Topic– Indian economy : Issues
6) Union Budget 2019 contained many measures for socio economic improvement including direct income transfers which can likely affect fiscal prudence. Examine. (250 words)
Why this question
The budget presented this year introduced and expanded several schemes for overall socio economic improvement. There is a risk of such measures affecting the fiscal deficit of the country especially since indirect tax revenue growth has been muted because of GST. The question expects us to frame a perspective on these issues.
Key demand of the question
The question expects us to discuss the various measures introduced for socio economic improvement and whether it is likely to have an adverse impact on fiscal prudence. The question expects us to highlight the risks and challenges, and discuss the way forward.
Examine – When you are asked to examine, you have to probe deeper into the topic, get into details, and find out the causes or implications if any .
Structure of the answer
Introduction – Highlight that the budget has expanded social welfare spending and has announced a direct income transfer scheme as well.
- Discuss the major measures introduced for socio economic welfare such as income support of Rs 6,000 per year to small farmers who own less than 2 hectares of land, income tax rebate, Pradhan Mantri Shram Yogi Mandhan for unorganised sector workers with monthly incomes of less than Rs. 15,000 etc
- Discuss the likely impact it is likely to have in government spending. Discuss how the government plans to mobilize this revenue.
- Highlight the track record of the government on fiscal prudence by talking about the FD levels of the past year and projections. Examine whether tax revenue target is ambitious.
Conclusion – Give your view as to whether such measures make for smart economics or smart politics and discuss way forward.