A topper · GS3 · 54 pages

Komal Puria: GS3 answer copy

19 answers by Komal Puria, as written in the test. Each question opens a page with how other toppers answered it.

The questions

The answers

Question 1 · 10 marks · 155 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 currently stands at 5.1% of GDP far above 3% target (FRBM).

Body · points and prose

Factors responsible

  1. Global uncertainties -
Diagram
COVID-19 -> Russia-Ukrain War -> Israel-Hamas issue | --------------------------- | | Increased oil & gas prices supply chain disruptions | Increased fiscal deficit
  1. Developmental & non-developmental expenditure -> capex, infrastructure creation -> subsidies, PDS etc.
  2. High logistic cost (14% of GDP) far above world average.
  3. Low exports (<3% of world) & Import dependency.

Potential consequences of high FD

  1. Crowding out of private sector
  2. lack of capex due to high FD.
  3. Development & asset creation compromised.
  4. Twin deficit problem - High FD & High Current Account Deficit
  5. increased government borrowing & degraded Sovereign credit ratings.

Measures to improve FD

  1. Supporting manufacturing sector and increasing exports (2 trillion target - foreign trade policy 2023)
  2. MSME led growth (45% exports, 30% GDP contribution)
  3. Diversification of supply chains & reduced import dependency (Atmanirbhar Bharat)

Close · a vision

Curbing fiscal deficit within limit is pre-condition of goal of 30 trillion economy by 2047 (Amrit Kaal).