Mains Answer Writing - 10 Jun, 2026

GS3

Economy

15 marks

India has recently undertaken major reforms to liberalise foreign participation in equity and government securities markets. Discuss the significance of these reforms in attracting long-term foreign capital. Also examine the potential risks associated with greater foreign portfolio investment in the Indian economy.

Attempt Challenge on App See Model Answer

Tips for your answer

Start with the reforms
Briefly mention equity liberalisation for foreign individuals, G-Sec market reforms (FAR expansion), and tax exemption on sovereign debt investments.
Explain the benefits
Focus on higher foreign capital inflows, deeper capital markets, improved liquidity, and lower government borrowing costs.
Conclude with risks and safeguards
Mention capital flight, exchange rate volatility, and external shocks, while noting that investment caps and regulatory oversight act as safeguards.

9.5/15

Topper’s Answer Sheet

With detailed evaluation

More Challenges

View All

GS3
Environment & Ecology
9 Oct, 2026
The Living Planet Report highlights a sharp decline in wildlife populations worldwide. What does this decline actually indicate? Discuss the major causes of biodiversity loss and suggest conservation measures.
View Challenge
GS3
Economy
Yesterday
How does a repo rate hike help control inflation? Discuss its impact on the Indian economy.
View Challenge
GS1
Physical Geography
7 Oct, 2026
Rapid urbanisation is intensifying the Urban Heat Island effect in Indian cities. Examine how urban planning contributes to rising heat stress and suggest measures to build heat-resilient cities.
View Challenge