Question 3DiscussGS3GS3

What are the reasons behind the consistent fiscal deficit in India? Do you think there are advantages in operating with a fiscal deficit for developing countries like India? (Answer in 150 words)

Introduction

India has maintained a fiscal budget since a long time. However able deficit have progressively declined with current target of 4+4% in FY26.

23 words

Main Body

Reasons behind consistent fiscal deficit (1) Weighing: Focusing on social sector spending to pull a vast majority of people out of poverty. Example: Upskilling on Right to education and MGNREGA (2) Improper tax/revenue collection due to tax evasion and lack of effective implementation of tax laws. (3) Economic slowdown further decreasing GDP figure of 6.4% in FY25 expected to above 8% in FY24. (4) Increased spending as economic stimulus due to slowdown. Example: Deficit rose to 9.2% during 2020-21 due to COVID Advantages of fiscal deficit in emerging markets: (1) Equitable distribution of resources, meeting welfare goals. Example: Tax money used to fund Pradhan Mantri Abhiyaan (2) Economic stimulus capability in case of economic downturn. Example: Success of Aatmanirbhar Abhiyaan package is uncerainty economy. (3) Economic stimuli capacity in case of economic downturn. Example: Success of Aatmanirbhar Abhiyaan package in uncertanity economy. Hence fiscal deficit with intrepid must be dealt responsibly according NK Singh Committee

— Aditya Narayan H · AIR 68

155 words1 paragraphs

Conclusion

Hence fiscal deficit with intrepid must be dealt responsibly according NK Singh Committee

13 words

Diagram

Bar chart showing fiscal deficit over years with values around 6%, 4%, 5%, 4.8% with years labeled as 22-23, 23-24, 24-25 labeled as FIG: Fiscal deficit over the years

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Topper

Aditya Narayan H

AIR 68

Subject & Paper

GS3GS3

Topic

Economic Development

Government Budgeting

Fiscal Deficit and Economic Development

Writing Stats

191

Total words

Paragraphs

formal

Tone

Linked PYQ

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