Nov. 29, 2021

Mains Daily Question
Nov. 29, 2021

What do you understand by fiscal consolidation? What are the factors that should be considered for fiscal consolidation by the government?

Model Answer

Fiscal Consolidation refers to the policies undertaken by Governments (national and sub-national levels) to reduce their deficits and accumulation of debt stock. Thus, it is a process where government’s fiscal health is getting improved and is indicated by reduced fiscal deficit. Improved tax revenue realization and better aligned expenditure are the components of fiscal consolidation as the fiscal deficit reaches at a manageable level.

In India, fiscal consolidation or the fiscal roadmap for the centre is expressed in terms of the budgetary targets to be realized in successive budgets. The Fiscal Responsibility and Budget Management (FRBM) Act gives the targets for fiscal consolidation in India.

Following factors from the expenditure side and revenue side should be considered by the government to achieve fiscal consolidation.

  • Improved tax revenue realization by implementing measures like increasing efficiency of tax administration by reducing tax avoidance, eliminating tax evasion, enhancing tax compliance etc. are to be made.

  • Enhancing tax GDP ratio by widening the tax base and minimizing tax concessions and exemptions also improves tax revenues.

  • Better targeting of government subsidies and extending Direct Benefit Transfer scheme for more subsidies.

The appropriate amount of fiscal consolidation for each country will depend on a number of factors, including the strength of its economy, the public debt and interest developments, the ease of financing debt, and political decisions concerning taxes and spending

Higher economic growth rate will help government to get higher tax revenues as well. Augmentation of tax revenue is necessary to bring fiscal consolidation as there are limitations for reducing government expenditure in India.

Subjects : Economy

Nov. 25, 2021

Mains Daily Question
Nov. 25, 2021

Explain how proclamation of national emergency affects Centre state relations.

Model Answer

The president can declare a national emergency under article 352, when the security of India or a part of it is threatened by war or external aggression or armed rebellion. The normal fabric of the Centre-state relations undergoes a basic change during national emergency.

Effect on Centre-state relations

  1. Executive

In normal times, the Centre state can give executive directions to a state only on certain specified matters. However, during a national emergency, Centre becomes entitled to give executive directions on any matter. Thus, the state governments are brought under the complete control of the Centre, though they are not suspended.

The Parliament becomes empowered to make laws on any subject mentioned in the state list. Although the legislative power of state legislature is not suspended, it becomes subject to the overriding power of the Parliament. President can issue ordinances on the state subject, if the Parliament is not in session.

 In brief the Constitution becomes unitary than federal.

The president can modify – reduce or cancel, the constitutional distribution of revenues between the Centre and the states. Such modification continues till the end of the financial year in which the emergency is revoked.

 National emergency was proclaimed thrice. During this time the Centre becomes all powerful. The constitutions become unitary rather than federal without even amending the Constitution. However these powers are a necessary evil to enable central government to meet any abnormal situations effectively.

Subjects : Polity

Nov. 22, 2021

Mains Daily Question
Nov. 22, 2021

Civil Disobedience Movement was a step ahead of Non Cooperation movement in many respects. Discuss.

Model Answer

Civil Disobedience Movement (CDM) was launched by Gandhiji in 1930 on the issue of defiance of repressive salt law. It continued till 1934 and left and indelible mark on the Indian National Movement.

How CDM was a step ahead of Non Cooperation movement (NCM) :-

  • The philosophy behind CDM was not just non-cooperation with the British government, but active defiance of unjust laws. NCM’s underlying philosophy was just non cooperation with the British government.

  • CDM saw unprecedented participation of women , they took out processions, picketed liquor shops etc. In other words, the movement brought them out of the private sphere in public sphere.

  • The participation of masses in rural areas was far ahead than in NCM, illegal making of salt and its distribution became a national activity.

  • CDM put forward the demand of ‘Purna Swaraj’ or complete independence from British rule, NCM was vague in its definition of self rule.

  • CDM gave birth to many other movements like anti-chowkidara tax agitation, anti-Union Board movement, defiance of forest laws in Central India, Karnataka etc.

  • Though these movements were based on local and regional issues, the essence and strategy behind these movements was based on CDM. These movements helped to link local issues with national issues and thus made CDM hugely popular.

  • The number of people who went to jail was around 90,000 which was 3 times that of NCM.

CDM marked an important stage in the national fight for freedom from British rule. It put forward the demand of Poorna Swaraj on the national plane, which meant that there could be no retreat now. 

Subjects : Modern History
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