UPSC Mains 2016 GS Paper 4 Q13: model answer
ABC Ltd. is a large transnational company having diversified business activities with a huge shareholder base. The company is continuously expanding and generating employment. The company, in its expansion and diversification programme, decides to establish a new plant at Vikaspuri, an area which is underdeveloped. The new plant is designed to use energy efficient technology that will help the company to save production cost by 20%. The company's decision goes well with the Government policy of attracting investment to develop such underdeveloped regions. The Government has also announced tax holiday for five years for the companies that invest in underdeveloped areas. However, the new plant may bring chaos for the inhabitants of Vikaspuri region, which is otherwise tranquil. The new plant may result in increased cost of living, aliens migrating to the region, disturbing the social and economic order. The company sensing the possible protest tried to educate the people of Vikaspuri region and public in general that how its Corporate Social Responsibility (CSR) policy would help overcome the likely difficulties of the residents of Vikaspuri region. In spite of this the protests begin and some of the residents decided to approach the judiciary as their plea before the Government did not yield any result. (a) Identify the issues involved in the case. (b) What can be suggested to satisfy the company's goal and to address the residents' concern?
What the question wants
Identify the issues in a company's plan to set up a plant in a tranquil underdeveloped region, and suggest how to meet both the company's goal and the residents' concerns.
How to structure it
Issues, reconciliation.
(a) Issues
(b) Measures for company and residents
How to think it through
Issues: development vs local way of life; cost of living rise; in-migration ('aliens'), identity; consent; CSR as PR vs genuine; trust deficit; tax holiday benefits; environmental and cultural change; courts as last resort indicating failure of dialogue; state as facilitator. Measures: meaningful consultation, social impact assessment, local hiring quotas with skilling, local procurement, housing for migrant workers to prevent price rises, infra for town (schools, hospitals), benefit sharing, grievance redress, community advisory board, phased construction, CSR co-designed with residents (Companies Act s.135 2%), monitoring by independent body.
Model answer
Stakeholders
- Vikaspuri residents; the company and shareholders; workers who will migrate; the government; the courts.
Dilemmas
- Growth and jobs vs tranquillity and identity; corporate profit and tax benefits vs community consent.
Options
- Push ahead with PR; abandon the project; redesign it with the community.
The company has explained its CSR policy to the people. It has not asked them what they want. That one-way conversation is why the matter has reached the courts.
(a) Issues involved
- Development vs way of life: the plant brings jobs and roads, but also noise, crowds and a different culture.
- Rising cost of living: land, rent and food prices rise when a large workforce arrives.
- In-migration and identity: residents fear becoming outsiders in their own region.
- Consent and participation: the decision was made between the company and the government; residents were informed, not consulted.
- CSR as public relations: promises made to win approval rather than designed with the community.
- Trust deficit: the government did not respond to their plea, so they turned to judiciary.
- Who gains: tax holidays and 20% cost savings go to the company; disruption stays with residents.
- Environment: even energy-efficient plants use water and land.
(b) Meeting both goals
- Listen first: open public hearings and a social impact assessment by an independent agency.
- Community advisory board of residents, panchayat leaders, women and youth, with a real say in CSR spending under Section 135 of the Companies Act.
- Local jobs: a skilling centre in advance and a target share of jobs for local youth.
- Local business: buy food, transport and services locally.
- Protect the cost of living: build housing for incoming workers so that rents in old Vikaspuri do not explode.
- Shared infrastructure: schools, a hospital and water supply open to all residents.
- Respect culture: protect local festivals, sacred sites and language; induct migrant workers on local customs.
- Environmental safeguards: water recycling and pollution monitoring, with public data.
- Grievance redress with time limits, and a third-party annual audit of promises.
- Use the court process positively: offer mediation instead of a long legal fight.
- Government's role: link the tax holiday to meeting these commitments.
Development that the residents help design becomes their development. Development imposed on them stays the company's, however many brochures say otherwise.
Draw: A two-column table: 'resident concern' and 'design response', with each row matched.
Keywords, cases and data to drop in
underdeveloped region, tax holiday, cost of living, in-migration, identity, consent, CSR Section 135, social impact assessment, community advisory board, local hiring, skilling, worker housing, benefit sharing, grievance redress, third-party audit, mediation.
Where most answers lose marks
- Treating CSR spending alone as the answer; the issue is participation and consent.
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Fresh examples from current affairs
Supreme Court: no prior approval under Section 17A needed to probe a bribe demand
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UPSC angle: Prelims: Sections 7, 7A, 17A and 19 of the PC Act. · Mains GS-II/GS-IV: honest officers versus accountability.
19 Oct 2026Learn the concept
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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