{"id":223829,"date":"2023-01-25T21:24:42","date_gmt":"2023-01-25T15:54:42","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=223829"},"modified":"2023-02-20T15:10:14","modified_gmt":"2023-02-20T09:40:14","slug":"building-resilience-for-the-long-game","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/building-resilience-for-the-long-game\/","title":{"rendered":"Building resilience for the long game"},"content":{"rendered":"\n

Source<\/strong>– The post is based on the article \u201cBuilding resilience for the long game\u201d <\/strong>published in the Business Standard <\/strong>on 25th January 2023<\/strong>.<\/p>\n

Syllabus: <\/strong>GS3- Indian economy and mobilisation of resources<\/p>\n

Relevance<\/strong>– Issues related to fiscal policy<\/p>\n

News<\/strong>-The article explains the economic scenario around the world and for India. It also provides some suggestions for the upcoming budget.<\/p>\n

What is the expected economic scenario for FY2024 around the world and for India?<\/strong><\/h2>\n

2023 is likely to be a year of global economic slowdown<\/strong>. The impact of synchronised and aggressive monetary policy tightening<\/strong> cycles will be felt.<\/p>\n

Mild recession <\/strong>in both the US and Europe is expected.<\/p>\n

This will affect India\u2019s growth via weak exports and delayed private investmen<\/strong>t.<\/p>\n

India\u2019s real GDP growth <\/strong>can be below the estimated level.<\/p>\n

Nominal GDP growth<\/strong> is likely to be slow due to moderation in commodity price. Tax buoyancy<\/strong> is highly sensitive to nominal GPP. It means that a moderation in tax buoyancy <\/strong>is expected in FY24.<\/p>\n

What should be the focus of the coming budget?<\/strong><\/h2>\n

The budget should focus on fiscal consolidation<\/strong>. The central government\u2019s fiscal deficit of around 6.5 per cent of GDP.<\/p>\n

Public infrastructure spending<\/strong> should be increased, but without compromising on consolidation<\/strong>.<\/p>\n

It should be done by using money created by the reduction in food and fertiliser subsidy bills<\/strong>, and other revenue-raising mechanisms<\/strong> such as asset monetisation<\/strong>.<\/p>\n

There is a need to rationalise personal income taxes<\/strong> so that more individuals opt for the new regime of lower taxes and fewer exemptions.<\/p>\n

But a broader reduction in the effective tax rate<\/strong> will add to the government\u2019s fiscal burden, without boosting consumption<\/strong>. A more targeted support<\/strong> for lower income households, may be more worthwhile.<\/p>\n

From a medium-term perspective<\/strong>, it should aim for creating more jobs by boosting the manufacturing secto<\/strong>r. There is a need to steer away from protectionist measures<\/strong> such as Custom duty hikes.<\/p>\n

More focus on skill development<\/strong> to empower the youth, increased agriculture investments<\/strong> to boost farm productivity, and using digital infrastructure<\/strong> to find and connect new markets.<\/p>\n

In the long term, there will be high energy demand<\/strong>. So, it is essential that this increased energy comes with minimum environmental impact<\/strong>.<\/p>\n

India needs to be green first, rather than transition to green later<\/strong>. This requires investments in renewables, green technology and large-scale afforestation<\/strong>.<\/p>\n

Agriculture and food security<\/strong> depend on access to a consistent supply of fresh water. Investments are required to ensure water availability<\/strong> across the country.<\/p>\n

There is a need to create stronger counter-cyclical fiscal buffers<\/strong>. Setting aside a small percentage of revenues every year, will enable us to smooth out the fiscal deficit <\/strong>over the years.<\/p>\n","protected":false},"excerpt":{"rendered":"

Source– The post is based on the article \u201cBuilding resilience for the long game\u201d published in the Business Standard on 25th January 2023. Syllabus: GS3- Indian economy and mobilisation of resources Relevance– Issues related to fiscal policy News-The article explains the economic scenario around the world and for India. It also provides some suggestions for… Continue reading Building resilience for the long game<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[10503,216],"class_list":["post-223829","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-business-standard","tag-gs-paper-3","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704725957},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/223829","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=223829"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/223829\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=223829"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=223829"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=223829"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}