UPSC Mains 2016 GS Paper 2 Q13: model answer
Has the Indian governmental system responded adequately to the demands of Liberalization, Privatization, and Globalization started in 1991? What can the government do to be responsive to this important change?
What the question wants
Assess whether India's government machinery adapted adequately to liberalisation, privatisation and globalisation after 1991, and suggest how it can respond better.
How to structure it
Two parts: adequacy, then measures.
- What LPG demanded
- Where the system adapted
- Where it lagged
- Measures
How to think it through
LPG changed the state's job from controller to regulator and facilitator. Regulators, digital taxes and IBC show adaptation; contract enforcement, land, labour courts and the bureaucracy's mindset show lag.
Model answer
In July 1991, with foreign reserves enough for about two weeks of imports, India dismantled the licence raj in one budget. The economy changed overnight; the government that ran it changed much more slowly.
What LPG demanded of government
A shift from controller to regulator, facilitator and service provider: fewer permissions, faster decisions, independent regulators and global standards.
Where the system responded
- Regulators: SEBI (1992), TRAI (1997), IRDA (1999), CCI (2003).
- Tax reform: GST (2017) and faceless assessment.
- Insolvency and Bankruptcy Code (2016) for exit.
- E-governance: MCA21, single-window clearances, Ease of Doing Business reforms.
- Disinvestment and new PSU policy.
Where it lagged
- Contract enforcement: courts take years; India ranked low on this in the Doing Business reports.
- Factor markets: land acquisition and labour laws remained rigid; the four labour codes took until 2025 to come into force.
- Bureaucratic culture: rule-bound, risk-averse, many layers.
- States: uneven capacity; inspector raj persists in places.
- Social sector: health and education spending stayed low, so growth did not reach everyone.
How it can respond better
- Civil service reform: domain expertise, performance appraisal, lateral talent.
- Judicial reform: commercial courts and alternate dispute resolution.
- Regulatory governance: independent, accountable regulators with clear mandates.
- Decentralisation and capacity of local bodies.
- Invest in human capital to make growth inclusive.
The government has responded in law more than in mindset. The next stage of reform is administrative, not economic.
Draw: A before-and-after table: 1991 controller state vs regulator and facilitator state, with ticks and crosses.
Keywords, cases and data to drop in
1991 crisis, regulatory state, SEBI 1992, CCI, GST 2017, IBC 2016, commercial courts 2015, labour codes, ease of doing business, 2nd ARC.
Where most answers lose marks
- Writing an economics answer. Focus on the government system.
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Question text as printed in the official UPSC Civil Services (Main) question paper. The model answer is original Battle IAS work; use it to learn structure, not to memorise.
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