AIR 4 · CSE 2025 · GS3 · 58 pages

Raghav Jhunjhunwala: GS3 answer copy

21 answers by Raghav Jhunjhunwala, as written in the test. Each question opens a page with how other toppers answered it.

The questions

  1. QStudent Concerns / Query

The answers

Question 1 · 10 marks · 185 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 definition

None written.

Body · points

Fiscal Deficit refers to the excess of Expenditure of govt over its receipts. For FY23-24, it was ~ 5.6% of GDP (E.S. 23-24)

Factors contributing

  1. subsidies burden (Ex: Agri <
  • Fertilizer
  • MSP
  • Irrigation)
  1. Social welfare Expenses (Ujjuala, PM-AWAS)

  2. Untapped tax Revenue (low base) and non-tax Receipts

  3. Freebies culture gaining political momentum.

Potential consequences

  1. High Interest burden (~19% of Budget size) → loss of resources.

  2. Fall in credit Ratings (BBB-)

  3. decline in FDI to India due to debt sustainability concerns.

  4. Squeezed space for more critical expenses (like R&D, etc)

Measures Required

  1. Rationalizing subsidies (Ex: Shanta Kr. Committee : Reducing PDS coverage to 40% popn)

  2. However, boosting Cap Exp. is rather good (& should be promoted over Rev. Exp. for long run capacity + Revenue gain)

Close · a summary

CapEx % of GDP | | . 3.4% | . | . | . 2.1% |___________ 20-21 24-25

F.D | | 9.2% . | . | . | . 4.9% |___________ 20-21 24-25 (Projected)

Thus, Debt sustainability is critical to ensure macro-Economic & Financial stability (RBI)