UPSC CARE Mains Practice 29th December 2025
Mains Practice Questions for the Day
- In the light of the Supreme Court’s 2024 verdict striking down the Electoral Bonds Scheme, examine the role and limitations of electoral trusts in ensuring transparency and fairness in political funding in India. (GS Paper – 2; Governance: Electoral reforms)
- How does the India–New Zealand Free Trade Agreement reflect India’s new-generation trade strategy, and what are its key economic and strategic implications?
In the light of the Supreme Court’s 2024 verdict striking down the Electoral Bonds Scheme, examine the role and limitations of electoral trusts in ensuring transparency and fairness in political funding in India. (GS Paper – 2; Governance: Electoral reforms)
(GS Paper 3 – Indian Economy)
Introduction:
Free and fair elections are a cornerstone of India’s constitutional democracy. Political funding plays a decisive role in shaping electoral competition. The Supreme Court’s February 2024 verdict striking down the Electoral Bonds Scheme marked a turning point by prioritising transparency and citizens’ right to information. In the post-verdict phase, electoral trusts have re-emerged as the primary channel for corporate political donations.
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Post-Electoral Bonds Shift and Role of Electoral Trusts
Electoral trusts, governed by the Electoral Trusts Scheme, 2013, are non-profit entities regulated by the Election Commission of India (ECI). They receive voluntary contributions from individuals and corporate entities and redistribute them to registered political parties. Unlike electoral bonds, trusts mandate disclosure of donor identities, amounts contributed and fund distribution, thereby offering greater legal clarity and traceability.
Transparency Gains and Persisting Concerns
While electoral trusts improve transparency compared to anonymous bonds, serious limitations remain. Data shows a high concentration of funds flowing through a few trusts and disproportionately benefiting the ruling party. Crucially, although donor names and recipient parties are disclosed, the donor–donee mapping is not made public. This opacity sustains concerns of quid pro quo, which the Supreme Court described as “institutionalised corruption” in the electoral bonds judgment.
Democratic Implications
Unequal access to corporate funding distorts electoral competition, weakens the level playing field and marginalises smaller parties. The absence of expenditure caps on political parties further exacerbates the money–politics nexus, making Indian elections among the costliest globally.
Way Forward
Strengthening electoral finance reform requires enhanced disclosure norms, stronger ECI oversight, caps on party expenditure and calibrated public funding of elections. Political parties must also be brought under greater transparency frameworks.
Conclusion:
Electoral trusts represent a partial improvement over opaque funding mechanisms but fall short of ensuring democratic fairness. Comprehensive political finance reform is essential to restore public trust and uphold the constitutional promise of free and fair elections.
How does the India–New Zealand Free Trade Agreement reflect India’s new-generation trade strategy, and what are its key economic and strategic implications?
(GS Paper II – International Relations, Trade Diplomacy;GS Paper III – External Trade, Investment, MSMEs, Employment)
Introduction:
India’s trade policy has undergone a shift from conventional tariff-centric agreements to new-generation Free Trade Agreements (FTAs) that integrate goods, services, investment, and mobility. The India–New Zealand Free Trade Agreement (2025) exemplifies this transition by combining market access with strategic safeguards and long-term cooperation.
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Reflection of India’s New-Generation Trade Strategy
First, the agreement adopts a balanced liberalisation approach. While New Zealand grants zero-duty access to 100% of Indian exports, India selectively opens its market, protecting sensitive sectors such as dairy and agriculture. This reflects India’s emphasis on safeguarding livelihoods while pursuing export competitiveness.
Second, the FTA goes beyond goods to focus strongly on services, skill mobility, and investment. Commitments across over 100 services sectors, provisions for student mobility and skilled professionals, and a dedicated annex on AYUSH and traditional medicine services underline India’s push to leverage its comparative advantage in services and human capital.
Third, the agreement emphasises investment-led growth, with New Zealand committing USD 20 billion in FDI over 15 years, supported by clear safeguards and regulatory cooperation. This aligns with India’s objective of attracting long-term, quality investment rather than short-term trade gains.
Key Economic and Strategic Implications
Economically, the FTA boosts labour-intensive sectors such as textiles, leather, gems and jewellery, engineering goods, and processed foods, strengthening MSMEs and employment. It also improves India’s integration into global value chains and expands access to high-income markets in Oceania.
Strategically, the agreement aids trade diversification, reducing India’s dependence on traditional partners like the U.S. and the EU. It enhances India’s footprint in the Pacific region, strengthens people-to-people ties through diaspora and mobility provisions, and reinforces India’s image as a reliable and pragmatic trade partner.
Conclusion:
Overall, the India–New Zealand FTA reflects India’s new-generation trade strategy that balances openness with protection, prioritises services and investment, and uses trade agreements as tools of economic resilience and strategic diplomacy rather than mere tariff reduction.
