Mains Practice Questions for the Day
- Q. Rural credit is a key pillar of inclusive growth in India. Discuss the role of institutional reforms, policy measures and digital platforms in strengthening rural credit delivery.
- Q. “One Nation, One Election” has been justified on grounds of administrative efficiency and economic savings. Critically examine the constitutional and federal challenges associated with its implementation.
Q. Rural credit is a key pillar of inclusive growth in India. Discuss the role of institutional reforms, policy measures and digital platforms in strengthening rural credit delivery.
(GS Paper III – Agriculture / Inclusive Growth / Banking)
Introduction:
Rural credit plays a crucial role in supporting agriculture, allied activities, rural enterprises and household consumption needs. India’s rural credit system has gradually evolved from informal lending to a diversified institutional framework driven by NABARD, Scheduled Commercial Banks, Regional Rural Banks, Cooperative Banks and Small Finance Banks. Recent data reflects this shift: 51% of rural households rely exclusively on formal credit sources, while over 27% use both institutional and non-institutional channels.
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Institutional Reforms Strengthening Rural Credit
- NABARD as apex institution:
NABARD strengthens rural finance through refinance support, rural infrastructure financing, institutional development and supervision of Cooperative Banks and RRBs. - Expansion of banking network:
Rural branches of Scheduled Commercial Banks increased from 41,464 in 2014 to 56,193 by July 2025, improving access to formal banking. - RRBs and Cooperative Banks:
28 RRBs with over 22,000 branches in 700 districts focus on small farmers, agricultural labourers, artisans and rural entrepreneurs. Cooperative institutions such as PACS, StCBs and DCCBs provide last-mile credit. - Small Finance Banks:
11 SFBs support unserved and underserved groups through low-cost, technology-driven credit delivery.
Policy Measures
- Priority Sector Lending:
Banks must earmark 18% of eligible credit for agriculture, with sub-targets of 14% for non-corporate farmers and 10% for small and marginal farmers. - Ground Level Credit:
The GLC target for FY 2025–26 is ₹32.50 lakh crore, including ₹5 lakh crore for animal husbandry, dairying and fisheries. - Modified Interest Subvention Scheme:
Under MISS, short-term loans through KCC are available at 7% interest, reduced to 4% for prompt repayment. - SHG-Bank Linkage and DAY-NRLM:
Over 10.05 crore rural women have been mobilised into more than 90.90 lakh SHGs, improving women-led financial inclusion.
Digital Platforms and Financial Inclusion
PMJDY has opened over 58.63 crore accounts, with 77.8% in rural and semi-urban areas. Platforms such as Jan Samarth Portal, e-KCC, and Jan Dhan Darshak App have made credit access more transparent, faster and technology-enabled. The e-KCC portal enables loan processing in about two days.
Challenges
- Dependence on informal credit still persists.
- Small and marginal farmers need easier and timely access.
- Financial literacy remains uneven.
- PACS digitisation and allied-sector credit require further strengthening.
Conclusion:
Rural credit is central to inclusive rural development, agricultural growth and livelihood resilience. By combining institutional expansion, targeted policies and digital platforms, India can make rural finance more affordable, accessible and efficient, thereby strengthening the foundation of inclusive growth.
Q. “One Nation, One Election” has been justified on grounds of administrative efficiency and economic savings. Critically examine the constitutional and federal challenges associated with its implementation.
( GS Paper II – Constitution, Federalism, Elections)
Introduction:
One Nation, One Election (ONOE) refers to the proposal to synchronise elections to the Lok Sabha and State Legislative Assemblies within a common electoral cycle. The Constitution (129th Amendment) Bill, 2024 seeks to institutionalise ONOE through a new Article 82A and amendments to Articles 83 and 172. The proposal is justified on grounds of reducing election expenditure, minimising Model Code of Conduct (MCC) disruptions, optimising administrative manpower and ensuring governance continuity.
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Arguments in Favour
- Administrative efficiency: Frequent elections require repeated deployment of civil servants, teachers, police and CAPF, affecting routine governance.
- Reduced MCC disruption: A single election cycle may reduce repeated policy freezes caused by MCC.
- Cost savings: Simultaneous elections may reduce duplication in election logistics, security movement and polling arrangements.
- Voter convenience: A common election window may reduce voter fatigue and help migrant workers participate more easily.
Constitutional Challenges
- Basic Structure concerns: In Kesavananda Bharati, the Supreme Court held that parliamentary democracy and free and fair elections are part of the Constitution’s basic structure. Any reform weakening democratic accountability may face scrutiny.
- Collective responsibility: India’s parliamentary system requires the executive to enjoy legislative confidence. Fixed election cycles may create problems if a government loses majority mid-term.
- Constructive no-confidence motion: The proposed German-style model may distort India’s parliamentary convention by allowing weak governments to remain in office unless an alternative majority is shown.
- Extension or curtailment of terms: Synchronisation may require shortening or extending Assembly terms, affecting the democratic mandate of voters under Articles 83 and 172.
Federal Challenges
- Impact on regional parties: Simultaneous elections may create a “wave effect”, where national issues dominate State elections, weakening regional parties and local concerns.
- State autonomy: Aligning State Assembly terms with the Lok Sabha may reduce the independent constitutional identity of States.
- Local body issue: Panchayat and municipal elections are protected under the 73rd and 74th Amendments and conducted by State Election Commissions. Including them may affect decentralisation, while excluding them weakens the claim of full savings.
Practical Concerns
ONOE also requires large-scale EVM/VVPAT capacity, security deployment and electoral roll coordination. It may concentrate MCC restrictions nationally instead of eliminating governance disruption.
Conclusion:
ONOE may improve administrative efficiency, but its implementation must not weaken federalism, parliamentary accountability and free elections. A durable reform requires broad political consensus, constitutional safeguards and parallel reforms in campaign finance, criminalisation of politics and Election Commission autonomy.
