2016 · GS Paper 4 · Q13 · 25 marks
ABC Ltd. is a large transnational company having diversified business activities with a huge shareholder base. The company is continuously expanding and generating employment. The company, in its expansion and diversification programme, decides to establish a new plant at Vikaspuri, an area which is underdeveloped. The new plant is designed to use energy efficient technology that will help the company to save production cost by 20%. The company's decision goes well with the Government policy of attracting investment to develop such underdeveloped regions. The Government has also announced tax holiday for five years for the companies that invest in underdeveloped areas. However, the new plant may bring chaos for the inhabitants of Vikaspuri region, which is otherwise tranquil. The new plant may result in increased cost of living, aliens migrating to the region, disturbing the social and economic order. The company sensing the possible protest tried to educate the people of Vikaspuri region and public in general that how its Corporate Social Responsibility (CSR) policy would help overcome the likely difficulties of the residents of Vikaspuri region. In spite of this the protests begin and some of the residents decided to approach the judiciary as their plea before the Government did not yield any result. (a) Identify the issues involved in the case. (b) What can be suggested to satisfy the company's goal and to address the residents' concerns?
In short
The case pits Corporate Growth against Community Well-being, with CSR used as persuasion, a trust deficit and an unresponsive government at its core. Prior consultation, local jobs, co-designed CSR and a community fund from the plant's 20% cost saving can satisfy both the company and Vikaspuri's residents.
Model answer
Ghissu Editorial · Verified 4 Oct 2026 · 296 words
Development versus autonomy
Regional balance is served, but residents bear the costs and were never consulted.
CSR as persuasion
Using Section 135 CSR to "educate" people after the decision treats it as public relations.
Trust deficit
Residents fear inflation and an influx of outsiders, so protest becomes their only voice.
Unresponsive government
A tax holiday for the company but no hearing for residents suggests Regulatory Capture.
Unequal gains
Cost savings and tax benefits go to shareholders while locals bear the costs.
Consult first
A Social Impact Assessment and public hearing on the lines of the 2013 land acquisition law [scheme].
Learn from Singur
Tata's Nano plant left Singur in 2008 and the Supreme Court quashed the acquisition in 2016 [case].
Local jobs
Reserve jobs and supply contracts for residents, train youth at an ITI and build worker housing to curb rents.
Co-designed CSR
A gram sabha and company committee chooses projects, reported in SEBI's BRSR [scheme].
Share gains
Part of the 20% saving funds a community fund on the District Mineral Foundation model [scheme].
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Development versus Rights Dilemmas5 questions
Asked in 4 of 14 sittings since 2013
- 2025In line with the Directive Principles of State Policy enshrined in the Indian Constitution, the government has a constitutional obligation to ensure basic needs – "Roti, Kapda aur Makan (Food, Clothes and Shelter)" – for the under-privileged. Pursuing this mandate, the district administration proposed clearing a portion of forest land to develop housing for the homeless and economically weaker sections of the society. The proposed land, however, is an ecologically sensitive zone densely populated with age-old trees, medicinal plants and vital biodiversity. Besides, these forests help to regulate micro-climate and rainfalls; provide habitat for wildlife, support soil fertility and prevent land/soil erosion and sustain livelihoods of tribal and nomadic communities. Inspite of the ecological and social costs, the administration argues in favour of the said proposal by highlighting that this very initiative addresses fundamental human rights as a critical welfare priority. Besides, it fulfils the government's duty to uplift and empower the poor through inclusive housing development. Further, these forest areas have become unsafe due to wild-animal threats and recurring human-wild life conflicts. Lastly, clearing forest-zones may help to curb anti-social elements allegedly using these areas as hideouts, thereby enhancing law and order. (a) Can deforestation be ethically justified in the pursuit of social welfare objectives like, housing for the homeless? (b) What are the socio-economic, administrative and ethical challenges in balancing environmental conservation with human development? (c) What substantial alternatives or policy interventions can be proposed to ensure that both environmental integrity and human dignity are protected?
- 2018A big corporate house is engaged in manufacturing industrial chemicals on a large scale. It proposes to set up an additional unit. Many States rejected its proposal due to detrimental effect on the environment. But one State government acceded to the request and permitted the unit close to a city, brushing aside all opposition. The unit was set up 10 years ago and was in full swing till recently. The pollution caused by the industrial effluents was affecting the land, water and crops in the area. It was also causing serious health problems to human beings and animals. This gave rise to a series of agitations demanding the closure of the plant. In a recent agitation thousands of people took part, creating a law and order problem necessitating stern police action. Following the public outcry, the State government ordered the closure of the factory. The closure of the factory resulted in the unemployment of not only those workers who were engaged in the factory but also those who were working in the ancillary units. It also very badly affected those industries which depended on the chemicals manufactured by it. As a senior officer entrusted with the responsibility of handling this issue, how are you going to address it?
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Question from the official UPSC Civil Services (Main) Examination 2016 paper. Answer written by Ghissu's engine and checked against our editorial standards. Found an error? Tell us and we correct it within 48 hours.