Question 1 · 10 marks · 161 words written
Opening · a definition
Fiscal policy refers to efforts of government with respect to taxation and expenditure policy. It aims to take cyclic or countercyclic measures through government budget.
Body · points and prose
Fiscal Policy to reduce income inequality
- Multiple slabs of GST: GST on luxury services is 18%.
- Progressive taxation
- Sin tax: tax on use of coal and tobacco
- Indirect taxes rationalisation: They form largest component of income, but are regressive in nature.
Inclusive nature of fiscal policy
(1) Government right based schemes
- NFSA
- MGNREGA
- MDM-ICDS
(3) Caste based
- NSAP
- Eklavya school
(2) Government investment policy
- Agriculture infrastructure development fund (1 lakh cr)
- FIDF (2 million cr)
- 15800 cr to MSME
Way forward
(1) Proper implementation: only 49% of beneficiary covered under NFSA (GOI), only 33% of SCM fund disbursed (CAG) (2) Social Impact and Social audit Component (MDM) (MGNREGA)
Close · a framework
SDG10 of reduced inequality is needed to achieve equitable growth and social mobility.