AIR 274 · CSE 2024 · GS3 · 58 pages

Dommeti Vinay: GS3 answer copy

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

The questions

The answers

Question 1 · 10 marks · 174 words written

Highlighting the factors contributing to high fiscal deficit in India, discuss the potential consequences of such deficit and suggest measures to ensure fiscal consolidation.

Opening · a figure

India's fiscal deficit stands at 5.4% of GDP against the target of 4.5% of GDP showing high deficit.

Body · points

Factors contributing:

  1. obligations of Revenue expenditure. → Salaries, pensions, schemes

  2. freebie culture → leading to high toll on exchequer. Eg: loan waivers by Telangana

  3. High subsidy burden. → 2.5% of GDP → food, fertilizer and electricity

  4. lack of investments in high output sectors → Manufacturing at 16% of GDP only.

Potential consequences :

  1. low investments and Gross fixed capital formation

  2. Job less growth → due to lack of skills

  3. lowering the credit rating of government Eg: Indian G-sec is present in BBA category

  4. Investors confidence will reduce ↳ FDI, FPI will be affected.

  5. Infrastructure Creating compromised.

Measures for fiscal Consolidation :

→ 1) freebie culture to essential subsidies (eg) : E-vouchers for health

→ 2) private investments ↳ Budget 2024-25 highlights this.

→ 3) skillng of youth → PM Kaushal Vikas 4.0

Close · a source

Hence fiscal deficit should be glided to 4.5% GDP as recommended by "N.K. Singh panel".