AIR 374 · CSE 2024 · GS3 · 56 pages

Devansh Sarswat: GS3 answer copy

20 answers by Devansh Sarswat, as written in the test. Each question opens a page with how other toppers answered it.

The questions

The answers

Question 1 · 10 marks · 149 words written

Fiscal policy can be a key tool to reduce income inequality as well as make the poorest and the downtrodden a part of the country's growth story. Discuss in the context of India.

Opening · a definition

Fiscal Policy refers to policy in respect to matters of Expenditure and Income of state which has quite an impact on economic growth of the country.

Body · points

Current Fiscal Policy Regime → Low capital expenditure (only around 13% of GDP); → high amount of non-merit expenditure e.g. freebies → taxation regime being inefficient (7 in 100 are taxpayers)

Key tool to Reduce inequality

  1. Increase focus on capital expenditure; (Counter cyclical fiscal policy as suggested by Economic survey)

  2. Reducing Revenue expenditure

  • rationalisation of subsidies
  • reducing freebies
  1. Infrastructure creation e.g. Roads, Public Projects e.g. National Infrastructure Pipeline As per World Bank, 1% creation (spending on) of infrastructure leads to increase in employment by 1%.
  2. Rationalisation of tax regime
  • increase coverage of TDS

Close · a framework

(15th Finance Commission) So, Fiscal Policy based on the aforesaid parameters can contribute heavily towards achieving SDG 1 (Poverty) and SDG 10 (Inequality).