of India (RBI) are responsible for resolving the NPA crisis. Failing to do so, will decelerate India’s economic growth

Keywords: Non-Performing Assets Commercial Banks Public sector banks Bank board bureau

# Previous UPSC Question Marks Year
1 Comment on the important changes introduced in respect of the Long term Capital Gains Tax (LCGT) and Dividend Distribution Tax (DDT) in the Union Budget for 2018-2019. (150 Words, 10 Marks) 10 2018
2 Account for the failure of manufacturing sector in achieving the goal of labour-intensive exports rather than capital-intensive exports. Suggest measures for more labour-intensive rather than capital-intensive exports. 13 2016
3 What measures do you suggest to raise the volume of Public Savings in our country? Briefly state the importance of such savings for the contemporary economic scene. (150 words) 1996
4 What has been the rationale for deregulating commercial bank's lending rates as a policy strategy? (150 words) 1995
5 What is Partial Convertibility & rupee? What are its basic objectives? How is it going to benefit the Indian economy? (150 words) 1992
6 What are the main components of the non-Plan expenditure of the Government of India? Discuss the recent trends in the growth of this expenditure (150 words) 1989
7 Describe the organization and functions of Regional Rural Banks, Review their achievments. Is there any conflicting jurisdiction between the rural banks and the cooperative credit societies? 1983
8 What are ‘bearer bonds’ Why were special bearer bonds devised in February? What were their budgetary objectives how far such bonds achieved their objectives? 1981
9 As the resources of land are getting depleted man his turning to sea for the supply of his needs. What are the prospects of sea exploration for obtaining our requirements of food, minerals and chemicals, oil and gas? 1981

Title: A fraught moment: US-China trade war

Issue: USA-China trade tensions

Syllabus: General Studies-II - International Relations - Important events around the World

Context: The global economy stands to suffer more by the trade tensions between USA-China. This will stifle the global economic recovery that has been achieved after 2008-09 financial crisis.  


  1. The Trump regime has been very vocal about the trade protectionism of the Chinese. Rising trade deficit between USA and china, in favor of china has been cited as one of the reasons for trump regime adopting an aggressive stand against china.
  2. Recently, the trump regime announced it would impose additional tariffs on China. This came in the backdrop of ongoing trade negotiations between the two countries.
  3. Impact of such a move by the trump presidency
    1. It would lead to a contraction in the global economy growth
    2. Increased tariffs would lead to loss of jobs as companies try to trim their losses which would arise out of increased tariffs
    3. Increased tariffs would also lead to rise in the cost of goods, which would impact the consumer badly. Savings in the economy will come down
    4. Rising prices will give rise to inflation
    5. By imposing tariffs on China, America stands to raise the cost of raw materials that is imported from China; this would affect its own industries, leading to business suffering losses.
    6. Demand in the economy would be disturbed because of this move

Takeaway point: Though USA possess genuine concerns about trade protectionism of China, it would serve its interest better to engage in economic diplomacy rather than adopting the present stand of imposing tariffs which could erase the global recovery made in recent few years

Keywords: USA-China trade tensions tariffs jobs inflation

Currently there are no previous questions available.

Title: New clouds over the Persian Gulf

Issue: Iran nuclear deal

Syllabus: General Studies-II - International Relations - Important events around the World

Context: Iran has responded to the recent US sanctions by withdrawing partially from the nuclear deal. This is risky move that could impact peace and progress in West Asia region


  1. What is Iran nuclear deal? It is also called as Joint Comprehensive Plan of Action (JCPOA) or P5+1 agreement. The Obama administration along with France, UK, Germany, China and European Union had negotiated a successful treaty with Iran. The treaty bound Iran to eliminate its stockpile of medium-enriched uranium, cut its stockpile of low-enriched uranium by 98%, and reduce by about two-thirds the number of its gas centrifuges
  2. Under the Trump presidency, USA decided to withdraw from the deal citing non-compliance with Iran nuclear which was signed in 2015 even though International Atomic Energy Agency  (IAEA) had certified about Iran’s full commitment to the deal
  3. US has imposed crippling sanctions on Iran recently which would affect its oil industries and also it mineral industries. It could also lead to labour unrest which might result in the regime change in Iran, a scenario that USA has been pushing for a very long time
  4. Consequence of US sanctions on Iran: Mass unemployment, deterioration in the standard of living in the Iranian society, rise in geo-political tensions in the West Asian region
  5. Iran’s response to recent US sanctions

ü  Iran has withdrawn from some of the provisions of the deal, worrying among them is the nuclear enrichment and resuming work on the Arak nuclear facility

ü  It has shown willingness to close the Strait of Hormuz over which global trade routes pass. Such a move would derail the economy of various countries

ü  Some also fear that Iran could support militia organizations such as Hamas, or other such organizations in West Asia which could target American allies and its interests

  1. Consequence of such actions of Iran: It would lead to further alienation of some of the other members in the world. Peace would be affected in the region. It would bolster the claims of USA against Iran being a rogue state

Takeaway point: Iran nuclear deal has far more significance for the world than just a few countries. Diplomatic pressure should be the way to ensure both Iran and USA respect this deal both in word and spirit

Keywords: Iran nuclear deal Strait of Hormuz West Asia

Currently there are no previous questions available.

Currently there are no previous questions available.

Title: For a ful bench: on recommendations for judicial appointments

Issue: Judicial appointment

Syllabus: General Studies-II - Indian Polity and Constitution - Judiciary

Context: The Supreme Court of India has decided to fill its quota of 31 judges as mandated by a law made by the Parliament


  1. Strength of judges in Supreme Court of India: The original Constitution of 1950 envisaged a Supreme Court with a Chief Justice and 7 puisne Judges - leaving it to Parliament to increase this number. Parliament increased the number of Judges from 8 in 1950 to 11 in 1956, 14 in 1960, 18 in 1978, 26 in 1986 and 31 in 2008
  2. Mode of appointment: Collegium procedure is adopted by Supreme Court of India to recommend judges for the highest court. President appoints these judges. If the government of a day, returns the name of those recommended, Supreme Court can either choose different judges or send back the original recommendation. In such a case, government is obligated to advice President on appointment of those judges
  3. In recent times, questions have been raised over this mode of appointment. Some of the reasons for it are:

ü  It has been accused of lacking transparency

ü  Collegium system has not been mentioned in the constitution

ü  Vests too much power with judiciary in their own appointment

ü  It has led to frequent clashes between Executive and judiciary in recent times over some of the recommended names.

ü  At times, collegium has been accused of delaying in recommending names for appointment. Such delays hamper justice delivery in society

  1. What could be done? A more permanent institutional mechanism should be put in place of collegium system for appointment process. This new institution should remove the inefficiencies in the present system

Takeaway point: Systemic change is needed to ensure judicial appointments are made independent and transparent without compromising judiciary’s independence

Keywords: Collegium system transparency accountability

# Previous UPSC Question Marks Year
1 How far do you agree with the view that tribunals curtail the jurisdiction of ordinary courts? In view of the above, discuss the constitutional validity and competency of the tribunals in India. (15) 2018
2 Critically examine the Supreme Court’s judgement on ‘National Judicial Appointments Commission Act, 2014’ with reference to appointment of judges of higher judiciary in India. (150 words) 2017
3 What is meant by Judicial Activism? Evaluate its role in the context of the functioning of Indian Polity. (250 words) 15 marks 2008
4 Is the High Courts’ power to issue ‘writs’ wider than that of the Supreme Court of India? (150 words) 2006
5 Is it possible to distinguish between judicial review and judicial activism in India? Does the recent behavior of the Indian judiciary partake more of judicial activism? Argue with suitable example. (250 words) 2005
6 What is the position of the Supreme Court under the Constitution of India? How far does it play its role as guardian of the Constitution? (150 words) 2002
7 Explain Public Interest Litigation. Who can file it and on what basis can it be rejected by the Court of Law? (150 words) 2000
8 Present your views for and against the creation of an All India Judicial Service 150 words 1997
9 What is meant by ‘Judicial Activism’ Evaluate its role in reducing corruption in public life. 150 Words 1996
10 What is the position of the Supreme Court under the Constitution of India? Discuss its role as a guardian of the Constitution (About 250 words) 1995
11 Explain the significance of the April 1994 Supreme Court judgement on the proclamation of President's rule. (150 Words) 1994
12 What was the magnitude of the Bhopal Gas Tragedy and what were the salient features of the Supreme Court verdict on the Bhopal as Tragedy? (150 Words) 1991