Indian Economy and Issues-Government Budgeting [IAS (Admin.) IAS Mains GS Paper 3 (Science-Tech, Economy, Environment, & Disaster Management)]: Questions 7 - 11 of 12

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Question 7

Government Budgeting
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Describe in Detail

Essay▾

“Contrary to belief, demonetisation was not a case of a ‘good idea, bad execution’ . It was a fundamentally flawed idea borne out of overriding of institutions and circumventing consensus.” Critically comment. (250 Words)

Explanation

Introduction:

The 8 November 2016 decision by the Prime Minister to extinguish nearly nine-tenths of the value of currency in circulation and render ₹ 500 and ₹ 1,000 banknotes worthless overnight was a misguided act of coercion that shocked and had an impact on every single Indian.

Demonetisation though had many positive impacts like:

  • Black money: Ou…

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Question 8

Government Budgeting
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Describe in Detail

Essay▾

Despite stringent measures, India has been unsuccessful in improving tax compliance rate. In your opinion, what measures should be taken to improve tax compliance in India? Discuss. (250 Words)

Explanation

Unsuccessful in Improving Tax Compliance:

  • Rate of tax compliance is low in India, with 36 % of all individual taxpayers in the organized and unorganized sector filing tax returns.
  • Some of the behavioural factors considered include the complexity of tax filing mechanisms, social status and lie aversion.
  • Tax compliance among individual taxpayers is at 1…

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Question 9

Government Budgeting
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Describe in Detail

Essay▾

What is capital gains tax? What is the rationale behind Centre՚s decision to bring back the long-term capital gains tax (LTCG) on equities, which was scrapped in 2004 - 05? Discuss its implications. (250 Words)

Explanation

Background:

In the recent budget, the government announced the imposition of 10 % tax on gains of over ₹ 1 lakh made on any form of investment in listed equities and mutual funds with a holding period of over one year.

What is a Capital Gain?

  • Any profit or gain that arises from the sale of a ‘capital asset’ is a capital gain. This gain or profit is ch…

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Question 10

Government Budgeting
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Describe in Detail

Essay▾

What do you understand by helicopter money? Examine how demonetisation affected helicopter money in India. (150 Words)

Explanation

Introduction:

Helicopter money is a tool of unconventional monetary policy that has been proposed as an alternative to quantitative easing (QE) when interest rates are close to zero and the economy remains weak or enters recession. It is a hypothetical, unconventional tool of monetary policy that involves printing large sums of money and distributin…

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Question 11

Government Budgeting
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Describe in Detail

Essay▾

One of the purported objectives of demonetisation was digitisation of India. Discuss critically the role of fin-tech multinationals in pushing India towards digitisation and the impact of demonetisation on making India a cashless economy. (250 Words)

Explanation

Introduction:

The stripping of legal tenders of notes of ₹ 500 and ₹ 1000 one year back paved the way for demonetization in India. Demonetization had digitalization as one of its objective.

Role of Fin-Tech Multinationals in Pushing India Towards Digitization:

  • Global financial forces are constantly looking for new avenues of profit. There is a push to…

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