Skip to main content

descriptive Question-Answer 2

Office of Profit

What is the ‘office of profit’ under the Indian Constitution?

The Constitution of India, under Article 102, clearly stipulates that a person shall be disqualified for being chosen as, and for being a member of either House of Parliament if he holds any office of profit under the government of India or the government of any State (other than an office exempted by the Parliament by law), but not a Minister for the Union or for a State.

If a question arises as to whether a Member of Parliament has become subject to disqualification by virtue of holding the office of profit, the President of India shall take a decision on the matter on the basis of the opinion of the Election Commission of India, under Article 103 of the Constitution. The decision of the President in this regard shall be final and cannot be questioned in any court of law. Similar and analogous provisions exist for the Members of Legislative Assemblies of the States, under Article 191.

Full Convertibility of Rupee

What is full convertibility of rupee on capital account? Is the Indian economy ready to switch over to such full convertibility?

Convertibility of the domestic currency is one of the prerequisite for complete globalisation of any economy. Along with de-controls, freer movement of goods and services, removal of tariff and non-tariff restrictions and easier mobility of the workforce, convertibility is one of the important cornerstones of the process of globalisation and economic reforms.

Current account convertibility is already there and the stringent controls of pre-nineties over the foreign exchange have also been relaxed to a great extent. The stringent Foreign Exchange Regulation Act (FERA) was replaced by a relaxed Act called Foreign Exchange Management Act (FEMA), making the movement of foreign exchange easier. Resident Indians and companies now have access to foreign exchange for various purposes, including education and travel.  They can also receive and make payments in foreign currencies on trade account.

Full convertibility implies that the existing restrictions on the capital account would also be withdrawn. Corollary of this step would be that the domestic assets, including the real estate and stocks, could be sold to the foreigners and the payments in foreign currency could be received in the country without prior regulatory clearances.

Some steps have already been taken to facilitate the full capital account convertibility in the country. Foreign exchange has been allowed to flow into Indian stock markets through registered institutional investors. In addition, many categories of the resident Indians have been allowed to open foreign currency accounts abroad. Indian companies have also been making overseas acquisitions for which they have been given access to foreign currency resources.

It would, however, be wrong to presume that full convertibility on the capital account would result in lifting of all the restrictions. Even the developed countries like the USA block foreign investment in some of the sectors. Despite the government decision in this regard, it has not been easy for the non-resident Indians to acquire property and real estate in the country. The government of India, though has allowed Direct Foreign Investment (FDI) in most of the fields, yet certain caps have been put by the government on the FDI in some of the sectors. Most of these restrictions may continue even after the capital account convertibility is introduced. Benefits would be in terms of more flow of foreign capital into the economy, resulting in higher investment and the resultant growth rate. Further, the financial and capital markets would bring more profits to the domestic investors.

There are certain prerequisites for introduction of capital account full convertibility. The economy must be nearer to the global standards in the matter of fiscal deficit, inflation rate, interest rates, foreign exchange reserves, etc. It is said that the economy can be said to be ripe for capital account convertibility only if interest rates are low and de-regulated and the inflation rate in the three consecutive years had been around three per cent.

In addition, fiscal deficit should be low at around 3 per cent and foreign exchange reserves should be reasonably high. Further, the economy has to be in good shape, as full convertibility would result in bringing in the instabilities and fluctuations of the outside world into the economy, as it gets more connected to the outside world. Further, imperfections in the economy, like the urban-rural dichotomy and difference in the growth rates in various sectors like agriculture and industries, as well as services, must be removed.

Considering the above prerequisites it appears that the Indian economy is not yet prepared for switching over to the capital account convertibility. The only requisites which have been met are reasonably high level of foreign exchange reserves, mostly deregulated interest rates and relatively good condition of the economy as a whole. In most of the other areas there is lot more to be done. Interest rates as well as the inflation rate are higher than the required levels. Further, the imperfections of the economy are glaring as the services and industrial sectors are booming, but the agricultural sector which employs over 65 per cent of the total work force, is growing at a much lower rate of 2 to 3 per cent per annum.

Moderates and Indian masses

Why did the moderates lose appeal with Indian masses and failed to get the desired response from the people?

Between the period from 1885 to 1905, the Indian National Congress was dominated by moderate leaders, prominent among them being Dada Bhai Nauroji, Badrudin Tayabji, Surendra Nath Banerjee, M.G. Ranade, Madan Mohan Malaviya and G. Subramanya Iyer. As the expression ‘moderate’ suggests, most of these leaders believed in constitutional methods of agitation and pursuing limited objectives. Their basic objective was to arouse the political consciousness and national spirit among the Indians. Most of them had complete faith in British administration and justice. Their methods included passing of resolutions, holding meetings and sending petitions. Though their methods did not fetch them immediate gains, yet their contribution towards political and national awakening was of paramount value to the country.

But gradually, this group of early nationalists began to lose appeal with the Indian masses. There were several reasons and the foremost was the Boycott and Swadeshi Movement during the Bengal Partition. Many moderate leaders did not associate themselves with this movement and younger people within Congress started realising the futility of the ideology and techniques of moderate leaders. As a result, during the agitation against Bengal Partition, a large section of Indians lost faith in the sense of justice of the British. This resulted in loss of goodwill of the moderates and emergence of a new group of nationalists, popularly known as the extremists.

Emergence of new generation leaders like Lala Lajpat Rai, Bal Gangadhar Tilak, B.C. Pal and Arbinda Ghosh caught the fancy and following of the masses. Economic exploitation, resulting in impoverishment during the British rule, was also a major factor responsible for growing disillusionment against the British as well as the moderates. It was realised by all that the primary cause of poverty in India was the anti-Indians economic policies followed by the British.


Popular posts from this blog



13.0 Learning Outcome

13.1 Introduction

13.2 Initiatives towards Constitutional Status to Local Governance

13.2.1 Features of 73rd Constitutional Amendment

13.2.2 Features of 74th Constitutional Amendment

13.2.3 Decentralised Planning in Context of 73rd and 74th Constitutional Amendment Act

13.3 Initiatives after Economic Reforms

13.4 Functioning of PRIs in Various States after 73rd Amendment

13.5 Functioning of Local Governance after 73rd and 74th Constitutional Amendment: Observations

13.6 Conclusion

13.7 Key Concepts

13.8 References and Further Reading

13.9 Activities


After studying this Unit you should be able to:

• Identify the background of revitalisation of local governance;

• Understand the features of 73rd and 74th constitutional amendment;

• Discuss the initiatives after economic reforms; and

• Outlines the functioning of local governance in various states after the amendment.


The revitalization of Pancha…

General Studies :: Indian Polity #1

Constitutional evolution under British ruleRegulating Act 1773beginning of British parliamentary control over the East India Companysubordination of the presidencies of Bombay and Madras to BengalGovernor of Bengal made Governal-Generalcouncil of Governor-General establishedSupreme Court established in CalcuttaPitt’s India Act 1784commercial and political activities of the Company separatedestablished a board of control over the CompanyCharter Act 1813trade monopoly of the Company abolishedmissionaries allowed to preach in IndiaCharter Act 1833Governor-General of Bengal becomes Governor-General of Indiafirst Governor-General Lord William Bentickends commercial activities of the CompanyCharter Act 1853legislative and executive functions of the Governor-General’s council separatedopen competition for Indian Civil Services establishedIndian Council Act 1861establishes legislative councils at the centre, presidencies and provincesGovernor-General’s executive council to have Indians as non…



1.0 Learning outcome

1.1 Introduction

1.2 Concept of Democratic Decentralisation

1.3 Evolution of Democratic Decentralisation

1.4 Significance of Democratic Decentralisation

1.5 Democratic Decentralisation in India

1.6 Conclusion

1.7 Key concepts

1.8 References and Further Reading

1.9 Activities


After studying this unit, you should be able to:

• Understand the concept of Democratic Decentralization;

• Know the evolution and significance of Democratic Decentralization; and

• Describe the Democratic Decentralization pattern in India.


The dawn of 21st century is marked by decentralized governance both as a strategy and philosophy of brining about reforms and changes in democracies. These changes led to such virtues of transparency, responsiveness and accountability and ensures good governance. Today decentralization and democracy are the most significant themes in the development discourse. In the present contex…