Analysis of Economic Policies from Economic Survey 2021-22 and Union Budget 2022-23
Analyze the impact of government policies on fiscal deficit, crowding out, public investment, inflation, and support for vulnerable groups in the context of the pandemic, focusing on the informal sector and rural economy. Explore concepts like Open Market Sale Scheme of FCI and steps taken for informal workers in rural India.
- Economic Policies
- Fiscal Deficit
- Crowding Out
- Public Investment
- Inflation
- Open Market Sale Scheme
- Informal Workers
- Rural Economy
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Gs-Special Economic Survey 2021-22 & Union Budget 2022-23 Practice Questions - II
Practice Question 7 The government s intension to keep fiscal deficit at 6.4% as announced in Union Budget, 2022 will lead to crowding of credit for private investments and rise in interest rates. Critically analyse. Introduction: What is crowding-out? What kind of situation leads to crowding out? Analysis: Is India close to be in a situation that crowding out may happen? Reasons in favour- o There is revival of business and demand in economy o Growth rate is rising very fast and there is sharp V- shape recovery Reasons Against- o There is still some excess liquidity in the economy o 2021-22 also had a very high growth despite a high (6.9%) deficit Conclusion: Will there be crowding out, is situation in 2021-22 comparable to 2022-23
Practice Question 8 A virtuous cycle can happen only with the government leading the way , the idea of public Investment led growth strategy in times of high retail inflation may not yield to real growth. Discuss. Introduction: What is a virtuous cycle How government can contribute towards that Analysis: Inflation and Virtuous cycle inter-relationship o How government investment create inflation or are linked to inflation Nature of inflation in India o Wholesale index inflation o Supply chain role in that inflation o Impact on retail o Difference between demand driven and supply-driven inflation Conclusion: Comment on nature of government investment in India and its impact on economy Will it create Inflation or growth
Practice Question 9 What is Open Market Sale Scheme (Domestic) of FCI? How it can help NGOs and civil society organizations engaged in relief or running community kitchens for vulnerable section in the time of the pandemic. Analyze Introduction: Why FCI auctions grain What is OMSS (D) Difference between TDPS supply and OMSS Analysis: FCI on the instructions from the Government sells excess stocks out of Central Pool through Open Market Sale Scheme (Domestic) [OMSS (D)] in the open market from time to time at predetermined prices called reserve prices. Under the OMSS (D) 2020-21 policy, a special dispensation for supply of food-grains is made to all the NGOs engaged in relief or running community kitchens for migrant laborer. Conclusion: To support migrant labourers, apart from providing ration and money, providing prepared food was also very important
Practice Question 10 Informal workers in rural India have been hit most due to pandemic. In this context elaborate on steps taken by the government for rural economy. Introduction: Who is informal worker (Informal workers consist of those working in the informal sector or households, excluding regular workers with social security benefits provided by the employer and government. Why there is disproportionate effect on informal workers due to pandemic o Less-educated and privileged work-force o Lack of social security Details: Some details on the extent of economic loss of informal sector due to pandemic o Lack of online work options o Lack of support from government schemes, such as loan moratorium Steps taken by government o e-SHRAM portal the National Database on Unorganized Workers (NDUW) o about two crore migrant workers have been provided Rs. 5000.00 crores directly in their bank accounts from Building & Other Construction Workers Cess Fund being maintained by various States. o Pradhan Mantri Garib Kalyan Yojana with a financial package of Rs. 1.7 lakh crore. o In order to facilitate employment of migrant workers who have gone back to their Home State, Pradhan Mantri Garib Kalyan Rojgar Abhiyan has been initiated in 116 districts for about 50,000 cr.
Practice Question 11 National Infrastructure Pipeline will catalyze an all-round development of Indian Economy- Evaluate the above statement? Introduction: importance of infrastructure What is national Infrastructure Pipeline? 1.NIP is a first-of-its-kind initiative to provide world-class infrastructure across the country based on financing PPP projects to completion through viability-gap funding. 2.It will improve project preparation, attract investments (both domestic & foreign) into infrastructure, and will be crucial for attaining the target of becoming a $5 trillion economy by FY 2025. Analysis: infrastructure financing in India: gaps and funding Benefits of national infrastructure pipeline
Practice Question 12 Why is India witnessing a start-up revolution and a sudden rise in number of unicorn companies? What is the implication of rise of these on Indian economy?
