A NOTICE: Please remember that the following ‘Answers’ are NOT ‘Sample Answers’. They are also NOT an abstract if we go by the definition of the term. What we deliver is content that both meets the requirements of the question and at the same time gives you extra points in the form of background information.
Business:
Q1 Examine the challenges that cryptocurrencies pose to emerging markets. Discuss the measures taken by the government to regulate them. 10M
INTRODUCTION
Cryptocurrencies are digital currencies that use encryption techniques to regulate the creation of currency units and verify the transfer of funds that operate independently of a central bank. Examples: BitcoinEthereum etc.
Cryptocurrency Benefits
Fig.: Advantages of the cryptocurrency |
Cryptocurrency challenges
- Market Volatility: Their speculative nature makes them very volatile.
- For example, the value of Bit Coins fell $20,000 to $3,800 in November 2018.
- Risk in security:
- A user loses access to their cryptocurrency if they lose their private key (unlike traditional digital bank accounts, this password cannot be reset).
- Virus Threat:
- Some of these private keys are stored by technical service providers (cryptocurrency exchanges or wallets) that are vulnerable to malware or hacking.
- Dark Web or Dark Marketwhich result in users being exploited through hacking.
- money laundering.
- According to the “Anti-Money Laundering Report for Cryptocurrencies”,Criminals also use theft and gambling to launder cryptocurrencies.
- Power consumption: a migration of crypto “mining” activities from India to other emerging and developing countries may have an impact important influence on domestic energy consumption—particularly in countries that rely on more carbon-intensive forms of energy, as well as those that subsidize energy costs – given the large amounts of energy required for mining activities.
- stock market problem
- SEBI has pointed out the issue that it has no control over the “clearing and settlement” of cryptocurrencies and cannot offer a counterparty guarantee like stocks can.
- Other problems:
- Threats to fiscal policy could also intensify given the potential of crypto assets to facilitate tax evasion.
- Seigniorage (profits from the right to issue currencies) may also decline.
- Increased demand for crypto assets could also facilitate capital outflows affecting the forex market.
Government action to regulate
- Cryptocurrency and Regulation of Official Digital Currency Law, 2021 introduced.
- Among them is a plan to ban private digital currencies and favor currencies backed by the RBI.
- RBI explored DLT (Distributed Ledger Technology) based central bank digital currency.
- Under DLT, details are recorded in multiple places at the same time.
- For example: blockchain is just a kind of distributed ledger.
- Central Bank Digital Currency (CBDC): It will be legal tender.
- Can be exchanged or exchanged for cash of similar currency at face value.
Conclusion
India is currently on the cusp of the next phase of the digital revolution and has the potential to bring its human capital, expertise and resources to this revolution and emerge as one of the winners of this wave. All that needs to be done is get the policy right. Blockchain and crypto assets will be an integral part of the Fourth industrial revolution; Indians should not be made to just bypass it.
Q2. Integrated infrastructure development is required to attract investment in the global value chain. In this regard, critically analyze the scope of Gati Shakti’s mission. 10M
introduction
The widespread lack of coordination and cooperation between the authorities has been a major challenge for the time-bound implementation of infrastructure projects in India. Very often these projects ran out of time, leading to significant cost increases.
PM Gati Shakti’s mission was created to reduce these bottlenecks and attract investment into the global value chain.
Body:
Need for integrated infrastructure development:
- Logistic costs: Logistics costs in India are approx 13-14% of GDP compared to about 7-8% of GDP in developed economies.
- High logistics costs have an impact Cost structures within the economy and also make it more expensive for exporters to ship goods to buyers.
- Lower production potential: in India many Special economic zones and industrial parks are not realizing their full productive potential due to inefficient and fragmented multimodal connectivity.
- Delays in projects: According to the Ministry of Statistics and Program Implementation (MoSPI), Beginning of 2021, 1,687 Union Government projects under implementation, valued at more than Rs 21.45 lakh crore, had fallen into a cost overrun from almost 20 percent mainly because of their delay.
- coordination problem: There is a big gap between different departments and ministries in terms of macro-planning and micro-implementation and extended information sharing as departments think and work in silos.
- Poor infrastructure quality: There is poor quality infrastructure development in India. Infrastructure quality is becoming increasingly critical in GVCs as they are based on timely production of products to international standards at reasonable cost.
- weak infrastructure affects the competitiveness of companies Reducing their ability to be part of GVCs.
- Spatial Connectivity: Due to the poor infrastructure connections between various states, India’s exports tend to be spatially concentrated.
- As highlighted in the 2017-18 Economic Survey75 percent of Indian exports come from just six stateswith an export share ranging from 30 percent in Gujarat to less than one percent in Bihar.
- Implementation overlaps: Bad infrastructure planning This included newly built roads dug by the water board to lay pipes.
- This has severely affected the country’s road infrastructure and traffic.
PM Gati Shakti Mission: On the 75th Independence Day of India, the government launched the “PM Gati Shakti Master Plan”, a Rs. 100 lakh crore project for the development of a “holistic infrastructure”.
It aims to ensure integrated planning and implementation of infrastructure projects in the next four years with a focus on speeding up work on site, saving costs and creating jobs, and reducing logistics costs.
Benefits of Gati Shakti Mission
- Connectivity on the last mile: it will lead to last mile connectivity. Better connectivity infrastructure is known to reduce the time it takes to move products between different locations and expand access to labor markets. thereby improving competitiveness.
- Reduction of logistics costs: The Gati Shakti mission aims to reduce logistics costs in India and bring them to the level of developed countries where they are 7-8%. This integrates it into the global value chain.
- Reduce implementation overlaps: As it brings together 16 infrastructure-related ministries, it will reduce implementation overlaps by eliminating long-standing problems such as incoherent planning, lack of standardization, issues with clearances, and timely creation and use of infrastructure capacity.
- Boost Trade: it will increase cargo handling capacity and shorten turnaround time in ports, boosting trade activity.
- Help in growing economic zones and industrial parks: With better connectivity, industrial parks and economic zones will function at their full efficiency, which will lead to increased contribution of India in the global value chain.
- Integrated Connectivity: It will lead to an integrated and holistic transport connectivity strategy that will strongly support Make in India and integrate different modes of transport.
- Other advantages:
- Helps map proposed and existing connectivity projects.
- Will help India to become” Business Mecca of the World”.
expenditure
- Low Credit Deduction: despite various reforms in the banking sector and their implementation Insolvency and Bankruptcy Code, Banking institutions are reluctant to invest in infrastructure projects due to higher NPAs, long maturity, etc.
- CoVid impact: CoVid has significantly impacted business activity in the global economy and domestically, resulting in reduced private and investment demand.
- Structural problems: India needs to address the issues Legal dispute over the acquisition of land and delays, project cost overruns, environmental impact issues, etc. that hamper the overall development of infrastructure links.
Conclusion
Currently, India is a small player in GVCs, the accounting only 1.3 percent of global GVC exports. This is less than in several smaller economies such as the Republic of Korea, Russia and Malaysia.
Gati Shakti scheme aims to promote India’s connection to GVCs and make India a business capital of the world. But all challenges must be addressed as a matter of priority for the project to be a success.
Ethics:
Q3 Examine the relevance of the following in the context of public service. 10M
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- transparency
- accountability
- spirit of service
- ethical governance
introduction
officials hold important offices, have far-reaching powers and have special duties because they are responsible for managing the resources entrusted to them by the community. They provide and provide services to the community and make important decisions affecting all aspects of a community’s life. Consequently, the community has the right to expect the public service to operate fairly, impartially and efficiently.
Body
- transparency – Transparency in governance is the idea that people have a right to know what their government is doing and the government must provide that information.
- accountability – Accountability means holding officials accountable for their behavior and reactions to the body from which they derive their powers.
- spirit of service – It is the quality of getting involved in public service without any motive of your own.
- ethical governance – Ethical governance is the ethical element of good governance, where public officials hold themselves to high moral standards Integrity, Compassion, Humanity
Conclusion
In today’s world, India stands before cCorruption, nepotism and political influence in administration, transparency, accountability and the spirit of service of civil servants will not only ensure good governance, but will also be able to build it ethical governance in the management.
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