Sign Up

Have an account?

Sign In

Don't have account,

Forgot Password

Lost your password? Please enter your email address. You will receive a link and will create a new password via email.


Have an account?

Sorry, you do not have permission to ask a question, You must login to ask a question.

Need An Account,

Please briefly explain why you feel this question should be reported.

Please briefly explain why you feel this answer should be reported.

Please briefly explain why you feel this user should be reported.

Search
Ask A Question
Home/upsc: economic planning

Mains Answer Writing Latest Questions

Anil Bhargav
  • 2
Anil BhargavBegginer
Asked: July 20, 2024In:
  • 2

What does GDP (gross domestic product) mean to you? How is the computation made? Additionally, set it apart from the GNP, or gross national product.

upsc: economic planning
  1. Bhavya Shankar
    Bhavya Shankar Begginer
    What do you understand by Gross Domestic Product or GDP? How is it calculated? Also differentiate it from Gross National Product or GNP.

    Infographic GDP & GNP

    Infographic GDP & GNP

    See less
Prakher Singh
  • 2
Prakher SinghBegginer
Asked: July 23, 2024In:
  • 2

Examine and evaluate the government’s efforts to support the application of innovation and technology in economic planning, including the creation of the National Data and Analytics Platform, the use of artificial intelligence and geospatial data, and their potential to improve ...

upsc: economic planning
  1. Eklavya Pandit
    Eklavya Pandit Begginer

    The government has undertaken several initiatives to promote the use of technology and innovation in economic planning and policymaking. One key development is the National Data and Analytics Platform (NDAP), which aims to provide a centralized repository and analytical capabilities for data from vaRead more

    The government has undertaken several initiatives to promote the use of technology and innovation in economic planning and policymaking. One key development is the National Data and Analytics Platform (NDAP), which aims to provide a centralized repository and analytical capabilities for data from various government sources.

    The NDAP is designed to facilitate evidence-based policymaking by making data more accessible and enabling advanced analytics. By consolidating data from different ministries and departments, the platform allows policymakers to gain a more comprehensive understanding of economic and social trends. This can support the development of policies that are better informed by the available data.

    Another notable initiative is the increased use of geospatial data and artificial intelligence (AI) in economic planning. Geospatial data, which provides detailed information on the location and characteristics of various economic and social phenomena, can be used to identify patterns, trends, and regional disparities. Integrating this data with AI-powered analytics can help policymakers make more informed decisions, such as targeted interventions in specific geographic areas or the identification of high-potential regions for investment and development.

    The potential benefits of these initiatives include:

    1. Improved data accessibility and quality: The NDAP can help overcome challenges related to data fragmentation, inconsistencies, and accessibility, which have historically hindered evidence-based policymaking.
    2. Enhanced analytical capabilities: The platform’s analytical tools and AI-powered techniques can enable more sophisticated and nuanced analysis of economic and social data, leading to deeper insights and more informed policy decisions.
    3. Targeted and responsive policymaking: The use of geospatial data and AI can help policymakers identify specific areas or populations that require targeted interventions, as well as monitor the effectiveness of implemented policies in near real-time.
    4. Increased transparency and accountability: By making data and analytical processes more accessible, these initiatives can promote greater transparency in policymaking and enhance public trust in the government’s decision-making.

    However, the success of these initiatives will depend on several factors, such as the quality and completeness of the data, the robustness of the analytical tools, the integration of these technologies across different government agencies, and the adoption of a culture of data-driven decision-making within the government.

    Additionally, it will be important to address concerns related to data privacy, security, and ethical use of AI, to ensure that these technologies are deployed in a responsible and equitable manner.

    Overall, the government’s efforts to leverage technology and innovation in economic planning and policymaking have the potential to significantly enhance evidence-based decision-making and ultimately lead to more effective and responsive policies that better address the needs of the country’s citizens.

    See less
Raudas Singh
  • 1
Raudas SinghBegginer
Asked: July 20, 2024In:
  • 1

Talk about the drawbacks of utilizing GDP to gauge a nation’s level of prosperity.

upsc: economic planning
  1. Mona Singh
    Mona Singh Begginer

    Gros Domestic Product (GDP) is the sum total of value of goods and services created within the geographical boundary of a country in a particular year. It is usually taken as an indicator of the well-being in the context of per capita income suggesting the prosperity of the people. It may indicate mRead more

    Gros Domestic Product (GDP) is the sum total of value of goods and services created within the geographical boundary of a country in a particular year. It is usually taken as an indicator of the well-being in the context of per capita income suggesting the prosperity of the people. It may indicate more income and capacity to buy more goods and services among the people. However, there are some limitations of using GDP as an indicator of economic welfare of a country:

    • Uneven Distribution of GDP: If the GDP of the country is rising, the economic well being may not rise as a consequence. This is because the rise in GDP may be concentrated in the hands of very few individuals or firms. For the rest, the income may in fact have fallen. In such cases, the welfare of the entire country cannot be reflected in per capita GDP.
    • Non-monetary exchanges or non-marketed activities: Many activities in an economy are not evaluated in monetary terms. For example, the domestic work that women perform at home is not paid for. Barter exchanges that take place in the informal sector are not registered as part of the economic activity. In developing countries, where many remote regions are underdeveloped, these kinds of barter exchanges are common occurrences, but they are generally not counted in the GDPs of these countries. Since these exchanges are not counted in the GDPs, there occurs underestimation of GDP. Hence, GDP calculated in the standard manner may not give us a clear indication of the productive activity and well-being of a country.
    • Externalities: Externalities refer to the benefits (or harms) a firm or an individual causes to another for which they are not paid (or penalized). Externalities do not have any market in which they can be bought and sold. For example, the output of a refinery is the amount of oil it refines. The value added of the refinery will be counted as part of the GDP of the economy. But in carrying out the production the refinery may also be polluting the nearby river. This may cause harm to the people who use the water of the river. Hence their well-being will fall. In this case, the GDP is not taking into account such negative externalities. Therefore, if we take GDP as a measure of welfare of the economy we shall be overestimating the actual well-being. There can be cases of positive externalities as well. In such cases, GDP will underestimate the actual well-being of the economy.

    In addition to this, GDP also does not take into account economic inequality, loss of jobs and opportunities and level of health and education and quality of choices in an economy. Therefore, new concepts like Gross National Happiness (GNH), Human Development Index (HDI) and the Social Progress Index (SPI) are often discussed as the better alternative to assess the well-being of society.

    See less
Meera Singh
  • 1
Meera SinghBegginer
Asked: July 20, 2024In:
  • 1

Describe if and why the following are taken into account when calculating GDP. Amounts paid to retired government officials as pensions (a), proceeds from the sale of an old car (b), interest on the national debt (c), food grains grown ...

upsc: economic planning
  1. Rajesh Meena
    Rajesh Meena Begginer

    Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period, typically a year. GDP, by expenditure method, is calculated as: GDP = Private consumption (C) + Government spending (G) + InvestmenRead more

    Gross domestic product (GDP) is the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period, typically a year. GDP, by expenditure method, is calculated as: GDP = Private consumption (C) + Government spending (G) + Investment (1) + Exports (X) Imports (M).

    • Payment of pensions to retired government employees: It is included in the GDP as it is a deferred wage. It is part of payment for factor services rendered by the recipients prior to their retirement. However, old age pension is not included in the GDP accounting as it constitutes transfer payments.
    • Income from the sale of an old car: It is not included in the GDP since its value has already been included in the GDP of the year in which it was produced. Including it in the GDP will be equivalent to double counting. However, commission earned on the sale of the old car by agents will be included in GDP accounting of the current year.
    • Interest on national debt: It is not included in the GDP as interest is paid upon the borrowing/loans taken by the government to fund its consumption expenditure and no productive activity is linked with such loans.
    • Foodgrains produced by farmers for their own consumption: Foodgrains used for own consumption form a part of the private consumption. Producing foodgrains has an opportunity cost in terms of factors used for production. Equivalently, it would have generated income, had the same foodgrains been sold in the market. So, an imputed value of foodgrains used for own consumption is included in the GDP.
    • Services provided by housewives: These are not included in the GDP because they constitute personal services rendered within the household or family. These services are not marketed and it is hard to assess monetary value of such personal services.

    Thus, GDP is limited in the sense that it only measures the market value of final goods and services produced in an economy in a given period of time.

    See less
Meera Singh
  • 1
Meera SinghBegginer
Asked: July 20, 2024In:
  • 1

How does fiscal policy affect the functioning of an economy? Emphasize the government’s tools for reducing the fiscal deficit.

upsc: economic planning
  1. TANISHQA AGGARWAL
    TANISHQA AGGARWAL Begginer
    What role does fiscal policy plays in an economy? Highlight the tools used by the government to control fiscal deficit.

    Fiscal Policy????????

    Fiscal Policy????????

    See less
Sunita Soni
  • 1
Sunita SoniBegginer
Asked: July 24, 2024In:
  • 1

What does the GDP deflator mean? In what ways does it differ from other inflation indexes like the WPI and CPI?

upsc: economic planning
  1. Babita Singh
    Babita Singh Begginer

    The GDP deflator is the ratio of the value of goods and services an economy produces in a particular year at current prices, to that, at prices prevailing during any other reference (base) year. GDP deflator = (Nominal GDP/Real GDP)*100 This ratio basically shows to what extent an increase in GDP inRead more

    The GDP deflator is the ratio of the value of goods and services an economy produces in a particular year at current prices, to that, at prices prevailing during any other reference (base) year. GDP deflator = (Nominal GDP/Real GDP)*100 This ratio basically shows to what extent an increase in GDP in an economy has happened on account of higher prices, rather than increased output. Hence, it is a good measure of inflation. For example: if an economy has a nominal GDP of $100 billion and has a real GDP of $80 billion, the economy’s GDP price deflator can be calculated as ($100 billion / $80 billion) x 100, which equals to 125. This means that the aggregate level of prices have increased by 25 percent from the base year to the current year. Other than GDP deflator, there are various indices such as Wholesale Price Index (WPI), Consumer Price Index (CPI), Producer Price Index (PPI), Commodity Price Index, Cost of Living Index, Capital Goods Price Index etc. that are used to measure inflation. But WPI and CPI are widely used indices to calculate inflation all over the world.

    Differences between the GDP deflator, CPI and WPI are as follows:

    • The GDP deflator covers the entire range of goods and services produced in the economy as against the fixed and limited commodity baskets for the WPI (no representation of the services sector) or CPI (based on only a basket of selected goods and services).
    • Changes in consumption patterns or the introduction of new goods and services are automatically reflected in the deflator because it includes a ‘changing basket’. CPI reflects changes to a consumer’s cost of living and WPI captures price changes at the factory/wholesale level, but they do not reflect new expenditure patterns because of the ‘fixed basket’.
    • GDP deflator includes only those goods which are produced domestically. Imported goods do not form the part of GDP and hence are not reflected in the GDP deflator. While both WPI and CPI consider import in their calculations.
    • GDP deflator is available only on a quarterly basis along with GDP estimates, whereas CPI and WPI data are released every month. This is the another reason behind using CPI/WPI rather than GDP deflator.

    In India, WPI was used as a key measure of inflation for a long time, but now CPI is ation for being used for the same, as it covers services and also measures inflation from consumers’ end instead of manufacturers’ end.

    See less
Shraddha Bhat
  • 0
Shraddha BhatBegginer
Asked: August 22, 2024In:
  • 0

Roadmap for Answer Writing Introduction Purpose: Define potential GDP and its significance in evaluating economic performance. Context: Briefly introduce how potential GDP serves as a benchmark for actual economic output. Definition of Potential GDP Definition: Potential GDP is the maximum level of output or real ...

upsc: economic planning
  1. Team
    Best Answer
    Team Supreme

    Model Answer Introduction Potential GDP (Gross Domestic Product) refers to the maximum level of output an economy can sustain without triggering inflationary pressures. It reflects the productive capacity of an economy, influenced by factors like labor force size and skill level, capital stock, techRead more

    Model Answer

    Introduction

    Potential GDP (Gross Domestic Product) refers to the maximum level of output an economy can sustain without triggering inflationary pressures. It reflects the productive capacity of an economy, influenced by factors like labor force size and skill level, capital stock, technology, and natural resources. Understanding potential GDP helps gauge how well an economy is performing relative to its capabilities.

    Determinants of Potential GDP

    1. Labor Force:
      • A growing, well-educated, and skilled labor force enhances productivity and economic growth. Conversely, a declining or unskilled labor force constrains potential GDP.
      • Source: World Bank.
    2. Capital Stock:
      • Accumulation of physical capital (machinery, infrastructure) boosts productivity. Insufficient investment limits economic growth potential.
      • Source: Reserve Bank of India (RBI) reports.
    3. Technological Progress:
      • Innovations improve production efficiency, enhancing output capacity. Lack of technological advancement can hinder growth.
      • Source: National Institute of Transforming India (NITI Aayog).
    4. Natural Resources:
      • Abundant and accessible natural resources support economic growth. Scarcity can restrict potential GDP.
      • Source: Ministry of Mines, Government of India.
    5. Policy Environment:
      • Supportive government policies promote investment and innovation, while restrictive policies can limit growth potential.
      • Source: Economic Survey of India.

    Factors Inhibiting India from Realizing Its Potential GDP

    1. Lack of Infrastructure:
      • Inadequate transportation, energy shortages, and limited technology access hinder productivity and investment.
      • Source: Planning Commission of India.
    2. Regulatory Environment:
      • A complex regulatory framework and corruption impede economic growth and deter investment.
      • Source: Transparency International.
    3. Low Investment:
      • Low savings rates lead to insufficient capital accumulation, limiting growth.
      • Source: Economic Times.
    4. Agricultural Productivity:
      • Low productivity in agriculture due to outdated practices affects overall economic potential.
      • Source: Food and Agricultural Organization (FAO).
    5. Education, Health, and Skill Development:
      • Despite a favorable demographic dividend, inadequate education and skill mismatches hinder workforce effectiveness.
      • Source: National Skill Development Corporation (NSDC).

    Conclusion

    Potential GDP is shaped by diverse determinants. While estimating it poses challenges, recognizing the factors inhibiting India from reaching its potential GDP is crucial for informed economic policies. Addressing these constraints can significantly enhance India’s economic growth and overall societal well-being.

    See less
Vihaan Choudhury
  • 0
Vihaan ChoudhuryLearner
Asked: January 22, 2025In:
  • 0

Roadmap for Answer Writing Introduction: Briefly introduce India’s defense sector, highlighting the need for indigenization, domestic procurement, and boosting defense exports. Mention the importance of these areas for national security and economic growth. Institutional and Policy Changes Driving Indigenization: Defense Procurement Procedure (DPP) 2016: Discuss ...

upsc: economic planning
  1. Team
    Best Answer
    Team Supreme

    Model Answer India's defense sector has seen significant changes through strategic institutional and policy measures that have facilitated indigenization, domestic capital procurement, and defense exports. 1. Defense Indigenization: The Government of India has taken several steps to reduce relianceRead more

    Model Answer

    India’s defense sector has seen significant changes through strategic institutional and policy measures that have facilitated indigenization, domestic capital procurement, and defense exports.

    1. Defense Indigenization:
    The Government of India has taken several steps to reduce reliance on imports and foster indigenization:

    • Defense Procurement Procedure (DPP) 2016: This introduced the ‘Buy Indian-IDDM’ (Indigenously Designed, Developed, and Manufactured) category to prioritize indigenous equipment.
    • Defense Acquisition Procedure (DAP) 2020: Emphasized increasing indigenous content in defense procurement. Between 2016-2020, 86 capital acquisition proposals were categorized under this initiative.
    • Indigenization of Components: A policy was introduced to indigenize defense components and sub-assemblies. For instance, 1,499 items were indigenized against a target of 1,244 in 2020-21.
    • Bilateral Agreements: Agreements such as the one signed in 2019 with Russia have promoted joint manufacturing of spares and components.

    2. Domestic Capital Procurement:
    India has allocated significant resources to support domestic defense industry growth:

    • Budgetary Support: In 2022-23, 25% of the domestic capital procurement budget was earmarked for the private defense industry.
    • Innovation Incentives: Rs. 1,500 Crore was allocated for procurement from startups to encourage technological innovation.

    3. Defense Exports:
    India has actively promoted defense exports, resulting in a 32.5% year-on-year growth in 2023-24:

    • Streamlining Export Process: The establishment of defense export promotion cells and the Defence Exim Portal has simplified export procedures.
    • Promotional Efforts: Platforms like Aero India exhibitions have helped increase international outreach.

    Challenges Remaining: Despite these efforts, challenges persist:

    • Production Shortfalls: India’s defense production has not met the armed forces’ requirements, with domestic procurement remaining stagnated at around 60% of the total needs.
    • Technology Gaps: The domestic industry still faces significant gaps in designing and manufacturing major systems and critical components.
    • Private Sector Participation: Limited long-term contracts and complex procurement procedures have hindered private sector involvement.
    • Skilled Labor Deficit: There is a shortage of skilled workers, especially in high-tech areas like aeronautical engineering and cybersecurity.

    Addressing these challenges will require further collaboration between the government, industry, and academia, with enhanced investments in R&D and skill development.

    Highlights

    • Policy Measures: DPP 2016, DAP 2020, and initiatives for indigenization and procurement from startups.
    • Growth in Exports: 32.5% increase in exports in 2023-24, supported by simplified processes and international promotions.
    • Challenges: Production limitations, technological gaps, private sector involvement, and skilled labor shortages.
    See less
Team
  • 0
TeamSupreme
Asked: August 22, 2024In:
  • 0

Roadmap for Answer Writing 1. Introduction Objective: Introduce the Goods and Services Tax (GST) and its significance in India. Key Point: Emphasize the goal of creating a unified tax structure to improve ease of doing business and enhance compliance. 2. Indirect Taxes Subsided in ...

upsc: economic planning
  1. Team
    Team Supreme

    Model Answer Introduction The Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based indirect tax implemented in India on July 1, 2017. It aimed to unify the tax structure under a single regime, enhancing transparency and compliance while reducing the tax burden on consumersRead more

    Model Answer

    Introduction

    The Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based indirect tax implemented in India on July 1, 2017. It aimed to unify the tax structure under a single regime, enhancing transparency and compliance while reducing the tax burden on consumers.

    Indirect Taxes Subsided in GST

    GST has subsumed several indirect taxes previously levied by both the central and state governments:

    Central Level Taxes

    1. Central Excise Duty
    2. Additional Excise Duty
    3. Service Tax
    4. Countervailing Duty
    5. Special Additional Duty of Customs

    State Level Taxes

    1. State Value Added Tax (VAT)/Sales Tax
    2. Entertainment Tax (excluding those levied by local bodies)
    3. Central Sales Tax (levied by the Centre and collected by the States)
    4. Octroi and Entry Tax
    5. Purchase Tax
    6. Luxury Tax
    7. Taxes on Lottery, Betting, and Gambling

    Revenue Implications of GST Since July 2017

    The introduction of GST has had significant revenue implications:

    • Revenue Growth: After initial challenges, GST revenue collections increased from an average of ₹0.89 lakh crores in 2017-18 to ₹1.5 lakh crores in 2022-23.
    • Tax Base Expansion: The implementation of the e-way bill system has improved traceability in inter-state transactions, leading to an increase in registered businesses from 6.4 million under the old regime to 11.2 million under GST.
    • Reduction in Tax Evasion: GST’s destination-based nature has made tax evasion more difficult, enhancing transparency in transactions.
    • State Revenue Disparities: While overall GST collections have risen, state revenues have shown volatility, leading to concerns about the equitable distribution of tax revenues.
    • Compensation Issues: States are guaranteed compensation for revenue shortfalls for five years, but there are concerns about the sustainability of this arrangement as their taxation powers are curtailed.

    Conclusion

    GST represents a significant reform in India’s tax landscape, aiming to eliminate the cascading effect of taxes and streamline compliance. Despite challenges, it has the potential to drive economic growth and enhance employment generation in the long run.

    See less
Suhasini Dutta
  • 0
Suhasini DuttaBegginer
Asked: August 22, 2024In:
  • 0

Roadmap for Answer Writing 1. Introduction Objective: Introduce the topic of GDP growth and inflation in the Indian economy. Key Point: State the importance of analyzing whether steady GDP growth and low inflation indicate a healthy economy. 2. Arguments Supporting the View A. Strong GDP ...

upsc: economic planning
  1. Team
    Team Supreme

    Model Answer Introduction The Indian economy has transitioned from high inflation to a more stable and lower inflation rate, coinciding with steady GDP growth over the past five years. This trend raises the question of whether these factors signify a healthy economy. Reasons Supporting the View 1. SRead more

    Model Answer

    Introduction

    The Indian economy has transitioned from high inflation to a more stable and lower inflation rate, coinciding with steady GDP growth over the past five years. This trend raises the question of whether these factors signify a healthy economy.

    Reasons Supporting the View

    1. Strong GDP Growth

    India has experienced an average GDP growth of around 7% per annum over the last decade, making it one of the fastest-growing economies globally. This growth has contributed to job creation and significant poverty reduction, indicating a robust economic environment.

    2. Low Inflation

    Low inflation rates foster economic stability, encouraging savings and investment. The Monetary Policy Committee (MPC) has effectively maintained price stability, ensuring that consumer purchasing power remains intact.

    3. Policy Stability

    Steady growth and low inflation create favorable market conditions for investment and production planning. This stability is crucial for enhancing business confidence and attracting foreign investments.

    Points Against the View

    1. Low Demand Indicators

    While low inflation can indicate stability, it may also reflect weak demand, adversely affecting industrial output. This disconnect can hinder overall economic health.

    2. Investment Reduction

    A contraction in consumption has limited further investment opportunities. Falling consumption patterns directly impact corporate revenues and investment decisions.

    3. High Unemployment

    Despite steady growth, unemployment rates have reached a 45-year high, indicating that growth has not translated into sufficient job creation.

    4. Double Balance Sheet Problem

    Many corporates face revenue shortages, complicating their ability to repay debts and contributing to rising Non-Performing Assets (NPAs) in the banking sector. This issue hampers economic growth potential.

    5. Unequal Growth Distribution

    The benefits of economic growth have not been evenly distributed, leaving significant portions of the population in poverty and widening the gap between the rich and poor.

    Conclusion

    While steady GDP growth and low inflation suggest a positive economic outlook for India, underlying issues such as low demand, high unemployment, and unequal growth distribution present significant challenges. A nuanced approach is necessary to ensure that growth translates into broader economic benefits for all citizens.

    See less
Load More Questions

Resources & Suggestions

Mains Answer Writing Latest Articles

On: March 8, 2025

Daily Answer Writing Practice Questions (8 March 2025)

Examine the key issues that obstruct the development of port infrastructure in India and outline the recent measures taken by the government to address these challenges. (Answer in 200 words) भारत में बंदरगाह अवसंरचना के विकास में आने वाली विभिन्न ...

On: March 7, 2025 Comments: 0

मानव-वन्यजीव संघर्ष का प्रबंधन

प्रधानमंत्री की घोषणा: मानव-वन्यजीव संघर्ष प्रबंधन के लिए एक समर्पित केंद्र की स्थापना। चुनौतियाँ: जनसंख्या वृद्धि और संसाधनों की प्रतिस्पर्धा। वन्यजीव संरक्षण का महत्व पारिस्थितिक संतुलन और जलवायु अनुकूलन: वन्यजीव पारिस्थितिकी तंत्र को बनाए रखने और जलवायु पैटर्न को विनियमित ...

On: March 7, 2025 Comments: 0

Safeguarding Wildlife, Securing Harmony”

Context: Based on the editorial “Living with animals – the challenges and the solution” published in The Indian Express. Announcement: PM announced a center for managing human-wildlife conflict. (Press Information Bureau (PIB) release or official government announcement.) Importance of Wildlife ...

Explore Our Blog