 Come in. What happened sir? You are Yashrat Sekhar. Please tell something, introduce yourself. My name is Yashrat Sekhar. I was born in Lucknow. I completed my class 12th from Lamartin Air College in Lucknow. From then I completed my graduation in Economics Honours from St. Stephen's College in 2018. Since then I have been preparing for UPSC. This is your first attempt? Third attempt. In other attempts you went up to what level? In the second attempt I went to the interview level. This is my third attempt. First attempt I couldn't clear up limbs. As you are from St. Stephen's College. This is one of the leading colleges. And it is 8th rank by NIRF. Tell me, when was it established and how it came? It was established on 1st of February 1881. The reason was that it was established by the Cambridge Mission to Delhi. Which had come to establish it because a government college had existed before. And a school by the name of St. Stephen's also existed before. The revolt of 1857. It was closed after 1857. And the government had brought out a policy to promote English education in India. So to pursue those efforts, the Cambridge Mission under Mr. Olnath. He ended up becoming the first principal of a college. The school was established. One question I will transfer this thing to you. What is capability theory of poverty by Amartya Singh? You are from economics. Capability theory basically assumes the fact that our economic growth. And a person's economic growth. One poverty. Is a person's economic growth and development. And why he does not end up becoming poor depends on his capability. Which is the result of his functionings. And those functionings are calculated in terms of how well he has been served. In terms of health education and other basic necessities of life. So basically if one of these functioning let's say in terms of not having access to proper education. Does not function well. He ends up becoming incapable to work himself out of poverty. He told that poverty cannot be decided on income or consumption. But it has to be seen whether he is capable to have other necessary things. Yeshra, I pronounced it correctly. So you are an economics graduate. Do you know what is Pareto efficiency? Yes ma'am. Pareto efficiency is a situation where nobody else can be made better off without making somebody else worse off. May I explain with the help of an example? Please go ahead. Ma'am let's say the economy has let's say 100 rupees and you need 1 rupee to make 1 gram of butter and you need 1 rupee to make 1 gun. So now the economy let's say is producing 50 grams of butter and 50 guns. So all the resources of the economy are productively employed. Now let's say a war broke out. In that situation to produce one more gun you need to take out resources away from the butter. So the people who are having access to butter their welfare will reduce and people who need guns their welfare will increase. So this is a classic situation of Pareto efficiency that to make somebody like people who wants more guns better off, we need to reduce the welfare of the people who are consuming butter less well off. Can you help me understand the problem of moral hazard with the aid of a current policy, any policy of your choice of the Indian government? My moral hazard is an economic, is an economic externality that is a result of the fact that when costs are not calculated, it may lead to people who are exercising those benefits to think that there are no wrong things out of it. For example, the government usually goes for farm waivers. Now this incentivizes even farmers who has the capacity to repay loans, to not repay loans, to find ignorance about the fact that the government has brought out a farm loan waiver policy. So this is a moral hazard. That's why for the next time even the banks who want to give loan to the reasonable farmers, they would shy away from giving away loans because they think that they will not return. And even the farmers who are capable of returning loans, they will not want to return the loans because they will think that they can get away with it. One of the primary reasons of the subprime crisis could be attributed also to the failure of the efficient market for them. Having said that, I would want your thoughts on how can information asymmetry cause problems in terms of stock trading in the Indian market? My information asymmetry is a scenario where all the market players do not have access to the same information or equally to the same information. So let's say if I were a broker or if I were in some cohoots with somebody who is running let's say National Stock Exchange and they were to give me some information about some stock or some classified information about a company and I were to buy that company because that news was to be released tomorrow, then suddenly the price of the stock, I would purchase the stock price today at a cheap rate and tomorrow when that news is released, let's say the company is seeing investment by Apple or the company is seeing investment by Google, its market price will go up and then I will be able to sell those stocks at a higher price making a benefit. And this is the same thing that happened with the co-location case of National Stock Exchange where Chitra Supermanium and some of our stock was involved in reducing access by 0.02 second of information to all the market players. Some were benefited and some were not. Can you connect this with the efficient market theory? What does efficient market theory say? Ma'am, I would not be able to. Okay. I want to know from you what is the current policy with respect to the inflation targeting regime in India and how does it work? Ma'am, there has been a lot of discussion over what the role of RBI should be. Eventually in 2016 the government and the RBI came to an agreement that the role of the RBI should be primarily to regulate inflation with the objective of growth also. So now RBI has set a target of 4 plus minus 2% of inflation targeting and for that purpose they have to take steps that inflation does not go beyond that. If inflation go beyond the target let's say it goes less than 2% or it goes above 6% for 3 consecutive quarters then RBI can be held responsible and they will have to report to the government and the immediate steps may follow. So basically the purpose is to rein in inflation because we saw double digit inflation in early 2010 and 11 so that brought about a consciousness in the government and this was also legislated also so this has become the primary responsibility of RBI. My last question to you, what do you understand by monetization of deficit? Ma'am, monetization of deficit means printing money. Basically monetization of deficit can be done through two ways. It can be direct monetization, it can be indirect monetization. Direct monetization is the printing of money by the RBI to supply the funds to the government to bridge the deficit that has been created because of discrepancies between expenditure and the earnings. Indirect deficit is what usually happens when the government issues treasury bills or long term government dated securities. It is a problem that direct monetization of debt has often led to runaway inflation. We have seen this in case of many countries like in the early 1990s after the liberalization we saw a brief period of high inflation which was primarily attributed to the RBI was directly monetizing the government debt. Now this has been stopped by the FRBM Act. However, there have been calls recently that it should be reinstated because the pandemic has dented the government's revenue sources and the expenditure has increased. What do you know about Chandrayan 3? Chandrayan 3 is a proposed project of Indian Space Research Organization to go and explore moon given that Chandrayan 2 could not land on it successfully. PM 2.5, what is this PM 2.5? They are very small micro, 2.5 microns. PM 2 stands for? Particulate matter. Particulate matter. So 2.5, what is the unit? Micron. Micron or microtransmitters? Micron. Yeah. So what is the present level of PM 2.5 or we can say annual average in Delhi and we can say NCR approximate. Sir, I don't know. Anyway, what could be the unit of that? This is the unit of the size of the particle as you have just mentioned. There is micrometer. You have mentioned. Yes, sir. What would be the unit of that? Sir, I don't know, sir. If we measure particulate matters. Anyway, that will be MCM, microgram per cubic meter. Anyway, no problem. Now, related with economics. You have studied economics from Delhi University, Saint Stephens. So what is the logo for University of Delhi by the way? It's an elephant. Elephant. And what is written in Sanskrit? Sir, I've read it. You start with Satyam. Yes. Yes, sir. Anyway, you might be very well aware of P&B prod. P&B. Punjab P&B prod. Punjab National Bank prod. Are you aware of? Yes, sir. Okay. So what was the major reasons that this fraud occurred? I believe that this fraud was the one where fake letters of receipts were issued by Meera Modi. Yeah. One. And what else? Sir, this is... And the wrong was misuse of Swift. So what is that Swift? Is that an acronym? And if he is, then it stands for... Sir, misuse of I cannot... Swift, S-W-I-F-T. It is an acronym. Anyway, this is an acronym. It stands for... Society for Worldwide Interbank Financial Telecommunication. Telecommunication. That's right. So this is the whole name of Swift. Okay. So misuse of Swift was there. And in addition to that, I-C-A-I did not exercise its powers. What is this I-C-A-I by the way? Sir, I think Institute of Chartered Accountant of India. That's right. So it did not exercise its function properly. It did not bring it to the notice of the government that was happening. Keeping this in view. Yes. Number one, an act was enacted. What was the name of that? Sir, Economic Appenders Act. The Fugitive Economic Appenders Act. Yes, Fugitive Economic Appenders Act. Yeah, very right. Now you tell me what do you mean by Fugitive Economic Appenders Act? Sir, there is a very specific definition given in the bill that a person should have committed a fraud of at least 100 crores. That's right. Number one. And that he was called for a hearing by the specific court and he did not appear before the court. Led away the country. Led away the country then he would be declared a suit. This is Fugitive Economic Appenders Act. Yes, sir. And keeping in view the facts that I-C-A-I did not exercise its power, did not exercise its function properly under the Companies Act and amendment was made simultaneously with this act was enacted. So what was that amendment made in the Companies Act? Can you tell me? And authority was created so that it can look after this problem. So what was that authority and under which section of the Companies Act that authority was created? Sir, I can't seem to- Anyway, no problem. Now, you are from- Lucknow, sir. Lucknow, okay. So in Lucknow, DeafX4 was organized, say about two years back. Yes, sir. Can you recall that? I do have a very faint memory of the same. I did not read about it. I haven't read about it in great detail recently, but I know that DeafX4- Okay. Smart city performance index. Are you aware of that index? Smart city performance index. My question here is that which was the state? This time what happened when this index was prepared? It was also seen that which is the state which is performing best all over the country? Individuality is number one as it was being done earlier. And last time it was also decided that a state should also be identified, that this is at number one, this is at number two, this is at number three. So which was the state which was placed at number one? Sir, I think that I read about it. I'm not exactly sure about it, but I think if I were to guess the state, I think it would be Uttar Pradesh. It is Uttar Pradesh. Yes, sir, because I think I had some- Placed at first as well as state as a whole is concerned. I had a faint memory about it. Okay. Can you name famous economists from our country? Sir, Amartya Sen, Dr. Amartya Sen, Dr. Amartya Sen, Dr. Amartya Sen, Dr. Amartya Sen, Dr. Amartya Sen, Dr. Amartya Sen, He is novel laureate also, Dr. Amartya Sen. So what was his- I mean, what for he was awarded Nobel Prize? Sir, he was awarded his Nobel Prize for his- For his theory on famine, I am not wrong, on a theory on famine that he wrote that famine was not the result of absence of food prices in India, rather it was the result of the British policies in India. Okay, there is a state in southern India in which an advisory council or committee, economic advisory council has been constituted, which is that a state? Tamil Nadu. And this is headed by one of the Nobel laureates, by a Nobel laureate. What is the name of the Nobel laureate? By whom it is headed? So, By far, Mr. Abhijith Banerjee, S.T.A.Dapura. S.I.Y.A. S.N.A.Dapura. So I was the one who shared Nobel prize with him, and who was the third person who shared Nobel prize with Adal, with Abhijith Banerjee. There were three persons. I can't seem to. Okay, thank you. You are an economic student from Sand Stevens College. So, before we go on to economics, can you tell me about the minority status of the Sand Stevens College? Sir, Sand Stevens College is a minority government funded college under Article 29 and Article 30 of the Constitution of India as a result of which it has a body which is responsible for appointing the principal. The principal can be majorly from the Christian community and there are around 400 seats that are available every year for the undergraduate students and they have been given the right to reserve at least 50% for the minorities, especially for the Christians. So, for example, let's say in my batch of economics, there were around 55 students. Around 27-28 were reserved for the Christian minorities, whether they come from CNI or they come from PWD CNI, there was different categories. Then, amongst the other seats, the reservation policies apply. So, in that context. Okay. So, recently, a few years ago, there was a controversy related to the minority status of polygon Muslim University. Do you think it is in the spirit of the Constitution that universities and colleges of higher education should be given the minority status? Personally, I don't think so that any school or college should be given any minority or majority status. I think these are very prestigious universities and they can survive even without that status also. So, whether it is Hindu Banarasanthi University or whether it is Aligarh Muslim University or whether it is St Stephen's College, these are all very prestigious colleges and universities which can either raise funding or which have enough clout within themselves that they can survive even without the minority status. Okay. So, now, coming to the economics part, you mentioned FRBM Act. Yes. Can you mention some of the mandatory statements which have to be made by the government under FRBM Act? So, the first one is a medium term fiscal policy statement. The second one will have to be macroeconomic framework statement. And the third one has to be, I'm not able to recall, but I think it is expenditure statement. It's fine. It doesn't matter. Can you define fiscal deficit for me? So, fiscal deficit is a difference between the expenditure of the government and the revenues, revenues which are generated from non-borrowed sources. So, basically, it indicates the borrowing potential. What does the government plan on borrowing next year? Okay. Suppose I say that Ukrainian crisis has been a blessing in disguise for India economically. Can you tell me the pros and cons of this statement? So, in terms of why it can be considered a blessing in disguise is the fact that our wheat export is supposed to be rising. They were 1.5 million tons last year and they've risen to around 6 million tons recently and they are expected to rise to 10 million tons in that context. Also, the gap that has been created in various electronics exports can be bridged by us. Recently, we crossed 400 billion target of exports and the major component was engineering goods and crisis helped us. So, negatively, if I were to look at the issue, I think the oil crisis is going to dent our GDP growth by 1% as Raghuram Rajan has said. So, secondly, I think that the price pressures will not only be felt by the people who buy oil but since oil is used as a component in all the production processes, then this may lead to entrenching of inflation and RBI may have to let go of its accommodative stance and which will hurt growth eventually. So, can we say that this oil related strain on the economy is a supply side shock? Yes, it is a supply side shock. So, what will be the response of the inflation targeting regime in case the inflation reaches 6% due to this kind of supply side shock? Sir, a supply side shock will feed into a demand side shock in terms of let's say somebody who has a consumption expenditure, very less consumption expenditure. Now, he will have to pay more for oil. He will have to pay more for other communities. So, his demand will also decrease. So, it will also have a demand effect. But since RBI does not, since the government only has limited options to curb supply side inflations, the only option that is available to RBI under the inflation targeting framework would be to cut interest rates because if interest rate, if the inflation rate crosses 6%, then interest rates will have to be increased and that will reduce consumption spending power of the people and that will pull a demand side effect on the inflation front and this will pull down prices. So, how do you measure poverty and unemployment in India? First poverty, then unemployment. So, poverty is measured using headcount ratio under different committees who have given the recommendations, Tendulkar committee and I think recently RBI also brought out a multidimensional poverty report according to which around 37% of population is multidimensionally poor. Also, we use the World Bank. What is the RBI? Niti Iyogh's Multidimensional Poverty Report. Unemployment is usually measured using periodic labour force data and there are also private sectors like centre for monitoring Indian economy which brings out data on unemployment. There was a lot of controversy regarding the veracity of the figures given by different surveys regarding unemployment. What is your stand on that? So, I think that if I were to give an example of my state, let's say Uttar Pradesh, it is supposed to have the lowest unemployment rate in India of around 2.4%. But we will also have to look at the fact that a lot of people who are actually searching for employment, they have actually held back, they have not officially qualified themselves as looking for jobs. So, they are not counted in the unemployment figures. So, when such surveys say that unemployment rate is 2.4%, we have to be a little circumspect that it is not actually 2.4%. It's just that a lot of people are not actually looking for the job because they have become so confident that they will not find one. So, there might be certain but then there are certain surveys who extrapolate this figure of unemployment to let's say 10% to 15% that is also wrong. I think employment rate in UP as per my estimate should be around 5% to 6% and not 2.4%. Okay, my final question. What are randomized controlled trials? So, randomized controlled trials is an experiment-based trials in which two groups are created. One to which an actual medicine, let's say, if it is conducted for medicine, an actual medicine is provided. For the other group, a placebo is provided but the participants of these groups are selected in a very random manner. And they are not told whether they are receiving placebo or they are receiving the actual medicine. Or they are receiving income, let's say, for basic minimum transfer, basic income transfer. And then the results are calculated to come to a conclusion about that small whether the medicine is working or not. This randomized controlled trial was one of the reasons why Abhijeet Banerjee and Esther Duplo were given the Nobel Prize. It's a tool to test the efficiency of any medicine or economic policy. Thank you, sir. Yes, sir. Yes, sir. One thing I will ask, because you heard geography, how La Nina effect is beneficial for India? So, La Nina is the cooling of waters in the central and eastern Pacific Ocean. So, it helps in an economy because it leads to usually higher than average rainfalls in the southwest monsoon season of India. So, this leads to both greater water availability in our reservoirs. And at the same time, it leads to greater productivity of crops. However, there is also a negative side to it that it may lead to flood also in southern India. Okay. My point is now your interview is over.