Budgeting and Fiscal Policy [IEcoS (Economic Services) Indian Economics]: Questions 1 - 6 of 11

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Question 1

Appeared in Year: 2019

Describe in Detail Subjective▾

Critically examine the rationale of the withdrawal of a significant volume of currency in circulation in India in the recent past. Do you think that this temporary shock will lead to deeper and long-term recession in the economy? Give reasons for your answer.

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Explanation

  • Demonetization withdraws the legal tender status of 500 and 1000 notes in the year 2017 November 8. This is actually done
    • To tackle the black money in circulation. (This black money is the major source for terrorism, smuggling etc. by tracking and ending this will help to curb the above mentioned problems also)
    • To reduce the circulation of cash and t…

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Question 2

Appeared in Year: 2019

Describe in Detail Subjective▾

Critically evaluate the problems relating to the implementation of Goods and Service Tax (GST) .

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Explanation

Goods and Service Tax (GST) is an indirect tax which came into effect in India from 1 July 2017 and it is considered to be a milestone in the history of India. Many problems are faced during the implementation of GST. They are as follows:

  • Input tax credit system (you will get reduction on tax that you have already paid on inputs at the time of payin…

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Question 3

Appeared in Year: 2018

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What do you understand by the Fiscal Responsibility and Budget Management (FRBM) act? Explain its importance in brief.

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Explanation

FRBM Act

FRBM Act was introduced in India in the year 2000 by the then finance minister Yashwant Sinha and it was approved by the union cabinet in the year 2003. The major objectives behind the act is to bring transparency in the system of India՚s fiscal management and thereby achieve long term fiscal stability, financial discipline, and flexibility

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Question 4

Appeared in Year: 2018

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Analyze the evolution of deficits and debts in India since the 1980s. What type of measures would you suggest to achieve fiscal balance?

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Explanation

Government Budget
  • If the government is in deficit means it is not getting adequate revenue in line with increasing expenditure (expenditure > revenue) . Increasing population, supply of public goods, take care of developmental programmes, lack of investment on productive activities, inefficient utilization of resources is some of the reasons that le…

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Question 5

Appeared in Year: 2018

Describe in Detail Subjective▾

Why has the government of India considered the introduction of the goods and service tax (GST) to be a great leap forward in the context of the Indian economy?

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Explanation

Goods and Services Tax (GST)

In India GST (indirect tax) is introduced in 1 July 2017 to simplify the complex tax structure that is prevailing in the nation and to achieve the dream of “One Nation One Tax” . Many central taxes and state taxes are subsumed under GST which includes excise duty, service tax, additional customs duty, VAT, octroi. There …

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Question 6

Appeared in Year: 2018

Describe in Detail Subjective▾

Do you agree that the recent demonetization in India has not yielded the desired outcomes in respect of curbing the menace of black money? Give reasons in support of your answer.

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Explanation

Black Money

Yes, I agree that the recent demonetization (8 November 2016) in India has not yielded the desired outcomes in respect of curbing the menace of black money. One of the main aims of demonetization in India is to track black money, prevent corruption and stop terror funding. But it was a total failure even after three years. Economy faced …

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