UPSC GS Mains: How to Improve Answer Writing

Disclaimer: These are just my inferences from my experiences last year. May be all this is wrong… may be I get as bad or even worse marks than last years. No guarantees. But that is life… When obstacles come, we change course and try to steer our way around them somehow :-)

The Background

I gave my first mains in 2012. My preparation was excellent and I thought I had written all the papers reasonably well. That my preparation was not lacking can be seen from the fact that I got in 130s in prelims GS paper and since prelims I had only improved the preparation. The interview was good as well.

Yet I could secure a rank in only 200s. Everybody except me thought I would have got less marks in History since I had no background in it (took it only out of interest). Economics was my other optional. But when the final marks came, the picture turned out to be entirely different – and frankly darker for me. For it turned out that it was not history which sunk me, but GS and Essay. I had scored reasonably good marks in Economics (280s) and History (240s) and interview (210s) but failed miserably in GS (170s) and Essay (80s). GS and Essay combined took me over 80 marks below average!

I was disappointed and frustrated – for I didn’t know what went wrong in GS and Essay. And the bad news was that from 2013, weight of GS and Essay, where I had scored miserably, would become more than double while that of optional, where I had done well, would be halved. Had history been the culprit, I could have simply dropped it next time and given the exam again without doing anything extra. But it was now GS, with double marks, and I didn’t know what went wrong and what to improve – forget about how to improve. Its like being stranded in the middle of Pacific on a small boat without sails and rudder in a dark hurricane night… And yet we are expected to find the coast on the next morning!

Anyways, one thing would be clear to anybody given the above marks distribution – the main problem lay not in preparation but in answer writing. And so it had to be answer writing alone which had to be improved drastically, even at the cost of preparation.

So how to write better GS answers

So I analyzed, joined 3 test series (vision ias GS + vision ias essay + Synergy GS), wrote answers, sent them to some friends for feedback, discussed with my father and finally felt following things were important.

– GS and optionals answers are completely different. In optionals, one can write a PhD types answer and be confident of getting good marks – because the examiner who is checking an economics paper would be an economist herself. But in GS this will not work. The examiner who is checking the economics answer in a GS paper in more likelihood would not be an economist. She would be a generalist with limited knowledge and interest in the subject.

– So if you write some specialized answer or use some specific terms or models from your optional while writing a GS answer, good luck! Most probably the examiner would not understand/appreciate it. And she would not spend additional time or effort in going back and study the term/model you wrote. She would simply give a zero.

– Similarly, if you write any unconventional answers like say Aadhar cash transfers are not going to increase inflation and even give a logic based proof from basic economics, the examiner will not give any marks. Because she would have read mainstream media where everybody is saying Aadhar transfers would increase inflation. And she has no interest in taking the pain to understand a contrarian view point in your answer. Her life would be much simpler if she just gives a zero.

– So the bottom line is, our answer should be such that they make the life easier for the examiner. She would be happy while reading them and would give us more marks. So no PhD types stuff… just stick to basic points and present them in a way which is easy to read.

– Next, this exam is not a science exam. This is a generalist exam, a humanities exam. Its like a BA or MA exam. In a science exam, if there are 5 points in an answer but point number 1 is the most important point and rest are insignificant as compared to point 1, so if you cover point 1 only in your answer in great detail showing good understanding, you would get good marks. But in a BA, MA exam this doesn’t work. You have to not only write those 5 points, but also invent 2 more points and write. Only then the examiner would feel that you have covered all ‘relevant’ points. So one cannot ignore the trivial points and has to blindly write everything.

– Going further, in BA MA exams, if the question asks something say what is RBI doing to contain inflation and you answer all the points (including the trivial points) on what is RBI doing to contain inflation, you still won’t get good marks. Your answer still won’t be considered complete. In BA MA exams, an answer would be complete if we also write a bit about what preceded the question and what succeeded it. For example, in this RBI question, if I also write 1 para in the beginning on what is causing this high inflation and 1 para in the end on the effect of high inflation if RBI is not able to control, my answer would be considered better (even though a science student would find all this utter stupidity).

– Now the question arises, how to think of so many points in the exam hall? Well, because this is a BA MA exam and doesn’t require any specialist knowledge, the good thing is, if we just pause and think for 1-2 minutes before writing an answer in the exam hall, we would be able to recollect 70-80% of the points.

– Another thing which helps is to beforehand prepare a list of points for few broad topics. For example, one can remember 10 points on how to improve citizen charter, 10 points on how to remove corruption, 8 points on how to contain inflation, 7 on small states or not, 10 on problems of panchayats and so on… The good thing is these broad topics are limited and most questions in the GS exam come only as a subset of these broad topics or ask a particular aspect of these broad topics. Once you remember this block of points on any broad topic and a question comes asking you to look at the topic from a particular angle, you can easily and very quickly modify your existing points to meet the demands of the question. Then you just have to write 1 para each on what came before the question and what happens after the question, and your answer is complete.

– Finally on presentation style. Many coachings tell many things. Don’t believe in any of them. Just use common sense. The examiner is a human being who is checking your copies not because of any interest but because its her job. She would like to get over with it as soon and with as little mental pain as possible and attend to rest of her life. So just present your answers in a way which you think makes her life easier. Personally, I preferred writing point and section wise answers this time with proper section and sub sectional headings. It gives an impression that I have covered all aspects, given a thought to the answer before writing and created a structure. But the choice is yours.

Conclusion

Through this article, I just hope to help some others who may be finding themselves in the same small, rudderless boat in the middle of the Pacific as I found myself after the result last year – and may be again will find after this year’s results.

Anyways, I understand that merely reading the above words is not sufficient in improving answer writing. One has to practice. I didn’t have any systematic guidance and practiced in near darkness. May be I am still in dark. But I want to try my best to make life easier for other deserving students. So mebbe if somebody wants, he/she may post her answers along with the question to any GS questions here in the comments. I would try to come back with feedback. It may take some time due to heavy training activities and interview prep here, but I would surely come back. If I feel I won’t be able to do justice to the question, I would clearly say so. Other fellow readers may also chip in. Les see how it goes. Even if a few are able to benefit by this to whatever extent, the purpose would be served.

Indian Economy: Budget Discussion

This budget has presented a lot of data… Fiscal deficit, current account, inflation, gdp growth, manufacturing and what not… And it has presented a rather rosy picture before us. Fiscal deficit would be reined in at 4.6% (below even the targeted 4.8%), current account deficit is down to below $40 billion (vs estimates of over $90 billion in the beginning), inflation has come down and growth is picking up (expected to be 4.9% this year vs 4.5% in the last).

In this article, we intend to decode all these numbers, take a stock of the situation and analyse the true state of the economy. We will look at each of the major indicators of the economy – current account, fiscal deficit, inflation, investment and manufacturing – analyze how we did in 2013-14 and see what lies ahead.

Current Account Situation – Is the crisis over?

We began the year 2013-14 with gloomy current accout deficit (CAD) predictions of over $90 billion. CAD was easily the biggest macroeconomic threat we faced then which could derail our entire growth story and render us vulnerable to an ASEAN like shock during 1997. We desperately needed capital inflows to finance this gap. And then came the talks of US QE tapering. All the capital inflows stopped and the result was a major selloff in rupee. The situation became so grim that talks of an IMF bailout as in 1991 were in the air.

Compared to that we are clearly in a much better position now. Now the CAD is only expected to be $45 billion for the year. Our goods exports during the period April 13 – Jan 14 have grown at a healthy (when compared to rest of the world) rate of +5.7% over previous year to $257 billion while imports have fallen for the firt time in many years by -7.8% to $377 billion. Thus the goods trade deficit has come down to $120 billion in this period compared to $166 billion during April 12 – Jan 13.

The pickup in exports is a really welcome sign for the future. In fact, the growth rate in exports was in double digits from July 13 – October 13. It looks like the rupee depreciation and revival of growth in US are finally translating into higher export orders for us which is good for the future as these factors are likely to sustain.

However, everybody knows that this compression of CAD is basically an import compression story for India and that too largely gold. Various steps have led to a virtual halt in import of gold in India. But this gold import supression is not sustainable as gold smuggling will rise.

Also, another big factor behind this import compression was a sharp drop in import of capital goods (power plants etc.) and coal. But this is not a healthy sign. Capital goods and coal imports have not gone down because our production has increased. They have gone down because our fresh investments have stalled due to various structural problems (land acquisition, multiple delayed clearances etc.). So this compression is not any cause to cheer but a symptom of a bigger underlying problem which the new government needs to address with urgency.

Finally, a large part of our import bill i.e. oil imports remained constant (only +1.2% growth) simply because the oil prices remained constant because US didn’t attack Syria and a nuclear deal with Iran is on the cards. These positive factors are likely to sustain over the near horizon but they are out of our control and so we need to have some backup plan in case things go wrong.

Concluding, yes the crisis is over and will not return in near future. There are positive signs which are likely to sustain in near future. At the same time, we cannot afford to be complacent and must address the structural problems which have brought fresh investments to a screeching halt in our economy.

Fiscal Deficit: The 4.6% magic

A reduction in the headline fiscal deficit number to 4.6% may appear to many as a welcome sign and may indicate that the economy is on a sounder footing. But the real issue is the QUALITY of this fiscal deficit reduction. If the deficit is reduced by an increase in taxes or decrease in wasteful spending, then it is a welcome sign. But if it is reduced by merely postponing the expenditures to next fiscal and beyond and relying on one time revenue measures, it doesn’t present a good report card.

This cut in fiscal deficit headline number has been achieved mainly by the following measures:

– On the revenue side, the regular tax revenues have been disappointing. The last budget had estimated tax revenues to grow by 19% as our economy would have grown by 6%. But the real growth in economy was only 4.9% (that too estimated) and hence tax revenues growth only 12%. The actual tax to GDP ratio has declined from 10.9% to 10.2% this year. Similarly the disinvestment proceeds too were dismal at Rs. 15K crores vs estimated Rs. 40K crore in the last budget. However the successful 2G auction which raised Rs. 67K crore vs estimated Rs. 40K crore has given a partial relief. Also the government has resorted to extraordinary dividends from PSUs to fill up the revenue shortfall. But the questions to ask is whether the 2G revenues would be available next year also? And can we endlessly squeeze the PSUs to pay huge extraordinary dividends year after year? Clearly no… the revenue situation is definitely not good.

– The expenditure side presents an even more unconvincing picture. The real amount of subsidies has greatly exceeded the amount predicted in the last year’s budget and so while presenting this budget, the excess amount has simply been pushed over to be paid during the next year. This is possible because the government recognizes expenses when it actually pays the cash and not when they are incurred. For ex. if I buy a car today, i incur an expense of Rs. 10 lac today. It should appear as an expense in my accounts as of today. But in government accounting, an expense is recognized when the cash is paid for the car. So if the government decides to pay for the car in April instead of today, the expense would be shown in next year’s budget and not this year’s! So this means that the finance minister can simply decide not to pay the subsidy bills for say January – March this year and thus reduce expense for this year and hence the fiscal deficit. But bills are bills and have to be paid. So they would be paid in April and would show up as a huge expense next year. Independent experts have estimated that large amounts of fuel and fertilizers subsidies have been pushed to next year this way.

– Government expenditure is of 2 types – one which creates assets which would be used in future and one which is used to meet present expenses. The latter forms a part of the revenue deficit while overall expenses form part of fiscal deficit. Headline fiscal deficit has come down to 4.6% but revenue deficit has remained sticky at around 3%. This means what? That the expenditure being reduced is not the present expenses but the capital creating investment! In fact, this year such capital creating investment has been reduced by Rs. 91K crores! This is very bad for the economy. Because if we don’t create capital assets today, how will we pay our debts tomorrow? If we don’t invest today, where will the growth come from? This indicates weakening of economy. Question now arises why we are reducing the capital investment expenditure which shouldn’t be reduced and not reducing the current expenses expenditure (subsidy etc.) which should be reduced? This is because reducing subsidies costs votes while no one cares about the capital expenditure.

– Finally a comment on assumptions for next year which the budget makes in order to achieve the target of 4.1% fiscal deficit for the next year.
– On the revenue side, it assumes a 19% growth in tax revenues again. It had the same assumption last year as well @ 6% growth but with the growth remaining below 5%, the actual revenue growth turned out to be only 12%. This year the assumption of 19% is at a nominal growth rate of 13% (6% growth assumption last year was real growth rate not nominal). Nominal growth rate is real growth + inflation. Now either we are assuming that growth this year will bounce back to 6% or higher or we are assuming a very high inflation of 8% and above. The former doesn’t look likely (we will examine it later). Also when we account for the 2% reduction in excise duty, the cridibility of the 19% revenue growth assumption goes down even further.
– For the disinvestment, again the target has been set to Rs. 36K crores. It was Rs. 40K crores last year vs Rs. 15K crores only achieved.
– On the expenditure side, first we take a look at the subsidies. As mentioned earlier, large amounts of fuel and fertilizers subsidies have been pushed to be paid this year. But the budget doesn’t make any additional provisions for it. Fuel subsidies provided for this year are Rs. 65K crore only out of which Rs. 35K crores are from last year. Also it seems that the increase in burden due to roll back of cap on subsidised gas cylinders and Aadhar linked transfers for LPG subsidy have not been accounted for.
– Similarly fertilizers subsidies allocated for next year have remained largely same at Rs. 67K crore. But the government has recently increase gas prices (which would incidentally greatly benefit Lord Ambani). Increased gas prices would mean increased subsidy burden on fertilizers since fertilizers use gas as an input (80% of fertilizer costs are gas only). But no provision seems to have been made for this in the budget.
– Food subsidy has been pegged at Rs. 115K crores. However, the combined expenditure on all food subsidies this year was Rs. 125K crores. With all the food inflation and the Food Security Act, it is difficult to imagine how will the food expenditure come down!

Overall, commenting, the quality of fiscal consolidation this year has been poor. And the prospects for the next year too look poor. This is not good for the economy. It needs better economics, not imaginative accounting.

Savings and Investment

– Without commenting on the claims and counter claims on policy paralysis, one thing is clear. Private sector investment is just not happening. Government and PSUs are doing that but that can happen only till a particular limit. To restart the growth engine, it is the private investments which have to flow in. But from the peak, our savings rate has declined from 38% to 30% and fixed capital formation rate (or the investment rate roughly) from 36% to 28.5% today.

GDP Growth

The budget has cleverly steered clear from projecting any real growth rate for GDP next year. But it has assumed a growth rate of 4.9% for 2013-14. Given the growth rate for the first 2 quarters was 4.5%, this translates into a growth rate assumption of 5.2% for the last 2 quarters. However, recently released figures for Q3 put its growth at 4.7% only. The message is clear, there is still no recovery which we have ben hearing about from at least the past 2 years.

Inflation

The budget tells us that ‘inflation is moderating’. This familiar phrase we have been hearing for last so many years. But the truth is that only the January inflation data showed a downtick (CPI down to 8% and WPI to 5%). But if we look at the average CPI inflation in this year so far, it has been well into double digits. I am not saying that inflation is not moderating. But we need more than just 1 downtick to establish say it is a trend!

Manufacturing

The story of manufacturing captures in a very fine way everything that has gone wrong in India in the past few years. During the boom years of 2004-2008, manufacturing growth in India was well over 15-16%. Articles had even started appearing speculating if India would become the new manufacturing powerhouse of the world shadowing China !!

Fast forward to 2012-13 manufacturing grew at an anemic 1.1% and we thought things could go no worse. This reminds me of my story during the college days. In 2nd year, I hardly studied anything, didn’t attend most of the classes and got a CGPA of 6.8 / 10. I thought this is my bottom. This is my ‘zero effort’ CGPA. What could go worse. Next semester, I flunked in 2 courses and got 3.6 / 10! Manufacturing growth so far this year has been – 0.2%.

Situation is desperate in manufacturing, but thankfully the budget has taken a significant rescue step in reducing the excise duty on automobile sector and various capital goods and machinery industries.

Conclusion

We have definitely come out of the crisis situation. CAD no longer poses the explosive threat it posed last year. We have also taken important steps to save the manufacturing sector from dying. We can also hold our breath and wait for the next few inflation numbers with anticipation. But in order to really see our economy stable and healthy again, we have to improve the quality of our fiscal correction and restart the private investments. Let us hope better times lie ahead.