Answers: Mains Marathon – UPSC Mains Current Affairs Questions – September 11, 2018

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Q.1) Discuss in brief the various land reform policies and its impact on Indian agrarian society during colonial period.

Answer: Land reform usually refers to redistribution of land from the rich to the poor.

Abolition of Intermediaries:

1. Intermediaries like Zamindars, Talukdars, Jagirs and Inams had dominated the agricultural sector in India by the time the country attained independence.
2. With the abolition of intermediaries, more lands have been brought to government possession for distribution to landless farmers.

Tenancy Reforms:

1. Rural India witnesses three types of tenants. They are- (a) permanent or occupancy tenants, (b) temporary or non-occupancy tenants, and (c) sub-tenants.
2. The tenancy reforms have three important features, these are- (i) security of tenure for the tenants, (ii) fixation of fair rent and (iii) grant of ownership rights to certain types of tenants.

Ceiling on land holdings:

1. Ceiling on land holdings implies the fixing of the maximum amount of land that an individual or family can possess.

Consolidation of Holdings:

1. Consolidation of Holdings means bringing together the various small plots of land of a farmer scattered all over the village as one compact block, either through purchase or exchange of land with others.

Co-operative farming:

1. It has been advocated to solve the problems of sub-division and fragmentation of holdings.
2. In this system, farmers pool their small holdings for the purpose of cultivation and reap benefits of large scale farming.

Bhoodan Movement:

1. The Bhoodan Movement was spearheaded by Acharya Vinoba Bhave. He collected land from the rich landlords and distributed that to the landless.

Compilation and updating of land records:

1. Compilation and updating of the land records are an essential condition for the effective implementation of land reforms programme.

Q.2) The corporate sector in India has remain indebted for long. Analyse the reasons behind incorporation( Inc’s ) indebtedness and illustrate the recent measures taken to solve this problem.

Answer: Though a cross-country analysis of corporate debt suggests that India’s total corporate debt relative to its GDP is less than that of several major economies, the quality of debt in India is poorer, with a large fraction of indebted firms losing their repayment ability, and saddling banks with a rising pile of non-performing assets (NPAs).

Reasons for indebtedness:

1. 2008 recession is the primary reason for poor performance of corporates after borrowing during the period.
2. Policy paralysis resulted in delays in several infrastructure projects.
3. Weak corporate credit quality is a reason for the build-up of bad loans in the Indian banking system with gross non-performing assets.
4. Performance of Indian rupee vis-a-vis the dollar has exaggerated the external commercial borrowings.

Measures taken to solve the problem:

1. Insolvency and bankruptcy code
2. Reserve Bank of India has already allowed banks to take control of defaulting companies by converting loans into equity.
3. RBI allowed banks to take control of defaulting companies by converting loans into equity.

Q.3) What do you understand by the Belt and road initiative (BRI) of China? Critics worry that China could use BRI for ‘Debt-trap diplomacy’ to extract strategic concessions from partner countries. Examine.

Answer: Belt and Road initiative is a “21st century silk road” made up of a “belt” of overland corridors and a maritime “road” of shipping lanes. BRI consists primarily of the Silk Road Economic Belt, linking China to Central and South Asia and onward to Europe, and the New Maritime Silk Road, linking China to the nations of Southeast Asia, the Gulf Countries, North Africa, and on to Europe.

Worries about the project:

1. Sri Lanka has already complained about the indebtedness. The case of Sri Lanka sparked fears that Hambantota could one day become a Chinese naval hub.
2. China’s “debt book diplomacy” uses strategic debts to gain political leverage with economically vulnerable countries across the Asia-Pacific region.
3. China’s use of its leverage ran counter to US interests, or if the US had strategic interests in a country which had its domestic stability undermined by unsustainable debt.
4. Pakistan and Sri Lanka are states where the process was “advanced”, with deepening debt and government had already ceded a key port or military base.
5. While there was a lack of “individual diplomatic clout” in Cambodia, Laos and the Philippines, Chinese debt could give China a “proxy veto” in ASEAN.
6. When countries prove unable to pay back their debts, China has already and is likely to continue to offer debt-forgiveness in exchange for both political influence and strategic equities.

Q.4) Drain of wealth theory made the question of economic rights a focal point of political struggle. Comment.

Answer: Drain of wealth theory:

The nationalist leaders pointed out that a large part of India’s capital and wealth was being transferred or ‘drained’ to Britain in the form of salaries and pensions of British civil and military officials working in India, interest on loans taken by the Indian Government, profits of British capitalists in India, and the Home Charges or expenses of the Indian Government in Britain.

How it became a political issue:

1. The agitation on economic issues contributed to the undermining of the ideological hegemony of the alien rulers over Indian minds.
2. In the course of the economic agitation, nationalist leaders linked every important economic question with the politically subordinated status of the country.
3. While until the end of the 19th century, Indian nationalists confined their political demands to a share in political power and control over the purse, by 1905 most of the prominent nationalists were putting forward the demand for some form of self-government.
4. It united all Indians against the British due to common suffering against exploitation in agriculture, handicrafts and industry.
5. This critique demonstrated how British empire is reason for impoverishing India as a colony.