Note: Please note that the “answers” below are not “model answers”. They aren’t summaries either, by the definition of the term. What we do offer is content that satisfies the demands of the question while also providing additional points in the form of background information.
Q1. Examine the challenges cryptocurrencies pose to emerging economies. Discuss the steps the government has taken to regulate it. 10M
A cryptocurrency is a digital currency in which cryptographic technology is used to regulate the creation of monetary units and verify the movement of funds, operating independently of a central bank. example: BitcoinEthereum, etc.
Advantages of cryptocurrencies
Figure: Advantages of cryptocurrency
Challenges posed by cryptocurrencies
- Market Volatility: Their speculative nature makes them highly unstable.
- For example, the value of Bitcoin is US$20,000 to US$3,800 in November 2018.
- Security risk:
- If the private key is lost, the user will not be able to access the cryptocurrency (unlike traditional digital banking accounts, this password cannot be reset).
- Malware threat:
- In some cases, these private keys are stored by technical service providers (cryptocurrency exchanges or wallets), making them susceptible to malware and hacking.
- dark web or dark marketThis exploits users through hacking.
- money laundering.
- according to “Cryptocurrency Anti-Money Laundering Report,”Criminals also use theft and gambling to launder cryptocurrencies.
- Energy usage: With crypto “mining” activity moving from India to other emerging market and developing countries, Significant impact on domestic energy use—Especially in countries that rely on energy that consumes a lot of CO2, or that subsidize energy costs given the large amount of energy required for mining activities.
- stock market problem
- SEBI has flagged the issue of not being able to control the “clearing and settlement” of cryptocurrencies and providing counterparty guarantees like they are done for equities.
- Other issues:
- Given that crypto assets can facilitate tax evasion, the threat to fiscal policy could also intensify.
- It may also reduce seigniorage (profit from the right to issue currency).
- Increased demand for crypto assets could also drive capital outflows affecting the forex market.
- Cryptocurrencies and Regulations in the Official Digital Currency Bill of 2021 introduced.
- Under this, there are plans to ban private digital currencies and favor RBI-backed currencies.
- Exploring RBI DLT (Distributed Ledger Technology) Base central bank digital currency.
- DLT records details in multiple places at the same time.
- example: blockchain is just one type of Distributed ledger.
- Central Bank Digital Currency (CBDC): It will be a legal tender.
- Can be converted or exchanged for equal amounts of cash of similar denomination.
India is now on the cusp of the next phase of the digital revolution, pouring its human capital, expertise and resources into this revolution and could emerge as one of the winners of this wave. All it takes is getting the policy decisions right. blockchain and crypto assets fourth industrial revolutionIndians simply shouldn’t be allowed to bypass it.
Q2.In order to attract investment in the global value chain, comprehensive infrastructure development is necessary. Analyze critically the scope of Gati Shakti’s mission in this regard. 10M
A massive lack of inter-agency coordination and cooperation is a major challenge in implementing time-bound infrastructure projects in India. Often these projects faced time overruns, leading to significant cost increases.
The PM Gati Shakti mission was launched to reduce these bottlenecks and attract investment to global value chains.
Need for integrated infrastructure development:
- Logistics cost: Logistics cost in India is about 13-14% of GDP 7-8% of GDP in developed countries.
- Impact of high logistics costs The cost structure within the economy and the costs for exporters to ship goods to buyers are high.
- Reduced productivity: In India, many SEZs and industrial parks Inefficient, fragmented, multimodal connectivity hinders your maximum productivity.
- Project delay: according to Ministry of Statistics and Program Implementation (MoSPI), at the beginning of 2021, 1,687 federal government projects under implementation worth more than Rs 21.45 lakh, was in a cost overrun of almost 20 percent, Mostly due to their delay.
- Coordination issues: Large gaps exist between the various departments and ministries with respect to macro planning and micro implementation and high level of information sharing as departments think and work in silos.
- Poor quality infrastructure: India is underdeveloped with quality infrastructure. In GVC, the quality of infrastructure becomes more important as it is premised on the timely production of international standard products at reasonable cost.
- weak infrastructure reduce a company’s competitiveness It reduces your ability to become part of the GVC.
- Spatial connection: India’s exports tend to be spatially concentrated due to poor infrastructure connectivity in various states.
- As highlighted in Economic Survey 2017-1875% of India’s exports come from just six states.the share of exports varies from 30% in Gujarat to less than 1% in Bihar.
- Duplicate implementation: Poor infrastructure planning It included a newly constructed road being dug by the Water Authority to lay pipes.
- This is having a negative impact on road infrastructure and the movement of the country.
PM Gati Shakti Mission: On India’s 75th Independence Day, the government has launched the ‘PM Gati Shakti Master Plan’. INR 10 billion project To develop a “whole infrastructure”.
Aims Ensure integrated planning and execution of infrastructure projects for the next four years, We focus on getting work done faster on the ground, saving costs and creating jobs, and reducing logistics costs.
Benefits of Gati Shakti Mission
- Last Mile Connectivity: Leads to last mile connectivity. Improved connectivity infrastructure is known to reduce the time it takes to transport products across different locations and broaden access to the labor market. thereby improving competitiveness.
- Reduce logistics costs: Gati Shakti’s mission is expected to reduce India’s logistics costs to 7-8% on par with developed countries. Therefore, we integrate it with the global value chain.
- Reduce duplication of implementation: Bringing together 16 infrastructure-related ministries reduces duplication of implementation by removing longstanding problems such as disjointed planning, lack of standardization, clearance issues, and timely creation and utilization of infrastructure capacity. .
- Facilitation of trade: Increased cargo handling capacity, faster port turnaround times, and increased trade activity.
- Supporting the expansion of special economic zones and industrial parks: With better connectivity, industrial parks and special economic zones will begin to function at maximum efficiency, increasing India’s contribution in global value chains.
- Integrated connectivity: It will lead to an integrated holistic transport connectivity strategy, greatly supporting Make in India and integrating different modes of transport.
- Other advantages:
- Helps map proposed and existing connectivity projects.
- It will help India become The world’s business mecca.”
- Uncredited Takeoffs: Various reforms made in the banking sector and bankruptcy and bankruptcy code, Banking institutions are hesitant to invest in infrastructure projects due to high NPAs and long preparation times.
- Impact of CoVid: CoVid has had a major impact on the global economy and domestic business activity, leading to lower private and investment demand.
- Structural issues: India needs to address the following issues. Land Acquisition Litigation Project delays, cost overruns, and environmental clearance issues hamper the overall development of infrastructure alignment.
India is currently a small player in GVCs, Only 1.3% This of global GVC exports is smaller than some smaller economies such as South Korea, Russia and Malaysia.
Gati Shakti Scheme It is expected to increase connectivity to India’s GVCs and make India a global business capital. But all challenges must be prioritized for the project to succeed.
Q3. Examine the following relevance in the context of civil servants. 10M
- spirit of service
- ethical governance
held by civil servants Having an important position, enjoying some broad powers, and having special duties This is because they are responsible for managing the resources entrusted to them by the community. They serve and provide the community and make important decisions that affect all aspects of community life. Communities therefore have the right to expect public officials to function fairly, impartially and efficiently.
- Transparency – Governance transparency is the idea that citizens have a right to know what their government is doing and that the government must provide that information.
- accountability – Accountability means that public officials are held accountable for their actions and responses to the entity to which they have obtained authority.
- spirit of service – It is the quality of being self-motivated and dedicated to public service.
- ethical governance – Ethical Governance is the ethical component of good governance where civil servants adhere to high ethical standards such as: Honesty, Compassion, Humanity
In today’s world, where India faces cbankruptcy, favoritism and political influence In public administration, transparency, accountability, and a spirit of service by civil servants not only ensure good governance, ethical governance in administration.