Syllabus- GS Paper 2- Effect of policies and politics of developed and developing countries on India’s interests

News- US President Donald Trump recently signed a stopgap bill, ending the longest government shutdown in US history. The 43-day shutdown, caused by a budget deadlock between the Executive and Congress, was the 11th since 1976—yet the most prolonged and politically charged of all.

What is a US Government Shutdown?

A government shutdown occurs when the US federal government loses legal authority to spend money because Congress fails to pass annual appropriations or a stopgap funding bill by the October 1 fiscal deadline.

Under US law, federal agencies cannot operate or pay employees without approved funding, forcing partial or complete closure of departments.

Why Shutdowns happen in the US (But not in India)

Separation of Powers

The US follows a presidential system where the Executive and Legislature are separate and independently elected.
The President cannot guarantee congressional approval of the budget.
Failure to pass the budget does not lead to the resignation of the government.

Legislative Gridlock

When the two Houses of Congress—especially the Senate—are politically divided, the budget gets delayed.
Key bills require 60 Senate votes; inability to reach this threshold triggers deadlock.

Policy Conflicts

Shutdowns often arise due to disagreements on politically sensitive issues.
In the recent case, disputes over funding for the Supplemental Nutrition Assistance Program (SNAP) significantly delayed negotiations.

In Contrast, India

The Executive is part of Parliament; if the budget fails, the government effectively loses confidence.
Parliament does not shut down government operations; vote-on-account provisions ensure continuity.

How the US Budget Process Works

Fiscal Calendar- The US fiscal year runs from October 1 to September 30.
Budget Preparation- By the first Monday of February, the President submits the budget proposal. Committees in the House and Senate then debate, amend, and negotiate its details.
Hard Deadline- All appropriations must be passed by October 1. If funding lapses, a “funding gap” triggers a government shutdown under the Antideficiency Act.
Temporary Relief- Congress can pass a Continuing Resolution (CR) to temporarily fund the government, as occurred to end the 43-day shutdown.

Economic and Social Impact of Shutdowns

Disrupted Public Services – Government shutdowns lead to the closure of national parks, furloughs of federal employees, and delays in tax refunds, welfare programmes, and regulatory functions.
Economic Loss – Each shutdown results in billions of dollars in lost productivity, while businesses reliant on federal contracts face uncertainty and cash-flow challenges.
Rising Fiscal Stress – Despite the size of the US economy, the fiscal deficit remains high. For FY2025, the deficit stood at $1.8 trillion, with receipts of $5.2 trillion and spending of $7 trillion. Growing deficits expand public debt and raise interest payments, which constitute the second-largest federal expenditure.
Loss of Public Confidence – Repeated shutdowns undermine trust in democratic institutions and highlight how hyper-partisanship can hinder effective governance.

Lessons for India

Executive–Legislature Coordination: India’s parliamentary system works smoothly when the government and Parliament cooperate, ensuring the budget passes on time and governance continues without disruption.
Fiscal Discipline: The US deficit problem shows why India must stick to fiscal responsibility, follow FRBM rules, and keep budgeting transparent to maintain economic stability.
Continuity Mechanisms: Provisions like the Vote on Account and constitutional safeguards ensure essential services keep running even during political uncertainty, preventing shutdown-like situations.
Avoiding Polarisation: The US gridlock shows how harmful political divisions can be. India needs strong dialogue and consensus in Parliament to avoid financial deadlocks.

Conclusion

The US shutdown highlights how executive–legislative conflict in a presidential system can disrupt governance. India’s parliamentary model, despite its own challenges, provides stronger continuity and fiscal stability. The episode underscores the value of political cooperation, robust institutions, and responsible fiscal management.

Question– Government shutdowns in the US demonstrate how executive–legislative conflicts can disrupt governance and the economy. Examine how India’s parliamentary system avoids such disruptions and suggest measures to strengthen fiscal discipline, continuity of services, and political cooperation.

Source: IE