HPAS Mains General Studies Paper 3: Economic Planning in India. Five Year Plans: strategies and outcomes, Public / Private / Joint Sectors. Fiscal Policy, Fiscal Responsibility and Budget Management Act, 2003, Debt and Investment in India: Current Status, Growth and Development experience including Natural Resource Management.
Question : Discuss the status of the fiscal deficit in India and suggest some measures to keep it under check? (20 marks, 400 words)
|Understanding of Question:|
|Directive||Discuss: This is an all-encompassing directive – you must debate on paper by going through the details of the issues concerned by examining each one of them.|
|Introduction||Provide definition of fiscal deficit|
|Main Body||Status of fiscal deficit in India:|
∙ India’s fiscal deficit stood at 18 lakh crore at the end of first quarter in 2021, which is 9.3 % of the GDP.
∙ The Union budget has estimated the fiscal deficit for 2020-21 to be 3.3% of the Gross domestic product (GDP)
Reasons for increasing fiscal deficit:
∙ Lower Revenue Realisation
∙ Higher Expenditure
∙ Slowdown in economy
Measures to keep ‘Fiscal Deficit’ under check are:
∙ aggressive disinvestment
∙ cleaning up of balance sheets of regular commercial banks.
∙ tweaking the definition of expenditures
∙ deferment of some non-essential expenditure
|Conclusion||Improved tax revenue realization and better aligned expenditure are key to fiscal consolidation|
© 2023 Civilstap Himachal Design & Development