money essay upsc

UPSC Essay Topic wise Question Papers of last 31 years (1993-2023) for Civil Services IAS/IPS Exam Free Download

In the UPSC mains examination, essay paper is worth 250 marks and three hours. Here is the topic wise questions from the earlier years for the benefit of civil service IAS IPS aspirants.

1.1 India Since Independence

1.2 federalism, decentralization, 1.3 administration, 1.4 judiciary, 1.5 poverty, social justice, 1.6 indian society, culture and values, 1.7 media, tv & cinema, literature, 2.1 growth vs development, 2.2 environment vs development, 2.4 sectors of economy, 3.1 values in education, 3.2 scheme implementation, 3.3 higher education, 4.1 character, honesty, ethics, 4.2 knowledge, 4.3 compassion, 4.4 truth and reality, 4.5 youth, discipline, 4.6 towards excellence, 5.1 @national politics, 5.2 @world / quote type, 5.3 empowerment overall, 5.4 compared to men, 6.1 globalization, 6.2 international org./ bilateral, 6.3 security, 6.4 history, 7.1 science and religion, 7.2 science and education, 7.3 computer and internet, 7.4 sci-tech: others, appendix: linear paper of upsc essay 2023, appendix: linear paper of upsc essay 2022, appendix: model answer pe free lecture & powerpoint, appendix: syllabus of essay paper in upsc, 1 india: democracy, administration, society, culture.

• Is the Colonial mentality hindering India’s Success? -2013
• In the context of Gandhiji’s views on the matter, explore, on an evolutionary scale, the terms ‘Swadhinata’, ‘Swaraj’ and ‘Dharmarajya’. Critically comment on their contemporary relevance to Indian democracy -2012
• Dreams which should not let India sleep. -2015
• Why should we be proud of being Indians? -2000
• Whither Indian democracy? -1995
• How far has democracy in India delivered the goods? -2003
• What we have not learnt during fifty years of independence. -1997
• What have we gained from our democratic set-up? -2001
• My vision of India in 2001 a.d. -1993
• Impact of the new economic measures on fiscal ties between the union and states in India. -2017
• Water disputes between States in federal India. -2016
• Cooperative federalism : Myth or reality. -2016
• Creation of smaller states and the consequent administrative, economic and developmental implication -2011
• Evaluation of panchayati raj system in India from the point of view of eradication of power to people. -2007
• Water resources should be under the control of the central government. -2004
• The language problem in India: its past, present and prospects. -1998
• There are better practices to “best practices”. -2021
• How should a civil servant conduct himself? -2003
• Politics without ethics is a disaster. -1995
• The VIP cult is a bane of Indian democracy -1996
• Need for transparency in public administration -1996
• The country’s need for a better disaster management system. -2000
• Politics, bureaucracy and business – fatal triangle. -1994
• We may brave human laws but cannot resist natural laws. -2017
• Justice must reach the poor -2005
• Judicial activism and Indian democracy. -2004
• Judicial activism. -1997
• A society that has more justice is a society that needs less charity. (- जिस समाज में अधिक न्याय होता है उस समाज को दान की कम आवश्यकता होती है।) – 2023
• There can be no social justice without economic prosperity but economic prosperity without social justice is meaningless (बिना आर्थिक समृद्धि के सामाजिक न्याय नहीं हो सकता, किन्तु बिना सामाजिक न्याय के आर्थिक समृद्धि निरर्थक है ) -2020
• Neglect of primary health care and education in India are reasons for its backwardness. -2019
• The focus of health care is increasingly getting skewed towards the ‘haves’ of our society. -2009
• Food security for sustainable national development -2005
• Reservation, politics and empowerment. -1999
• Culture is what we are, civilization is what we have (जो हम है, वह संस्कार; जो हमारे पास है, वह सभ्यता ) -2020
• Indian culture today: a myth or a reality? -2000
• Modernism and our traditional socio-ethical values. -2000
• The composite culture of India. -1998
• The Indian society at the crossroads. -1994
• From traditional Indian philanthropy to the gates-buffet model-a natural progression or a paradigm shift? -2010
• New cults and godmen: a threat to traditional religion -1996
• Biased media is a real threat to Indian democracy. -2019
• Responsibility of media in a democracy. -2002
• Role of media in good governance -2008
• Does Indian cinema shape our popular culture or merely reflect it? -2011
• How has satellite television brought about cultural change in Indian mindsets? -2007
• Is sting operation an invasion on privacy? -2014
• Mass media and cultural invasion. -1999
• The misinterpretation and misuse of freedom in India. -1998
• Poets are the unacknowledged legislators of the world (कवि संसार के अनधिकृत रूप से विधायक होते हैं) – 2022

2 Economy, Development

• Poverty anywhere is a threat to prosperity everywhere. -2018
• Digital economy: A leveller or a source of economic inequality. -2016
• Innovation is the key determinant of economic growth and social welfare. -2016
• Near jobless growth in India: An anomaly or an outcome of economic reforms. -2016
• Crisis faced in India – moral or economic. -2015
• Was it the policy paralysis or the paralysis of implementation which slowed the growth of our country? -2014
• GDP (Gross Domestic Product) along with GDH (Gross Domestic Happiness) would be the right indices for judging the wellbeing of a country-2013
• Can capitalism bring inclusive growth? -2015
• Resource management in the Indian context. -1999
• Economic growth without distributive justice is bound to breed violence. -1993
• Forests are the best case studies for economic excellence (आर्थिक समृद्धि हासिल करने के मामले में वन सर्वोत्तम प्रतिमान होते हैं।) – 2022
• Alternative technologies for a climate change resilient India. -2018
• Should a moratorium be imposed on all fresh mining in tribal areas of the country? -2010
• Urbanisation and its hazards -2008
• Protection of ecology and environment is essential for sustained economic development. -2006
• Urbanization is a blessing in disguise. -1997
• Ecological considerations need not hamper development. -1993
• Globalization would finish small-scale industries in India. -2006
• Multinational corporations – saviours or saboteurs -1994
• Special economic zone: boon or bane -2008
• Is the criticism that the ‘Public-Private-Partnership’ (PPP) model for development is more of a bane than a boon in the Indian context, justified ?-2012
• Farming has lost the ability to be a source of subsistence for majority of farmers in India. -2017
• BPO boom in India. -2007
• Tourism: Can this be the next big thing for India? -2014
• Are our traditional handicrafts doomed to a slow death? -2009

3 Education

• Education is what remains after one has forgotten what one has learned in – school. (- शिक्षा वह है जो विद्यालय में विधालय में सीखी गई बातों को भूल जाने के बाद भी शेष रह जाती है।)
• Destiny of a nation is shaped in its classrooms. -2017
• Education without values, as useful as it is, seems rather to make a man more clever devil-2015
• Independent thinking should be encouraged right form the childhood. -2007
• Are the standardized tests good measure of academic ability or progress? -2014
• Irrelevance of the classroom. -2001
• Is the growing level of competition good for the youth? -2014
• Literacy is growing very fast, but there is no corresponding growth in education. -1996
• Is an egalitarian society possible by educating the masses ? -2008
• What is real education? -2005
• “Education for all” campaign in India: myth or reality. -2006
• Restructuring of Indian education system. -1995
• Privatization of higher education in India. -2002
• Credit – based higher education system – status, opportunities and challenges -2011

4 Quote based, Philosophy, Ethics

• A smile is the chosen vehicle for all ambiguities (हर असमंजस के लिए मुस्कराहट ही चुनिन्दा साधन है) – 2022
• Philosophy of wantlessness is a Utopian, while materialism is a chimera. -2021
• Your perception of me is a reflection of you; my reaction to you is an awareness of me. -2021
• Simplicity is the ultimate sophistication (सरलता चरम परिष्करण है ) -2020
• Ships don’t sink because of water around them ships sink because of water that gets into them (जहाज अपने चारों तरफ के पानी के वजह से नहीं डूबा करते, जहाज पानी के अंदर समां जाने की वजह से डूबता हैं ) -2020
• Life is a long journey between being human and being humane.  (मनुष्य होने और मानव बनने के बीच का लम्बा सफर ही जीवन है)-2020
• Values are not what humanity is, but what humanity ought to be -2019
• Best for an individual is not necessarily best for the society -2019
• Courage to accept and dedication to improve are two keys to success -2019
• Wisdom finds truth -2019
• A people that values its privileges above its principles loses both. -2018
• Customary morality cannot be a guide to modem file. -2018
• Need brings greed, if greed increases it spoils breed. -2016
• Character of an institution is reflected in its leader. -2015
• With greater power comes greater responsibility. -2014
• Words are sharper than the two-edged sword. -2014
• Attitude makes, habit makes character and character makes a man. -2007
• He would reigns within himself and folds his passions and desires and fears is more than a king. -1993
• Thinking is like a game, it does not begin unless there is an opposite team. (- सोच एक खेल की तरह है, यह तब तक शुरू नहीं होता है जब तक कि एक विपरीत टीम/पक्ष न हो।) – 2023
• Mathematics is the music of reason. (- गणित ज्ञान का संगीत है।) – 2023
• The real is rational and the rational is real. -2021
• Mindful manifesto is the catalyst to a tranquil self (विचारपरक संकल्प स्वयं के शांतचित्त रहने का उत्प्रेरक है )-2020
• ‘The past’ is a permanent dimension of human consciousness and values. -2018
• A good life is one inspired by love and guided by knowledge. -2018
• There is nothing either good or bad but thinking makes it so. -2003
• Disinterested intellectual curiosity is the lifeblood of civilisation. -1995
• Joy is the simplest form of gratitude. -2017
• Compassion is the basic of all morality of the world -1993
• Lending hands to someone is better than giving a dole. -2015
• Be the change you want to see in others (Gandhi)-2013
• Just because you have a choice, it does not mean that any of them has to be right (केवल इसलिए कि आपके पास विकल्प हैं, इसका यह अर्थ कदापि नहीं है कि उनमें से किसी को भी ठीक होना ही होगा) – 2022
• Reality does not conform to the ideal, but confirms it. -2018
• Truth is lived, not taught -1996
• When money speaks, the truth is silent. -1995
• Search for truth can only be a spiritual problem. -2002
• The time to repair the roof is when the sun is shining (छप्पर मरम्मत करने का समय तभी होता है, जब धूप खिली हुई हो) – 2022
• You cannot step twice in the same river (आप उसी नदी में दोबारा नहीं उतर सकते) – 2022
• Discipline means success, anarchy means ruin -2008
• Youth is a blunder, manhood a struggle, old age a regret -1994
• If youth knew, if age could. -2002
• Youth culture today. -1999
• Fifty Golds in Olympics: Can this be a reality for India? -2014
• Visionary decision-making happens at the intersection of intuition and logic. (- दूरदर्शी निर्णय तभी लिए जाते है अंतर्ज्ञान और तर्क का परस्पर मेल होता है।) – 2023
• Not all who wander are lost. (- भटकने वाले सभी गुम नहीं हो जाते।) – 2023
• Inspiration for creativity springs from the effort to look for the magical in the mundane (- रचनात्मकता की प्रेरणा अलौकिक ता में चमत्कार ढूंढने के प्रयास से उपजति है) – 2023
• A ship in harbour is safe, but that is not what ship is for (जहाज बन्दरगाह के भीतर सुरक्षित होता है, परन्तु इसके लिए तो वह होता नहीं है) – 2022
• Quick but steady wins the race. -2015
• Useless life is an early death. -1994
• Our deeds determine us, as much as we determine our deeds. -1995
• The paths of glory lead but to the grave. -2002
• The pursuit of excellence. -2001

5 Women empowerment

• Greater political power alone will not improve women’s plight. -1997
• Women’s reservation bill would usher in empowerment for women in India. -2006
• The new emerging women power: the ground realities. -1995
• Hand that rocks the cradle rules the world. -2021
• If women ruled the world -2005
• The hand that rocks the cradle -2005
• Patriarchy is the least noticed yet the most significant structure of social inequality (पितृ-सत्ता की व्यवस्था नजर मैं बहुत काम आने के बावजूद सामाजिक विषमता की सबसे प्रभावी संरचना है) -2020
• Fulfilment of ‘new woman’ in India is a myth. -2017
• If development is not engendered, it is endangered. -2016
• Whither women’s emancipation? -2004
• Empowerment alone cannot help our women. -2001
• Women empowerment: challenges and prospects. -1999
• Woman is god’s best creation. -1998
• Men have failed: let women take over. -1993
• Managing work and home – is the Indian working woman getting a fair deal ?-2012

6 International issues, Internal Security, History

• South Asian societies are woven not around the state, but around their plural cultures and plural identities. -2019
• Modernisation and westernisation are not identical concepts. -1994
• ‘globalization’ vs. ‘nationalism’ -2009
• National identity and patriotism -2008
• Globalizations and its impact on Indian culture. -2004
• The masks of new imperialism. -2003
• As civilization advances culture declines. -2003
• The implications of globalization for India. -2000
• My vision of an ideal world order. -2001
• India’s contribution to world wisdom. -1998
• The world of the twenty-first century. -1998
• Preparedness of our society for India’s global leadership role. -2010
• Technology as the silent factor in international relations (अंतर्राष्ट्रीय संबंधों मैं मौन करक के रूप मैं प्रौद्योगिकी) -2020
• Has the Non-Alignment Movement (NAM) lost its relevance in a multipolar world ? -2017
• Restructuring of UNO reflect present realities -1996
• The global order: political and economic -1993
• India’s role in promoting ASEAN co-operation. -2004
• Importance of Indo-US nuclear agreement -2006
• Management of Indian border dispute is a complex task. -2018
• In the Indian context , both human intelligence and technical intelligence are crucial in combating terrorism -2011
• Are we a ‘soft’ state ? -2009
• Good fences make good neighbours -2009
• Is autonomy the best answer to combat balkanization? -2007
• Terrorism and world peace -2005
• True religion cannot be misused. -1997
• History repeats itself, first as tragedy, second as farce. -2021
• Geography may remain the same ; history need not. -2010

7 Science-Technology

• Spirituality and scientific temper. -2003
• Science and Mysticism : Are they compatible ?-2012
• What is research, but a blind date with knowledge! -2021
• Modern technological education and human values. -2002
• Value-based science and education. -1999
• The march of science and the erosion of human values. -2001
• The process of self-discovery has now been technologically outsourced. -2021
• Rise of Artificial Intelligence: the threat of jobless future or better job opportunities through reskilling and upskilling. -2019
• ‘Social media’ is inherently a selfish medium. -2017
• Cyberspace and Internet : Blessing or curse to the human civilization in the long run -2016
• Increasing computerization would lead to the creation of a dehumanized society. -2006
• The cyberworld: its charms and challenges. -2000
• Computer: the harbinger of silent revolution. -1993
• Technology cannot replace manpower. -2015
• Science and technology is the panacea for the growth and security of the nation-2013
• The modern doctor and his patients. -1997
• The lure of space. -2004

Section-A (write any one)

• Thinking is like a game, it does not begin unless there is an opposite team. (- सोच एक खेल की तरह है, यह तब तक शुरू नहीं होता है जब तक कि एक विपरीत टीम/पक्ष न हो।)
• Visionary decision-making happens at the intersection of intuition and logic. (- दूरदर्शी निर्णय तभी लिए जाते है अंतर्ज्ञान और तर्क का परस्पर मेल होता है।)
• Not all who wander are lost. (- भटकने वाले सभी गुम नहीं हो जाते।)
• Inspiration for creativity springs from the effort to look for the magical in the mundane (- रचनात्मकता की प्रेरणा अलौकिक ता में चमत्कार ढूंढने के प्रयास से उपजति है)

Section-B (write any one)

• Girls are weighed down by restrictions, boys with demands – two equally harmful disciplines. (-लड़कियां बंदिशों के तथा लड़के अपेक्षा के बोझ तले दबे हुए होते हैं दोनों ही समान रूप से हानिकारक व्यवस्थाएं हैं।)
• Mathematics is the music of reason. (- गणित ज्ञान का संगीत है।)
• A society that has more justice is a society that needs less charity. (- जिस समाज में अधिक न्याय होता है उस समाज को दान की कम आवश्यकता होती है।)

Answer one-one essay from each section in 1000-1200 words

• History is a series of victories won by the scientific man over the romantic man (इतिहास वैज्ञानिक मनुष्य के रूमानी मनुष्य पर विजय हासिल करने का एक सिलसिला है।) – 2022
• A ship in harbour is safe, but that is not what ship is for (जहाज बन्दरगाह के भीतर सुरक्षित होता है, परन्तु इसके लिए तो वह होता नहीं है) & 2022
• Just because you have a choice, it does not mean that any of them has to be right (केवल इसलिए कि आपके पास विकल्प हैं, इसका यह अर्थ कदापि नहीं है कि उनमें से किसी को भी ठीक होना ही होगा) – 2022

Essay: Candidates may be required to write essays on multiple topics. They will be expected to keep closely to the subject of the essay to arrange their ideas in orderly fashion, and to write concisely. Credit will be given for effective and exact expression.

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UPSC Essay Topics - Important Essay Topics for UPSC Mains 2023

By vajiram & ravi.

Essay Course for UPSC

UPSC CSE Mains 2023 Essay Question Paper

UPSC Mains Optional Test Series

Mentorship Program for UPSC 2024

Understanding UPSC Essay Topics holds significant importance as it evaluates the candidate's ability to analyse, present arguments, and communicate effectively. In this article, we will explore the diverse range of UPSC essay topics, their significance, and essential tips to excel in this section. Get ready to enhance your writing and analytical skills and make a strong impression on the evaluators with well-crafted essays.

UPSC Essay Paper

The Essay paper in the UPSC Mains examination requires candidates to write multiple essays , each on a different topic, chosen from a given list of options. The essay topics for UPSC cover a wide range of issues, including social, economic, political, cultural, and philosophical aspects, both national and international.

The essay paper holds significant weightage in the UPSC Mains examination, contributing 250 marks out of the total 1750 marks . Scoring well in this section can have a considerable impact on the overall ranking and selection for the coveted civil services.

Weekly UPSC Essay Topics By Vajiram & Ravi

The UPSC Essay Paper is an opportunity for candidates to demonstrate their proficiency in expressing ideas and analysing complex issues. Vajiram & Ravi Pensive-Weekly Essay Writing Programme provides you with two Essay Topics every Saturday based on the previous year's question papers and the changing trends analysis. You can submit your Essay for peer evaluation on vajiramandravi.com. This will help you nourish your writing skills, give you clarity of thought, and build the capacity to express opinions in a logical and coherent manner.

Important Essay Topics for UPSC 2023

The purpose of the essay paper is to assess the candidate's ability to critically analyse a topic, present well-structured arguments, and communicate their ideas effectively. It also evaluates their knowledge of various issues, their clarity of thought, and their capacity to express opinions in a logical and coherent manner.

Some of the Important Essay Topics to prepare for the UPSC Mains Examination 2023 are:

• Gender Equality
• Environment/Urbanization
• Economic Growth
• Federalism/Decentralization
• Agriculture
• Economics 

UPSC Essay Topics on Philosophy

Every year, UPSC typically provides you with two or more essay topics centred around philosophical thoughts, Indian philosophical schools, or quotes from notable personalities. To effectively address these philosophical topics, you should refer to Philosophy Books to gain a foundational understanding. Here is a list of UPSC Essay Topics on Philosophy :

• Everything comes to him, who hustles while he waits.
• We are always blind as we want to be.
• You cannot step twice in the same river.
• A disciplined mind brings happiness.
• The price of Greatness is Responsibility.
• People would rather Believe than Know.
• Mind - A beautiful Servant? Or a dangerous Master?

UPSC Essay Topics on Art and Culture

The UPSC Essay Topics related to Indian society, art, and culture cover a wide range of subjects, offering great diversity. To gain knowledge about the static content on these topics, you should rely on fundamental books on society, as recommended for the exam. Here is a list of UPSC Essay Topics on Indian Art and Culture :

• Culture changes with economic development.
• Culture is what we are, Civilization is what we have.
• Social reform is a myth if places of worship are open only to all castes and not to all genders.
• Impact of Globalization on Indian Art and Culture.
• Caste System - India’s Enduring Curse.
• Godmen - A Threat to Indian Art and Culture?

UPSC Essay Topics on Science and Technology

UPSC essay topics on Science and Technology can largely be addressed through current affairs. You may also benefit from consulting a Science and Technology Book for UPSC to compose a comprehensive and well-rounded essay. Here are some UPSC Essay Topics on Science and Technology:

• Deglobalisation is good for the world.
• Science is organised Knowledge. Wisdom is Organised life.
• Technology is a Weapon against Poverty.
• Prioritising Education Technology for Global Growth.
• Technology is the silent factor in International Relations.
• Scientific and Technological Progress cannot be equated with Human Progress.

UPSC Essay Topics on Education

Education stands as one of the preferred UPSC Essay Topics, with an essay related to this subject often appearing in the paper each year. To tackle this topic effectively, you should stay abreast of Current Affairs , incorporating significant changes and advancements in the field. Let's explore some of the Essay topics for UPSC centred around education:

• Self Education is a lifelong curiosity.
• Education Breeds Peace.
• Education is a progressive discovery of our own ignorance.
• Education must also train one for quick, resolute and effective thinking.
• Schooling is not Education.

UPSC Essay Topics on Polity and Governance

To comprehensively address Polity and Governance topics, you should acquire fundamental knowledge from Polity Books for UPSC and Current Affairs. These resources offer static information about relevant issues and their historical context, which proves valuable while writing UPSC Essay Topics on Polity. Here are some Essay Topics on Polity and Governance:

• The Role of Politics in Development.
• Should Youth in India Consider Politics as a Career?
• Art, Freedom and Creativity will change society faster than politics.
• The politics of Identity is the Politics of the Weak.
• People should not be afraid of their Government. The Government should be afraid of its people.
• Government Surveillance - Good or Bad?

UPSC Essay Topics on Economy

Essays concerning economic growth are frequently included in the Essay Paper. To tackle these topics effectively, you should refer to Economy Notes for UPSC to gain a comprehensive understanding. Once the fundamentals are grasped, you can enhance their essays by incorporating examples, data, and statistics to create a multidimensional perspective. Here is a list of UPSC Essay Topics on Economy:

• We don't have to sacrifice a Strong Economy for a Healthy Environment.
• India, a $5 trillion Economy - Dream or Reality?
• Digital Economy: A leveller or a source of Economic Inequality?
• Innovation is the key determinant of social welfare and economic growth.
• Labour Reforms in India and its Role in Economic Growth.

UPSC Essay Topics on Social Issues

Social issues are a significant aspect of the UPSC essay paper, reflecting the candidates' understanding of societal challenges and their ability to propose viable solutions. These essays provide a platform for candidates to analyse, critique, and suggest measures for pressing social concerns. Topics related to social issues in the UPSC Essay paper may include:

• Inclusivity and Plurality are the hallmarks of a Peaceful Society.
• A Gender-sensitive Indian Society is a prerequisite for Women and Child Empowerment.
• The weaker sections of Indian Society - are their Rights and Access to Justice getting Better?

Previous Year UPSC Essay Topics

Practising previous year's essay topics will help you become familiar with the UPSC exam pattern , word limit, and the types of essay questions frequently asked in the Mains Examination. Analysing past essay topics will also allow you to identify recurring themes and trends, enabling you to prioritise their preparation accordingly. Regular practice with past essay topics will instil confidence in you, helping you feel more comfortable and prepared for the actual exam.

• Forests are the best case studies for economic excellence.
• Poets are the unacknowledged legislators of the world.
• History is a series of victories won by the scientific man over the romantic man.
• A ship in the harbour is safe, but that is not what a ship is for.
• The time to repair the roof is when the sun is shining.
• A smile is the chosen vehicle for all ambiguities.
• Just because you have a choice, it does not mean that any of them has to be right.

Tips to Excel in UPSC Essay Paper

• Understand the Topics: Thoroughly comprehend the essay topics, including the keywords and instructions. Choose a topic that aligns with your strengths and interests.
• Plan and Structure: Devote some time to plan your essay. Create an outline and organise your thoughts in a structured manner, with a clear introduction, body, and conclusion.
• Be Objective: Present balanced arguments and avoid a biased or one-sided approach. Consider multiple perspectives and present a holistic view.
• Provide Examples and Evidence: Support your arguments with relevant examples, data, quotes and evidence to strengthen your essay.
• Maintain Clarity: Write in a clear and concise manner. Use simple language and avoid jargon or overly complex vocabulary.
• Practice Regularly: Regular practice is essential to improve Essay writing skills. Write essays on diverse topics to enhance your versatility.
• Time Management: Allocate appropriate time for planning, writing, and revising each essay to manage time effectively during the examination.
• Revise and Edit: Review your essays for coherence, grammar, and structure. Make necessary edits to refine your work.

FAQs on UPSC Essay Topics

What are the important UPSC Essay Topics?

Here is a list of UPSC Essay Topics asked in Mains Examination previously:

• Culture is what we are, civilization is what we have.
• Simplicity is the ultimate sophistication.
• What is research but a blind date with knowledge?
• Best for an individual is not necessarily best for society.
• Wisdom finds truth.
• Ships don’t sink because of water around them, ships sink because of water that gets into them.
• Patriarchy is the least noticed yet the most significant structure of social inequality.
• Technology as the silent factor in international relations.

How do I Prepare for the UPSC Essay?

To prepare for the UPSC essay, focus on understanding the essay syllabus and past topics to identify recurring themes. Regularly practise writing essays on various topics to improve your writing skills and time management. Structure your essays with a clear introduction, main body, and conclusion.

Which is the best source to practise UPSC Essay Topics?

The best sources to prepare Essay for UPSC include official UPSC materials, newspapers, and magazines like The Hindu, Yojana , and Kurukshetra for current affairs, standard books on diverse subjects, government reports and publications, online platforms like PIB and PRS India, UPSC previous year papers for understanding the exam pattern, and regular practice of essay writing on various topics.

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Money Supply

The money supply is the total amount of money(currency+deposit money) present in an economy at a particular point in time. The standard measures to define money usually include currency in circulation and demand deposits.

The record of the total money supply is kept by the Central Bank of the country. The change in the supply of money in an economy can affect the price level of securities, inflation , rates of exchange, business policies, etc.

This is an important topic for the IAS exam . In this article, aspirants can find information related to the money supply in an economy.

Money Supply (UPSC Notes):- Download PDF Here

Aspirants would find the article very helpful in their preparation for the UPSC 2022  examination.

Money Supply – Latest Updates

According to recent Reserve Bank of India data, the uncertainty caused by the Covid-19 pandemic has led to a surge in the money supply. Know in detail about the Reserve Bank of India – RBI on the linked page. The currency held by the public increased by 8.2% since March-end 2020 and the savings and current account deposits decreased by 8%.

• The reason for this increase in Money supply is that there were higher cash withdrawals by depositors to meet needs during the lockdown period and also to safeguard themselves against salary cuts or job losses.
• People have curtailed their discretionary spending as they’re not sure of their permanent income.
• A rise in money supply usually is seen as a leading indicator of growth in consumption and business investments, but due to the Covid-19 pandemic, the rise did not encouraged either.
• Due to the decrease in discretionary spending the demand for industrial and manufactured goods alos decreased, therefore even the Lenders are not willing to take risks.

Types of Money

The types of money circulated in an economy are as follows:

Full-bodied money

It is the type of money whose value as money is equivalent to its value as a commodity. E.g. – Gold coin

Token Money/Credit Money/Paper Money

Value as money is much more than the value as a commodity. E.g. – Paper Currency

Representative full-bodied money

It is a kind of token money but is issued against the backing of equivalent value of bullion (gold and silver in bulk) with the issuing authority.

To know about the different monetary systems in the economy, refer to the linked article.

Monetary aggregates Concept – Money Supply

Types of bank deposits

• Current Account
• Fixed deposit
• Recurring deposit account

M1 = C + DD + OD (Narrow Money)

• Where C denotes Currency held by the public
• DD- Demand Deposits with Banks
• OD- Other deposits (Demand Deposits held by RBI)

Demand Deposits (DD) can be withdrawn on demand from banks.

Time Deposits (TD) can be withdrawn only after a specific time.

Total Deposits = DD+TD

Other deposits(OD) include demand deposits with the RBI.

DD with RBI can be held only by Quasi- Governmental agencies, international agencies, or former Governors of RBI.

M1 is known as narrow money as it includes only 100% liquid deposits which is a very narrow definition of the money supply.

M2 includes M1 and only saving account deposits with Post offices

M2 = M1 + Savings account deposits with Post Offices

Note- Post offices have no facility for the opening of current accounts. The types of accounts that can be opened are – Savings account, Fixed deposit, and Recurring deposit.

Though the size of post office saving accounts is negligible M2 term is used as all the deposits in M2 are not liquid.

M3 is called Broad money as along with liquid deposits it also includes time deposits thus making it a broad classification of Money.

M3 = M1 + TD (Broad Money)

TD – Time Deposits with Banks Includes fixed deposits, Recurring deposits, and time liability of Savings accounts

The most common measure used for money supply is M3

M4 = M3 + Total Deposits with Post Office

As the total deposits with the post office are negligible there is not much difference between M3 and M4

Money Supply Control

The money supply in the economy can be influenced by the Central Bank of the country. The money supply can be increased in an economy by purchasing government securities such as treasury bills and government bonds.

The reverse happens when the central bank tightens the money supply, by selling securities on the open market, drawing liquid funds out of the banking system. The prices of such securities fall as supply is increased, and interest rates rise.

Cash reserve ratio is an essential monetary policy tool used for controlling the money supply in the economy. It is a regulation implemented in almost every nation by the Central Bank of that country.

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The UPSC essay paper is one of the nine papers for the IAS main exam. With this, the scores obtained in the UPSC essay topics will also be considered in the merit list. Hence, it is important to cover all the aspects of the UPSC essay syllabus .

In this paper, candidates need to write two essays, each with a word limit of 1000-1200 words. Moreover, they are required to choose one IAS essay topic out of the four options in each section i.e. A and B.

The UPSC essay paper is conducted for 250 marks with one essay UPSC paper for 125 marks. Therefore, aspirants should use the best books and strategies to excel in this section.

In this article, we have compiled all the details of the UPSC IAS essay for the candidates aspiring for the upcoming civil services exam.

UPSC Essay Paper 2023 Structure

• As per the UPSC exam pattern , the essay paper is one of the nine subjects in the civil services main exam. In this paper, aspirants need to write essays on assigned UPSC essay topics .
• Candidates should practice writing essays on multiple topics in order to learn how to arrange their ideas and execute the same in the proper order.
• Furthermore, the UPSC essay paper will carry 250 marks with an exam duration of 3 hours.

UPSC Essay Previous Year Papers

The previous year’s UPSC essay paper is one of the finest resources to prepare well for this section. This will strengthen their vocabulary and writing skills and also provide them insights into the type of essay topics UPSC asked over the years.

Hence, we have compiled below the official UPSC essay previous paper PDF link for 2022, 2021, 2020, 2019, and 2018 for the reference of the candidates.

Best Strategy for UPSC Essay Writing

UPSC essays must be well-formatted and presented in a manner that the readers can easily understand without any obstacles. Above all, it must include the ideas about the issue mentioned in the question.

Candidates must note that the general essay papers also play an important role in compensating for the less scores in general studies and optional papers. Hence, it is advisable to focus on improving the vocabulary and writing skills from the first leg of the preparation.

Let’s look at the best strategy to score high marks in the UPSC essay topics in the main exam.

• Go through the entire UPSC essay syllabus to cover all the aspects of the section.
• Build a habit of reading newspaper editorials and journals every day. Going by the trend analysis, it is found that many essay questions were asked directly from current affairs in the past few years.
• Next, note down relevant quotes from the books/magazines/journal and implement them whenever required in the essay writing.
• Focus on IAS essay topics related to democracy, environment/urbanization, judiciary, social justice/poverty, philosophies, media & society, education, economic sector, etc as questions can be asked from these topics.
• Pick the essay topic very carefully. Also, it is advised to take some time to think about the topic and collect ideas and thoughts.
• One should make sure that the essay comprises sections like introduction, main body, theme, and conclusion.
• Moreover, aspirants can also reach out to their mentors, experts, seniors, or teachers for feedback on their essay writing. This will allow them to recognize their mistakes and focus more on their weak points for effective preparation.

Read More: How to write an essay for UPSC here!

Best Books for UPSC Essay Writing

Along with the best UPSC essay strategy , aspirants should also choose the finest books that comprise multiple essay topics UPSC for the exam. Here, we have shared below the best books and resources to strengthen the preparation of the general essay section:

• Monthly Current Affairs Magazines by OnlyIAS
• Only IAS Yogana Magazine
• Only IAS Praarambh Post-Independence India
• Only IAS Kurukshetra Magazine
• Only IAS Praarmabh Indian Society
• The Hindu (editorial articles)

Frequently Asked Questions (FAQs)

Q1. How to score 150 in UPSC essay?

Ans. One can score 150 marks on the UPSC essay paper by managing time effectively throughout the exam and avoiding any kind of deviation from the topic.

Q2. What are the topics for UPSC essay?

Ans. Some of the important IAS essay topics include democracy, environment/urbanization, judiciary, social justice/poverty, philosophies, media & society, education, economic sector, etc

Q3. What is essay paper 1 in UPSC?

Ans. The UPSC essay paper 1 is one of the nine papers for the IAS main exam. In this paper, candidates need to write two essays, each with a word limit of 1000-1200 words. The maximum mark is 250 with a duration of 3 hours.

Q4. Is UPSC essay tough?

Ans. Yes, the UPSC essay paper is moderately tough as per the past year’s exam analysis. However, it also depends on the aspirant knowledge of the topic.

Q5. How many pages is 1,000 words in UPSC?

Ans. 2 pages single-spaced or 4 pages double-spaced is about 1000 words in UPSC.

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Topic-Wise Essay Questions from UPSC Mains (1994 -2018)

The initial paper in the UPSC mains examination is the Essay (Paper I). In this section, candidates who have qualified in the prelims stage must compose two essays from a selection of provided topics. The paper holds a total of 250 marks, and these marks contribute to the determination of the Final Merit List. This article compiles all the essay topics presented in the UPSC mains exam from 1994 to 2018. Additionally, we have organized the essay questions from the last 25 years into distinct topics to facilitate your preparation.

Table of Contents

UPSC Essay Topics

Administration.

• 1994: The nexus of politics, bureaucracy, and business – a lethal trio.
• 1995: Politics bereft of ethics spells disaster.
• 1996: The VIP cult poses a detriment to Indian democracy.
• 1996: Advocating the necessity for transparency in public administration.
• 2000: Addressing the nation’s imperative for an improved disaster management system.
• 2003: Guidelines on the conduct expected of a civil servant.

Democracy/India since independence

• 1995: The trajectory of Indian democracy—where does it lead?
• 1997: Unlearned lessons in fifty years of independence.
• 2000: Reasons to take pride in our Indian identity.
• 2001: Assessing the gains from our democratic framework.
• 2003: Evaluating the effectiveness of democracy in delivering positive outcomes in India.
• 2008: Exploring national identity and patriotism.
• 2012: Examining the evolutionary significance of ‘Swadhinata,’ ‘Swaraj,’ and ‘Dharmarajya’ in the context of Gandhiji’s views and their contemporary relevance to Indian democracy.
• 2013: Is India’s success hindered by a lingering colonial mentality?
• 2015: Aspirations that should keep India awake.
• 2018: Navigating the intricate challenge of managing Indian border disputes.

Economic growth and development

• 1999: Managing resources in the Indian context.
• 2013: GDP (Gross Domestic Product) alongside GDH (Gross Domestic Happiness) as apt measures for assessing a country’s well-being.
• 2014: The hindrance to our country’s growth—was it policy paralysis or implementation inertia?
• 2015: Assessing the crisis in India—moral or economic in nature.
• 2016: Jobless growth in India: An aberration or a consequence of economic reforms.
• 2016: The digital economy: An equalizer or a source of economic inequality.
• 2016: Identifying innovation as the pivotal factor influencing economic growth and social welfare.
• 2017: Examining the impact of new economic measures on fiscal relations between the union and states in India.

Federalism, Decentralisation

• 1998: Tracing the language problem in India—its historical evolution, current status, and future prospects.
• 2004: Advocating for central government control over water resources.
• 2007: Assessing the effectiveness of the panchayati raj system in India in empowering the people.
• 2007: Examining whether autonomy is the optimal solution to counter balkanization.
• 2011: The establishment of smaller states and its resultant administrative, economic, and developmental implications.
• 2016: Cooperative federalism in India: Myth or reality?
• 2016: Exploring water disputes between states in federal India.

Indian Culture & Society

• 1994: The Indian society standing at a crucial juncture.
• 1996: Emerging cults and spiritual leaders posing a challenge to traditional religion.
• 1998: Examining the mosaic of India’s composite culture.
• 1999: Contemporary youth culture in focus.
• 2000: Navigating the intersection of modernism and our traditional socio-ethical values.
• 2000: Indian culture today—myth or reality?
• 2003: Contemplating the correlation between civilization’s advancement and cultural decline.
• 2010: From traditional Indian philanthropy to the Gates-Buffett model—natural progression or paradigm shift?
• 1997: Exploring the realm of judicial activism.
• 2004: Investigating the intersection of judicial activism and Indian democracy.
• 2005: Advocating for the imperative that justice extends to the impoverished.

Social justice/Poverty

• 1999: Reservation, politics, and the pursuit of empowerment.
• 2005: Envisioning food security as a foundation for sustainable national development.
• 2009: The disproportionate focus of healthcare on the privileged segments of our society.
• 2017: The diminishing capacity of farming to serve as a subsistence source for the majority of Indian farmers.
• 2018: Recognizing poverty anywhere as a menace to prosperity everywhere.

Media & Society

• 1998: The misinterpretation and abuse of freedom in India.
• 1999: Mass media and its impact on cultural invasion.
• 2002: The democratic role and responsibility of the media.
• 2007: Examining the cultural shift in Indian mindsets brought about by satellite television.
• 2008: The contribution of media to fostering good governance.
• 2011: Assessing whether Indian cinema shapes our popular culture or simply mirrors it.
• 2014: Contemplating whether sting operations constitute an invasion of privacy.

Environment/Urbanisation

• 1997: Unraveling the hidden benefits of urbanization.
• 2006: Asserting the crucial role of safeguarding ecology and the environment for sustained economic development.
• 2008: Exploring the perils associated with urbanization.
• 2010: Debating the imposition of a moratorium on new mining activities in tribal areas of the country.
• 2017: Acknowledging the inevitability of succumbing to natural laws despite challenging human laws.

Economic sectors/MNCs

• 1994: Multinational corporations—saviors or underminers.
• 2006: Contemplating the potential demise of small-scale industries in India due to globalization.
• 2007: The surge of BPOs in India.
• 2008: Evaluating the Special Economic Zone—benefit or detriment?
• 2009: Pondering the fate of our traditional handicrafts, destined for a gradual decline.
• 2012: Scrutinizing the criticism that the Public-Private-Partnership (PPP) model is more of a curse than a blessing in the Indian context.
• 2014: Exploring the prospect of tourism as the next major venture for India.
• 1995: Overhauling the structure of the Indian education system.
• 1996: Noting the rapid increase in literacy without corresponding growth in education.
• 2001: Questioning the relevance of traditional classrooms.
• 2002: Examining the privatization of higher education in India.
• 2002: Navigating the intersection of modern technological education and human values.
• 2005: Reflecting on the essence of real education.
• 2006: Investigating the “Education for All” campaign in India—myth or reality.
• 2007: Advocating for the cultivation of independent thinking from early childhood.
• 2008: Contemplating whether educating the masses can pave the way for an egalitarian society.
• 2011: Assessing the status, opportunities, and challenges of the credit-based higher education system.
• 2014: Evaluating the impact of growing competition on the youth.
• 2014: Questioning the effectiveness of standardized tests as a measure of academic ability or progress.
• 2015: Highlighting the limitations of education without values.
• 2017: Acknowledging the pivotal role of classrooms in shaping the destiny of a nation.
• 1995: Unveiling the emerging power of women: the realities on the ground.
• 1997: Asserting that greater political power alone won’t improve the plight of women.
• 1998: Contemplating woman as God’s finest creation.
• 1999: Delving into the challenges and prospects of women’s empowerment.
• 2001: Emphasizing that empowerment alone cannot fully uplift our women.
• 2004: Questioning the trajectory of women’s emancipation.
• 2005: Imagining a world where women rule.
• 2005: Acknowledging the influential role of the hand that rocks the cradle.
• 2006: Advocating for the Women’s Reservation Bill as a catalyst for empowerment in India.
• 2012: Evaluating whether the Indian working woman receives a fair deal in managing work and home.
• 2016: Stating that if development is not engendered, it is endangered.
• 2017: Dispelling the myth of the fulfillment of the ‘new woman’ in India.

Quotes-based/Philosophy

• 1994: Youth is a mistake, manhood a challenge, old age a remorse.
• 1994: A purposeless life is an untimely demise.
• 1995: Disinterested intellectual curiosity is the life force of civilization.
• 1995: When money speaks, the truth remains silent.
• 1995: Our actions define us as much as we shape our actions.
• 1996: Truth is something to be lived, not just taught.
• 1997: True religion cannot be misappropriated.
• 2002: The pursuit of truth is inherently a spiritual challenge.
• 2002: The paths of glory ultimately lead to the grave.
• 2002: If youth possessed knowledge, if age possessed capability.
• 2003: Nothing is inherently good or bad; it is our perceptions that shape it.
• 2013: Be the change you wish to witness in others.
• 2014: With greater power comes greater responsibility.
• 2014: Words have a sharper impact than a two-edged sword.
• 2015: Extending a helping hand is superior to merely giving charity.
• 2018: The past is a permanent dimension of human consciousness and values.
• 2018: Reality may not conform to the ideal, but it affirms it.
• 2007: Attitude shapes habits, habits form character, and character defines a person.
• 2008: Discipline paves the way to success, while anarchy leads to ruin.
• 2015: The character of an institution is a reflection of its leader.
• 2016: Need fosters greed, and an increase in greed tarnishes the lineage.
• 2017: Joy is the purest expression of gratitude.
• 2018: A fulfilling life is one fueled by love and steered by knowledge.
• 2018: A society that prioritizes privileges over principles forfeits both.
• 2018: Traditional morality cannot serve as a guide for modern living.

Globalisation

• 1994: Modernization and Westernization are distinct concepts.
• 1998: Envisioning the world in the twenty-first century.
• 2000: Unraveling the implications of globalization for India.
• 2001: Articulating my vision of an ideal world order.
• 2003: Unmasking the facades of new imperialism.
• 2004: Assessing the impact of globalization on Indian culture.
• 2009: Contemplating the clash between ‘Globalization’ and ‘Nationalism.’
• 2010: Evaluating the readiness of our society for India’s global leadership role.

Science & Tech

• 1997: The contemporary physician and their relationship with patients.
• 1999: Embedding values in science and education.
• 2001: Examining the progress of science and its impact on human values.
• 2003: Exploring the interplay between spirituality and scientific temper.
• 2004: The magnetic appeal of space.
• 2012: Debating the compatibility of Science and Mysticism.
• 2013: Asserting that science and technology serve as the cure-all for the nation’s growth and security.
• 2015: Emphasizing that technology cannot replace human manpower.
• 2018: Advocating for alternative technologies to build a climate change-resilient India.

Internet/IT

• 2000: The allure and challenges of the cyberworld.
• 2006: The rise of computerization and its potential to foster a dehumanized society.
• 2016: Reflecting on the long-term impact of cyberspace and the Internet on human civilization—blessing or curse?
• 2017: Contending that social media, by its nature, is a self-centered medium.

International organisations /relations

• 1996: The restructuring of the UNO as a reflection of current realities.
• 2004: Analyzing India’s contribution to fostering ASEAN cooperation.
• 2006: Assessing the significance of the Indo-US nuclear agreement.
• 2017: Questioning the continued relevance of the Non-Alignment Movement (NAM) in a multipolar world.
• 2005: The impact of terrorism on global peace.
• 2009: Examining whether we are a ‘soft’ state.
• 2009: Asserting the value of well-defined boundaries in fostering good relations between neighbors.
• 2011: Recognizing the importance of both human intelligence and technical intelligence in addressing terrorism in the Indian context.

Miscellaneous

• 1998: India’s impact on global wisdom.
• 2001: The quest for excellence.
• 2010: Geography may be constant, but history is subject to change.
• 2014: Aspiring for fifty gold medals in the Olympics—can India turn this into a reality?
• 2015: Embracing the strategy of swift yet consistent progress.

Topic-Wise Essay Questions from UPSC Mains (1994 -2018) FAQS

Q 1. how can i write a good essay in upsc.

 Essay writing not only checks your ability to understand the topic but also how well you can explain the same. While preparing for any subject, keep making notes. Read editorial articles in newspapers like The Hindu. Listen to analysis of particular topics on Rajya Sabha TV. There is no shortcut to master the essay, it is all about regular practice.

Q 2. Does handwriting matter in UPSC?

If the answer is good and the handwriting is not good, then there is a possibility of being at a state of disadvantage because the person who evaluates your paper will be evaluating thousands of other papers. Hence, to make sure that your evaluator has not missed out on any piece of information that you have written, it is better to have good and legible handwriting.

3.  What is the format of the UPSC Civil Services Mains examination?

The UPSC Civil Services Mains examination includes an Essay paper (Paper I), which is the initial paper in the exam.

4. How many essays are candidates required to write in the Essay paper?

Candidates are required to compose two essays from a selection of provided topics in the Essay paper.

5. How many marks does the Essay paper hold, and how does it contribute to the Final Merit List?

The Essay paper holds a total of 250 marks, and these marks contribute to the determination of the Final Merit List.

6. What is the time duration for the Essay paper in the UPSC Mains examination?

The time duration for the Essay paper is not specified, but candidates are advised to manage their time effectively.

7. Can candidates choose any topic for their essays, or are there specific topics provided?

Candidates must choose two essay topics from a selection of provided topics.

8. How are the essay topics categorized in the provided list?

The essay topics from the last 25 years are categorized into distinct topics such as Administration, Democracy/India since independence, Economic growth and development, Federalism, Decentralisation, Indian Culture & Society, Judiciary, Social justice/Poverty, Media & Society, Environment/Urbanisation, Economic sectors/MNCs, Education, Women, Quotes-based/Philosophy, Character, Globalisation, Science & Tech, Internet/IT, International organisations/relations, Security, and Miscellaneous.

9. What are some examples of essay topics related to Indian Culture & Society?

Examples include “The Indian society standing at a crucial juncture,” “Contemplating the correlation between civilization’s advancement and cultural decline,” and “Navigating the intersection of modernism and our traditional socio-ethical values.”

10. Are there specific essay topics related to Economics and Development?

Yes, essay topics related to Economics and Development include “Managing resources in the Indian context,” “Jobless growth in India: An aberration or a consequence of economic reforms,” and “Exploring the impact of new economic measures on fiscal relations between the union and states in India.”

11. How can candidates prepare for the essay paper effectively?

Candidates can prepare by reviewing and understanding essay topics from previous years, practicing essay writing, and staying updated on current affairs and relevant issues.

12. Are there any specific guidelines for essay writing provided by UPSC?

While specific guidelines are not mentioned, candidates are expected to express their thoughts coherently, provide well-reasoned arguments, and adhere to the given word limit. It is advisable to maintain clarity, conciseness, and a balanced perspective in essay writing.

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Money, Banking & Finance Notes for UPSC Part 1

What is difference between economics and finance?

Finance is study of money, banking and financial instruments. While economics is larger set associated with production, consumption, and distribution of goods and services.

Ishita Kishore UPSC Topper Booklist

Favourite Governor (Rajan)

• Inflation control

Unnecessary facts if you fail in interview

Fiat currency – Issued by order of government or RBI

Legal tender – Valid for all transactions

Cash transaction limit – 2 lakh by Finance act 2017

Stale cheque – Not withdrawn in 3 months

Core Banking System – Centralized digital data management, Finacle (Infosys) & E Kuber (RBI)

RTGS – 2 lakh to 2000 crore (Only by banks)

NEFT – 10 lakh (Only by banks)

IMPS – By banks, prepaid payment instruments , mobile wallet, etc (That is no IFSC code required thus no direct involvement of RBI)

Radio-frequency identification (RFID) uses electromagnetic fields to automatically identify and track tags attached to objects. An RFID tag consists of a tiny radio transponder; a radio receiver and transmitter.

Card tokenization – Masks card number, expiry date , CVV , etc from third party

• Brown label
• White label

M3 is most commonly as used money supply (Currency with public + DD+TD with commercial banks)

Money in the hand of poor & developed countries has higher velocity

CRR – 4%

SLR – 19%

Banks borrows in long term from RBI without pledging collateral

Reverse Repo – Clients lend money to the RBI

Standing Deposit facilities – Bank parks funds in RBI for short term to earn interest

Hawkish policy – Fight inflation

Dovish Policy – Expansionary policy

Mudra – 100% SIDBI subsidiary

Mudra loans are collateral free. If borrowers default losses will be covered by credit guarantee fund for micro units operated by NCGTL (Loan interest is high)

Banks lending rate is linked to the

• 91 days T bill
• 182 days T bill
• Any other bench mark rare decided by Financial benchmark India ltd

CHIT fund – Concurrent list

Sharda chit fund – Ponzi scheme (After 100cr SEBI permission is required)

Definitions

• Teaser loan – Earlier year low interest rate (Higher restrictions)
• Subprime – Borrower does not have ability to pay (Teaser loan to home buyer was reason to subprime crisis)

Over leveraged borrower – Company borrows too much than its ability to pay back

Zombie lending – When a weak bank keeps giving new loans to a subprime overlaveraged borrower

Inverted yield curve

• Reflects a scenario in which short-term debt instruments have higher yields than long-term instruments.

Operation twist

• sells the short term securities and buys long term securities simultaneously through Open Market Operations (OMO).
• Deals with steep bond yield curve
• Reduced long term interest rate

Long term repo operations

• Long term repo operations conducted with current repo rate
• Reduced interest rate on the long term borrowing

Incremental CRR exemption

• On few sectors like Auto, Housing, MSME

Accommodative stance

To increase the money supply in the economy.

Neutral stance

 Neutral stance of RBI provides it the flexibility to move in either of the directions. (Depend on the inflation)

Contractionary stance

Followed by RBI to decrease the overall supply of money in the economy

Cashless Economy (Already lots of digitisation happening)

• Raise awareness about adoption of BHIM
• RBI should prepare index of digital financial inclusion
• 10% digital literacy increase it
• Reduction in black money
• Better tax surveillance
• Difficult to steal if proper care is taken
• Interoperability
• KYC Adhar – Privacy debate
• Issues for rural area Digital literacy
• Internet issues
• Its a decentralize, open ledger technology which maintain a growing list of transaction.
• Each block contains a cryptographic hash of the previous block a timestamp, and transaction data
• In cryptography and computer science, a hash tree or Merkle tree is a tree in which every leaf node is labelled with the cryptographic hash of a data block, and every non-leaf node is labelled with the hash of the labels of its child nodes.
• Once recorded, the data in any given block cannot be altered retroactively without alteration of all subsequent blocks, which requires consensus of the network majority.
• Last year Coffee Board had launched the Coffee Blockchain initiative. Under it, country’s first blockchain-based marketplace app for trading in Indian coffee was launched which aimed at getting growers better returns by removing middlemen
• Yes bank vendor payment

Cryptocurrency

Its digital virtual currency created and stored using blockchain technology. (Bitcoin, Libra by facebook using move programming language, )

Why crypto?

• Anarchist lost faith in fiat money because of subprime crisis due to eroded purchasing power of US dollar (Satoshi Nakamato – 10^8 Satoshi = 1 bitcoin)
• Miner verifies transaction to get bitcoins
• only 21 million bitcoins can be mined 
• Mining – Thermal electricity wastage
• Difficult to trace by law enforcement agencies
• Terror finance
• Ineffectiveness of monetary policy
• Quantum computing can solve blocks very easily thus will crash the value of bitcoins
• 2018 budget it is not a legal tender
• If private key lost then bitcoin loss (SHA256 has function)
• Cryptojacking

Challenges using blockchain

• ‘immutable’ nature necessitates very valid data
• Reduced need of intermediaries thus there is need of change in legal framework

Other use of blockchain (NITI Ayog)

• Land Records: Creating a new system to manage land record transfer and ownership
• Payment between banks can be settled using block chains
• Pharmaceutical drugs supply chain
• Bond market (Commercial paper by yes bank)

Co operative bank

Problems with co operatives

• Politicization
• Demonetisation
• Money laundering
• Poor recovery of loan

PMC bank crisis

• Bank is facing regulatory actions and investigation over alleged irregularities in certain loan accounts. Loans given to financially stressed real estate player Housing Development & Infrastructure (HDIL) are at the centre of the investigation.
• HDIL promoters allegedly colluded with the bank management to draw loans from the bank’s Bhandup branch. The bank officials did not classify these loans as non-performing advances, despite non-payment.
• The bank also allegedly created fictitious accounts of companies which borrowed small sums of money, and created fake reports to hide from regulatory supervision.

Steps taken

• regulatory actions and investigation by RBI
• Union proposed amendment in BRA to bring multi-state cooperative banks under the watch of the central bank
• Proposed law seeks to enforce banking regulation guidelines of the RBI in cooperative banks, while administrative issues will still be guided by Registrar of Cooperatives
• Cooperative banks would be audited according to RBI rules and appointment of CEOs would require prior approval from the central bank. The RBI will also have the right to supersede the management of a cooperative bank in case of governance failure

Subprime Crisis

• Boom in the mortgage backed securities
• Housing bubble burst around 2006
• The subprime mortgage crisis was the collective creation of the world’s central banks, homeowners, lenders, credit rating agencies, underwriters, and investors. 
• Open market operations by FED to ensure the liquidities of banks
• Economic stimulus – Income tax rebate
• NPA – If loan principle or interest is not paid for more than 90 days from due date
• Net NPA is simply the total bad assets (actual) minus the provision left aside.
• NPA ratio declining to 9.1 percent in FY19 from 11.2 percent in FY18
• Gross NPAs of public sector banks improved to 11.6 per cent in FY19 from 14.6 per cent in FY18
• During the same period, private sector banks’ gross NPA deteriorated to 5.3 per cent from 4.7 per cent (Because of LIC)
• Loan write off – Written off asset from bank balance sheet. It is just done for the tax benefit purpose and bank has not waived off write to recover loan.
• Restructuring loans – principle, interest rate, tenure of loan is modified
• Stressed asset = NPA + Loans written off + Restructured loans
• Evergreening of loans – Borrower take loan to pay off his old loan  

Why NPA are higher in PSB

• vulnerability to political pressures to lend to certain segments of the economy
• Recovery – Again political pressure
• Fear of loosing job by employee the private banks thus most loans are provided with care
• No CVC/CBI/CAG control thus loan restructuring is easy process
• Before 2005 boom in global economy. Indian corporates took large amount of loan and overleveraged
• 2007 – Subprime crisis . Indian export declined
• 2008-2013 – Policy paralysis and environmental activism stalled projects
• Balance sheet of borrowers became weak – Led to the Twin balance sheet problem

Strategy to fight NPA

• Rectification – No change in tenure, interest just ask client to rectify his irregularities
• Restructuring – Ease tenure, interest rate (Corporate debt restructuring is under IBC). In strategic debt restructuring bank’s debt is converted to the equity
• Recovery – Auction, liquidation
• recapitalisation
• Enacted in 2002
• Bank and HFC can attach the mortgaged asset when loan is not repaid
• Can change board of director, can auction such assets, can also sell sucha sset to ARC
• Not applicable on farm loan
• Debt Recovery tribunal
• NCLT – For companies
• Rs 1 lakh threshold
• DRT – Individual and partnerships
• IBC is not applicable to – Wilful defaulter, Incapable defaulter (These two under SARFAESI)
• Separation of commercial and judicial aspect 
• Insolvency professional will be registered with insolvency professional agency (like CA insti)
• Insolvency and bankruptcy board – Will regulate IP and IPA 
• Initiation (Financial creditor, operational creditor, employees or company itself) -> Appointment of IP (180 – 270 days) -> Committee of financial creditors take decision -> Liquidation
• Preferences : Insolvency cost > workers salary (upto 24 months) > secured creditor > unsecure creditor > dues to government > priority shareholder > equity shareholders
• Banks are not included
• IBC has section related to cross border insolvency but it is not notified yet
• Due to fear of losing control of Company corporate governance and financial discipline increased
• 50k crore NPA updated to standard asset
• 1.70 lakh crore settled through I&B
• Promoters of small companies are exempted from disqualification criteria under Section 29A
• Improve infra and man power to fasten resolution process
• 1322 cases have been admitted by National Company Law Tribunal (NCLT). 4452 cases have been disposed at pre-admission stage.  
•   Strategic Debt Restructuring (SDR) is an attempt to revive stalled projects by giving equity participation to banks in such projects. (Similar is S4A both are withdrew)  
• Small size – Bank itself
• Mid size – Inter creditor agreement
• Large size – AMC
• Deosthalee committee recommendation – Public credit registry to give 360 degree of borrower to lender
• Legal entity identifier number – RBI order big companies to obtain it
• 100 cr and above for schedule crime and fled India
• Special court under PMLA
• Appeal only in HC or SC
• DICGCI as Resolution corporation
• RC drafts resolution plan for banks
• In case no resolution plan like merger, etc happened then Bail in provision using depositors money
• Bad Bank (PARA) – PARA Buys bad loan from banks
• Putting restriction on lending and beanch expansion
• Restricting bank’s directors salaries and dividend distribution
• Pillar 1  – Minimum capital and liquidity requirement 
• credit risk  – Some of the borrower may not repay loan or interest 
• Market risk  – fluctuation in value of investment 
• Operational risk  – Fraud
• Capital adequacy ratio or Capital to risk assets ratio  –  (T1 + T2) / Risk weighted asset;  RBI mandated 9% [Government debt is allowed 9% risk weighting hence subtracted from total asset ]
• limit on leverage ratio ( is the proportion of debts that a bank has compared to its equity/capital ) [3%]
• Liquidity ratio  –  ability to pay off current debt obligations without raising external capital.
• Pillar 2  – Supervisory review process
• Pillar 3  – Risk disclosure and market discipline 
• Common equity  is the amount that all  common  shareholders have invested in a company.
• Capital conservation buffer to hold above CAR in the form of common equity  (2.5%)
• If bank don’t have enough capital to comply with BASEL III norms then it can issue debt bond and equities to gather capital
• Investor may not buy such bonds from weak banks thus there is bond recapitalisation
• Bank lend money to the government and then with that money government buys equity
• Bank board bureau – For appointment of the top officials of public sector financial company
• Customer responsiveness
• Reduce NPA & prevent frauds
• Improve quality of human resource through performance linked promotion, training

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Money Laundering and its Prevention

Last updated on December 23, 2022 by ClearIAS Team

Money Laundering is a heinous crime that not only affects the social and economic fabric of the country but also tends to promote other serious offenses like terrorism and drug trafficking etc.

It is a growing problem that needs to be addressed and the Prevention of Money Laundering Act was enacted in response to India’s global commitment to combat the menace of money laundering.

Table of Contents

What is Money laundering?

Money laundering is the process of making large amounts of money generated by criminal activity – such as drug trafficking, terrorist funding, corruption, etc – appear to have come from a legitimate source.

The basic money laundering process has three steps:

• Placement: At this point, the launderer deposits the dirty money into a legitimate financial institution. This is frequently in the form of cash as bank deposits. This is the most dangerous stage of the laundering process because large amounts of cash are visible, and banks must report high-value transactions.
• Layering: This entails sending money through various financial transactions in order to alter its form and make it difficult to track. Layering can include several bank-to-bank transfers, wire transfers between different accounts in different names in different countries, making deposits and withdrawals to constantly vary the amount of money in the accounts, changing the currency of the money, and purchasing high-value items (boats, houses, cars, diamonds) to change the form of the money. This is the most complicated step in any laundering scheme, and it all revolves around making the original dirty money as difficult to trace as possible.
• Integration: At the integration stage, the money appears to come from a legal transaction and re-enters the mainstream economy. A final bank transfer into the account of a local business in which the launderer is “investing” in exchange for a cut of the profits, the sale of a yacht purchased during the layering stage, or the purchase of a $10 million screwdriver from a company owned by the launderer are all examples of this. The criminal can now use the money without being caught. If there is no documentation from the previous stages, catching a launderer during the integration stage is extremely difficult.

Some of the common methods of money laundering are:

• Smurfing: This method involves dividing large sums of money into smaller, less suspicious amounts. The money is then deposited into one or more bank accounts over time by multiple people (smurfs) or by a single person.
• Overseas banks: Money launderers frequently transfer funds through various “offshore accounts” in countries with bank secrecy laws. Hundreds of bank transfers to and from offshore banks can be involved in a complex scheme. The Bahamas, Bahrain, the Cayman Islands, Hong Kong, Panama, and Singapore are among the “major offshore centers,” according to the International Monetary Fund.
• Shell companies: These are fake companies that exist solely to launder money. They accept dirty money as “payment” for ostensible goods or services but provide none; they simply create the appearance of legitimate transactions through forged invoices and balance sheets.
• Investing in legitimate businesses: Launderers will sometimes wash dirty money in otherwise legitimate businesses. They may use large businesses, such as brokerage firms, where the dirty money blends in easily, or they may use small, cash-intensive businesses, such as bars, car washes, strip clubs, or check-cashing stores. These companies could be “front companies” that provide a good or service but their true purpose is to clean the launderer’s money. This method typically works in one of two ways: the launderer can combine his dirty money with the company’s clean revenues, in which case the company reports higher revenues from its legitimate business than it actually earns; or the launderer can simply hide his dirty money in the company’s legitimate bank accounts in the hopes that authorities will not compare the bank balance to the company’s financial statements.
• Hawala: A different or parallel remittance system is hawala. It exists and functions independently from or concurrently with “traditional” banking or financial channels. The majority of money-laundering schemes use a combination of these techniques. This crime is challenging to eradicate due to the variety of tools available to money launderers.

Measures for prevention of Money laundering

There are various statutory frameworks to prevent money laundering such as PMLA, SAFEMA, NDPSA, FEMA, COFEPOSA etc. Everything will be discussed below.

Statutory framework

Before the Prevention of Money Laundering Act of 2002 (PMLA) was passed in India, the main statutes that included measures to address the issue of money laundering were:

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• The Income Tax Act, 1961
• The Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA)
• The Smugglers and Foreign Exchange Manipulators Act, 1976 (SAFEMA)
• The Narcotic Drugs and Psychotropic Substances Act, 1985 (NDPSA)
• The Benami Transactions (Prohibition) Act, 1988
• The Prevention of Illicit Traffic in Narcotic Drugs and Psychotropic Substances Act, 1988
• The Foreign Exchange Management Act, 2000, (FEMA)

Prevention of Money Laundering Act (PMLA) 2002

The Prevention of Money Laundering Bill was introduced in 1998 and passed in 2002 in response to the urgent need for the adoption of comprehensive legislation for the prevention of money laundering and related activities, confiscation of proceeds of crime, the establishment of agencies and mechanisms for coordinating measures for combating money laundering, etc. Taking effect on July 1st, 2005, the Act was put into law.

The objective of the Act

• To prevent money laundering.
• To provide for confiscation of property derived from, or involved in, money laundering.
• For matters connected therewith or incidental thereto.
• It forms the core of the legal framework put in place by India to combat money laundering.

Its salient features include:

• Defines Money laundering.
• Expanded the reach of the Act by adding many more crimes under various legislations: It lists specific offenses that would fall under this Act’s purview under the IPC, the Narcotic Drugs and Psychotropic Substances Act , the Arms Act, the Wild Life (Protection) Act, the Immoral Traffic (Prevention) Act, and the Prevention of Corruption Act.
• In instances of cross-border money laundering, it enables the Central Government to implement the UN Convention against Corruption’s provisions by returning the confiscated property to the requesting nation.
• It aims to include certain financial institutions in the Act’s reporting requirements, including Full Fledged Money Changers, Money Transfer Services, and Master Card.

Enforcement apparatus

• Adjudicating Authority: The Act gives the Central Government the authority to establish an adjudicating authority with a chairman and two other members and to specify the authority’s mandate and other terms of service. The Authority has been given independent authority to control its adjudicating process.
• Administrator: The property laundered will be taken care of i.e. managed after confiscation by an Administrator who will act in accordance with the instructions of the Central Government.
• Appellate Tribunal: An Appellate Tribunal established by the Central Government will hear all appeals from decisions made by the Adjudicating Authority. It will have two members, and the chairman will be in charge.
• Special Courts: An Appellate Tribunal established by the Central Government will hear all appeals from decisions made by the Adjudicating Authority. It will have two members, and the chairman will be in charge.
• Banking companies, financial institutions, and intermediaries are required by the PMLA and the rules thereunder to confirm the identity of their clients, keep records, and provide information to FIU-IND.

Institutional framework

• Enforcement Directorate: Investigation and prosecution of cases under the PMLA have been entrusted to Enforcement Directorate.
• Financial Intelligence Unit – India (FIU-IND): established in 2004 to serve as the primary national organization in charge of gathering, analyzing, and disseminating data about improbable financial transactions. As part of its mission to further the international fight against money laundering and related crimes, FIU-IND is also in charge of coordinating and bolstering the efforts of national and international intelligence, investigation, and enforcement agencies.

International Cooperation

• The Financial Action Task Force (FATF): The G7 summit in Paris in 1989 led to the creation of the FATF, an intergovernmental organization. The Financial Action Task Force (FATF) is a “policy-making body” that works to create the political will needed to bring about national legislative and regulatory reforms in order to combat money laundering, terrorist financing, and other related threats to the integrity of the global financial system.
• The Asia/Pacific Group on Money Laundering (APG) was a self-contained regional anti-money laundering organization. The APG’s mission is to facilitate the adoption, implementation, and enforcement of internationally accepted anti-money laundering and anti-terrorist financing standards outlined in the Financial Action Task Force’s recommendations (FATF).
• The Vienna Convention/ United Nations Convention against Illicit Trafficking in Drugs and Psychotropic Substances: In December 1988, it was the first major initiative in the prevention of money laundering. By requiring member states to criminalize the laundering of money from drug trafficking, this convention laid the groundwork for efforts to combat money laundering.
• The Council of Europe Convention: In 1990, this convention established a common policy on money laundering. It establishes a common definition of money laundering as well as common measures to combat it.
• Basel Committee Minimum standards: The Basel Committee on Banking Regulations and Supervisory Practices is made up of representatives from the central banks and supervisory authorities of eleven major industrialized nations as well as Luxembourg. In 1998, the committee issued a statement of principles aimed at combating money laundering.

Effects of Money Laundering

• Socio-cultural effects: Money laundering success encourages criminals to continue their illegal schemes—more fraud, more drugs on the streets, more drug-related crime, and so on.
• Terrorism: Money laundering is a major source of terrorism financing. Terrorists have demonstrated adaptability and opportunism in meeting their funding needs.
• Organized crime can infiltrate financial institutions, acquire control of large sectors of the economy through investment, or offer bribes to public officials and indeed governments.
• Economic effects
• It’s estimated that money launderers scrub as much as $2 trillion (or 5 per cent of the world’s GDP) every year.
• Massive influxes of dirty cash into particular areas of the economy that are desirable to money launderers create false demand.
• Legitimate small businesses cannot compete with money-laundering front companies that can afford to sell a product at a lower price because their primary goal is to clean money rather than make a profit.

Challenges in the prevention of Money laundering

• Increased use of digital currency: The rise of cryptocurrency allows money launderers to conceal their illicit funds. Estimates suggest that criminals have used the hyper-connected cryptocurrency ecosystem to launder more than $2.5 billion in dirty Bitcoin since 2009.
• Preference for cash over digital payments for transactions: The use of cash will ease the process of “layering”.
• Lack of awareness about the seriousness of crimes of money laundering: Instead of going through lengthy paperwork transactions in banks, the poor and illiterate prefer the Hawala system, which has fewer formalities, little or no documentation, lower rates, and anonymity.
• Lenience from banks : Increasing competition in the financial market is forcing banks to lower their guards, allowing money launderers to use it illicitly in furtherance of their crime.
• Collusion by employees of financial institutions : Financial institutions are supposed to check the source of funds, monitor account activity, and track irregular transactions, but the involvement of financial institution employees makes laundering easier.
• Lack of comprehensive enforcement agencies: Money laundering is no longer limited to a single area of operation, but has broadened to include many different areas of operation. In India, there are separate wings of law enforcement dealing with money laundering, terrorist crimes, economic offenses, and so on, and they lack coordination.
• The widespread act of smuggling: There are a number of black market channels in India for the purpose of selling goods, with many imported consumers buying goods such as food, electronics, and so on. Black merchants conduct cash transactions and avoid customs duties, allowing them to offer lower prices than regular merchants.
• Tax Heaven Countries: Strict financial secrecy laws by tax heaven countries incentivize the creation of anonymous accounts in these countries by launderers.

Way forward

• Measures are needed to address the risk of cryptocurrency in money laundering.
• Tax heavens need to build a balance between financial confidentiality and this confidentiality turning to a money-laundering haven.
• Sensitize the masses about the ill effects of laundering.
• Prior to the launch of new products, business practices, or the use of new or developing technologies, financial institutions should conduct a risk assessment.
• Implement FATF Recommendations which sets out a comprehensive and consistent framework. Some of them are:
• Identify the risks; develop policies and domestic coordination to mitigate money laundering and terrorist financing risks.
• Money laundering should be criminalized in accordance with the Vienna Convention and the Palermo Convention, which ensure that financial institution secrecy laws do not impede the implementation of the FATF Recommendations.
• Apply the crime of money laundering to all serious offenses, with a view to including the widest range of predicate offenses.
• Implement targeted financial sanctions regimes to comply with UN Security Council resolutions on the prevention, suppression, and financing of terrorism.
• Examine the sufficiency of laws and regulations governing non-profit organizations, which the country has identified as vulnerable to terrorist financing abuse.
• Apply preventive measures for the financial sector and other designated sectors.
• Financial institutions should be required to keep all necessary records on domestic and international transactions for at least five years in order to respond quickly to information requests from competent authorities.
• Establish authorities’ powers and responsibilities (e.g., investigative, law enforcement, and supervisory authorities), as well as other institutional measures.
• Countries should have anti-money laundering policies and should designate an authority that is responsible for such policies.
• Provide mutual legal assistance in the case of money laundering and effectively carry out extradition requests in the case of money laundering and terrorist financing.

The threat posed by this scheme necessitates advanced laws to prevent it from occurring, such as the use of AI and large intelligence databases at the government level.

This is not a threat that is limited to national borders but affects the entire world, so both national and international stakeholders must work together to tackle it.

Article Written by: Remya

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Essay on Money for Students and Children

February 5, 2022 by Sandeep

Money was invented as early as 5000 BC in Europe. Previously, the barter system was used to exchange goods and services for products. Money helps us buy things and commodities and earns respect and dignity in social life. Money as a factor gives financial stability and creates great opportunities for humankind. Below we have provided an essay on money for class 4, 5, 6, 7, 8, 9 and 10. This composition is helpful for school students who are willing to participate in the essay writing competition.

Essay on Money

Money is an essential commodity for survival, used to buy goods and services. It is in the physical form of coins, notes, and cheques. A barter system was introduced to exchange goods and services during ancient times. For instance, a tool was exchanged for clothes or food items. It seemed pretty straightforward, but the trade was supposed to fulfil both the parties’ needs, or it would not occur.

Then in 600 B.C, the coins were minted and used as the official currencies of many countries. The pioneers who invented coins were from the kingdom of Lydia in Turkey. These coins were made of metals like gold, silver, bronze, etc. The kings and queens stamped pictures of themselves or their gods and goddesses, which acted as the denominations and identity to the kingdom.

Greeks made more significant coins and believed that coins had magical powers. Romans stamped their emperor’s picture to make him famous. The Tang Dynasty invented paper money in China during the 7th century. Paper money was lightweight, foldable, and portable because bigger pictures, denominations, and names were printed easily.

Impact of Money on Human Life

Everybody dreams of becoming rich in terms of financial status and improving their living standards. It affects our behaviour to a larger extent and alters our time and effort. Any work or task which guarantees money is always done faster and in a better way. Money cripples our values like empathy and compassion. We tend to become more and more materialistic.

Ego and attitude take over, and an individual starts displaying harsh and aggressive behaviour. This hurts others by making disparaging comments about an individual’s personality or financial stature. Researchers have found that children and adults who belong to affluent backgrounds fall prey to drug addiction due to heavy pressure and negligence from parents. They are vulnerable and weak because of the lack of guidance and support, and no one is present to correct them.

Love and care are absent, but money is available abundantly. So these children bully other kids into venting out their frustration and jealousy and end up being brats who lack moral ethics. Academically they perform poorly, and their grades drop eventually, thus paralysing their self-esteem and morale. Earning money and maintaining status becomes compulsive. This involves people addicted to gambling, eating, and shopping for luxurious and high-end brands.