AIR 5 · CSE 2024 · GS3 · 56 pages

Aakash Garg: GS3 answer copy

20 answers by Aakash Garg, as written in the test. Each question opens a page with how other toppers answered it.

The questions

The answers

Question 1 · 10 marks · 118 words written

The challenge of a high trade deficit haunts India. Analyze its impact on the Indian economy.

Opening · a figure

In FY2023-24, India exported goods and services worth $778 bn while imports were about $836 billion showing significant trade deficit.

Body · points and prose

Diagram
Challenges of -> devaluation and depreciation high trade of currency deficit -> imported inflation | -> Vulnerability to supply chain -> less jobs and industries shocks in India

Impact of high trade deficit:

  1. It leads to devaluation of currency making imports further expensive.
  2. India's credit rating is impacted.
  3. Dependence on imports for basic needs like palm oil and pulses leads to inflation.
  4. Cheap imports stifle innovation in Indian economy.
  5. Fiscal planning becomes difficult. Government can earn more by increasing exports.

Way Forward

  1. Primary Sector: Focus on food processing and tackling sanitary and phytosanitary measures
  2. Secondary Sector: Import substitution and become part of global value chains.
  3. Service Sector: Global capability centres to prevent shift of industry to other countries.

Close · a way forward

None written.