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“It is important not only to know how to counter the economic stagnation but also how not to counter it”. Deliberate upon  the statement in the context of rapidly increasing fiscal deficit of Centre and states in the country.

Topic:  Inclusive growth and issues arising from it.

1. “It is important not only to know how to counter the economic stagnation but also how not to counter it”. Deliberate upon  the statement in the context of rapidly increasing fiscal deficit of Centre and states in the country.(250 words)

The Hindu

Why this question:

The Centre and the States are so short of resources that their fiscal deficit is burgeoning. The Prime Minister, at a function of the Associated Chambers of Commerce and Industry of India recently, was optimistic but the Reserve Bank of India (RBI) Governor was less positive, admitting that the country’s economic problems are also structural. Thus the question.

Key demand of the question:

Discuss the current economic conditions of the country. Explain in detail the causes and concerns of the fiscal deficit of the states and the country. Suggest methods and measures to overcome it.

Directive:

Deliberate – Weigh up to what extent something is true. Persuade the reader of your argument by citing relevant research but also remember to point out any flaws and counter- arguments as well. Conclude by stating clearly how far you agree with the original proposition.

Structure of the answer:

Introduction:

Explain what economic stagnation is.

Body:

Give a brief introduction about the increase of Centre and state’s fiscal deficit in the recent times.

Explain the recent steps to contain the situation.

Give the defects in taking such steps.

Suggest requires ways to be taken in this regard.

Give a futuristic way forward for the same.

Conclusion:

Conclude with solutions and way forward.