{"id":24960,"date":"2024-02-02T09:16:09","date_gmt":"2024-02-02T09:16:09","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=24960"},"modified":"2024-02-02T09:16:12","modified_gmt":"2024-02-02T09:16:12","slug":"fiscal-strategies-for-economic-resilience-upsc-daily-editorial-analysis-02nd-feb-2024","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/fiscal-strategies-for-economic-resilience-upsc-daily-editorial-analysis-02nd-feb-2024\/","title":{"rendered":"Fiscal Strategies for Economic Resilience &#8211; UPSC Daily Editorial Analysis &#8211; 02nd Feb 2024"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/edukemy.com\/upsc-current-affairs?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Current+Affairs\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1280\" height=\"300\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/19.png\" alt=\"\" class=\"wp-image-42406\" srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/19.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/19-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/19-585x137.png 585w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/a><\/figure>\n\n\n\n<p><br>In navigating the complexities of economic resilience, fiscal strategies emerge as crucial pillars for stability and growth. A judicious approach to public finances becomes paramount, necessitating a balance between stimulating economic activity and maintaining fiscal discipline. Governments must strategically deploy fiscal policies that not only address immediate challenges but also foster long-term resilience. This entails targeted investments in critical sectors, such as healthcare, education, and infrastructure, to enhance the overall capacity of the economy. Additionally, a focus on progressive taxation and efficient public spending is vital to ensure equitable distribution of resources and mitigate socio-economic disparities. The editorial underscores the importance of proactive fiscal measures that adapt to dynamic global conditions, positioning nations to withstand unforeseen shocks.<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\"><p><strong>Tag: <\/strong>GS \u2013 3 Fiscal Policy, Government Policies &amp; Interventions, Monetary Policy, Mobilization of Resources, Inclusive Growth<\/p><\/blockquote>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_73 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-69e0c9277befe\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-69e0c9277befe\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/fiscal-strategies-for-economic-resilience-upsc-daily-editorial-analysis-02nd-feb-2024\/#In_News\" title=\"In News:\">In News:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/edukemy.com\/blog\/fiscal-strategies-for-economic-resilience-upsc-daily-editorial-analysis-02nd-feb-2024\/#Current_Status_of_Indias_Growth_Trajectory\" title=\"Current Status of India\u2019s Growth Trajectory\">Current Status of India\u2019s Growth Trajectory<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/edukemy.com\/blog\/fiscal-strategies-for-economic-resilience-upsc-daily-editorial-analysis-02nd-feb-2024\/#Major_Challenges_for_the_Indian_Economy_in_2024\" title=\"Major Challenges for the Indian Economy in 2024\">Major Challenges for the Indian Economy in 2024<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/edukemy.com\/blog\/fiscal-strategies-for-economic-resilience-upsc-daily-editorial-analysis-02nd-feb-2024\/#Reforms_Required_for_Robust_Economic_Growth_in_2024\" title=\"Reforms Required for Robust Economic Growth in 2024\">Reforms Required for Robust Economic Growth in 2024<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/edukemy.com\/blog\/fiscal-strategies-for-economic-resilience-upsc-daily-editorial-analysis-02nd-feb-2024\/#Conclusion\" title=\"Conclusion\">Conclusion<\/a><\/li><\/ul><\/nav><\/div>\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_News\"><\/span><strong>In News: <\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Despite uncertainties on the global front, India stands out as the fastest-growing major economy, demonstrating stability in key economic indicators such as the current account deficit, currency, and inflation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Current_Status_of_Indias_Growth_Trajectory\"><\/span><strong>Current Status of India\u2019s Growth Trajectory<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Government&#8217;s Investment Strategy<\/strong><ul><li>Investment has surpassed GDP growth, reaching 34.9% this year.<\/li><li>There is a call for the government to moderate budgetary support to capital spending for achieving the targeted fiscal deficit of 4.5% of GDP by 2025-26.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Fiscal Consolidation in Election Year<\/strong><ul><li>Achieving fiscal consolidation in an election year is crucial.<\/li><li>The Ministry of Finance expects close to 7% growth next fiscal, envisioning India becoming a $7 trillion economy by the end of the decade.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Healthy Medium-Term Forecasts<\/strong><ul><li>Multilateral agencies forecast moderate GDP growth of 6.4% next fiscal.<\/li><li>Slower global growth and tighter financial conditions globally and domestically contribute to this moderation.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Inflationary Concerns<\/strong><ul><li>Core inflation in India has corrected quickly to 3.8%, and fuel inflation is at -1%.<\/li><li>High food inflation, linked to the underperformance of agriculture and the rural economy, remains a concern.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Climate Change and Economic Impacts<\/strong><ul><li>2023 marked the highest annual temperature, emphasizing escalating climate risk.<\/li><li>The Ministry of Finance stresses the need for research, development, and measures to adapt to climate change without compromising economic growth.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Monsoon<\/strong><ul><li>Overall rainfall was 6% below expectations during the monsoon season.<\/li><li>The SBI Monsoon Impact Index indicates improved agricultural productivity.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Continuous Thrust on Capital Expenditure<\/strong><ul><li>Capital expenditure during the first five months of 2023 was robust.<\/li><li>New company registrations increased, reflecting strong growth intentions.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Reclassified India&#8217;s Exchange Rate Regime<\/strong><ul><li>The IMF classifies India&#8217;s exchange rate regime as a &#8220;stabilized arrangement,&#8221; indicating a shift in perception.<\/li><li>This classification contrasts a fixed exchange rate with a floating system.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Declining Current Account Deficit (CAD)<\/strong><ul><li>India\u2019s CAD declined to 1% of GDP in the second quarter of 2023.<\/li><li>The CAD decrease is attributed to improved numbers according to RBI data.<\/li><\/ul><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Major_Challenges_for_the_Indian_Economy_in_2024\"><\/span><strong>Major Challenges for the Indian Economy in 2024<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Global Economic Integration<\/strong><ul><li>Rising geopolitical events pose a threat to India&#8217;s growth.<\/li><li>Geoeconomic fragmentation and a slowdown in hyper-globalization impact global trade.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Energy Security vs Transition<\/strong><ul><li>A complex trade-off exists between energy security and the ongoing energy transition.<\/li><li>Policy actions for energy goals can have spillover effects on other economies.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Artificial Intelligence (AI) Challenges<\/strong><ul><li>The rise of AI poses challenges, especially in the services sector.<\/li><li>The benefits of complementarity and risks of displacement are highlighted.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Rising Inflation<\/strong><ul><li>The impact of rising inflation on the broader economy is a major challenge.<\/li><li>Inflation affects growth by changing labor supply and demand.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Requirement of Skilled Workforce<\/strong><ul><li>Ensuring a talented and appropriately skilled workforce is a policy priority.<\/li><li>Despite an increase in employable percentages, more needs to be done.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Geopolitical Tensions<\/strong><ul><li>Geopolitical tensions, including events in the Red Sea, impact exports.<\/li><li>Estimates suggest lower exports due to the crisis in the Red Sea.<\/li><\/ul><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Reforms_Required_for_Robust_Economic_Growth_in_2024\"><\/span><strong>Reforms Required for Robust Economic Growth in 2024<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Moving Towards Fiscal Consolidation<\/strong><ul><li>Government debt to GDP ratio and interest payments necessitate fiscal consolidation.<\/li><li>Robust direct tax collections and higher dividend transfers are crucial.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Continuing Focus on Capital Expenditure (Capex)<\/strong><ul><li>Capex&#8217;s strong multiplier effect on growth demands continued focus.<\/li><li>Government capex to GDP ratio is expected to increase in 2023-24.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Need to Spur Consumption<\/strong><ul><li>Consumption growth needs a boost, especially in the lower-income category.<\/li><li>Measures to spur consumption demand are essential for economic revival.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Increased Spending on Human Capital<\/strong><ul><li>Investment in health, education, and skilling is crucial for the demographic dividend.<\/li><li>Higher expenditure on human capital is needed for meaningful employment.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Focus on Agriculture and the Rural Sector<\/strong><ul><li>Improving productivity in the agriculture sector is vital for rural incomes.<\/li><li>Adoption of technology and rural infrastructure development are essential.<\/li><\/ul><\/li><\/ul>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Focus on Contemporary Issues<\/strong><ul><li>Enabling a business-friendly environment, addressing environmental concerns, and uplifting marginalized sections require focus.<\/li><li>Emphasis on equitable, sustainable, and green growth is crucial.<\/li><\/ul><\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span><strong>Conclusion<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\"><li>The first advance GDP estimates project robust growth in the Indian economy, exceeding earlier predictions.&nbsp;<\/li><li>Government fiscal policies transitioning from pandemic-focused welfare to public investment have enhanced economic capacity.&nbsp;<\/li><li>However, challenges such as managing food inflation, adapting to climate change, and maintaining macroeconomic fundamentals need attention for sustained growth.&nbsp;<\/li><li>Policymakers face a challenging yet imperative task in steering the economy toward stability and prosperity.<\/li><\/ul>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"pcrstb-wrap\"><table><tbody><tr><td><strong>UPSC Previous Year Questions<\/strong><br><br><strong>Prelims (2018)<\/strong><br><strong>Q. Consider the following statements:\u00a0<\/strong><br>1. The Fiscal Responsibility and Budget Management (FRBM) Review Committee Report has recommended a debt-to-GDP ratio of 60% for the general (combined) government by 2023, comprising 40% for the Central Government and 20% for the State Governments.\u00a0<br>2. The Central Government has domestic liabilities of 21% of GDP as compared to that of 49% of GDP of the State Governments.\u00a0<br>3. As per the Constitution of India, it is mandatory for a State to obtain the Central Government\u2019s consent for raising any loan if the former owes any outstanding liabilities to the latter.\u00a0<br><strong>Which of the statements given above is\/are correct?<\/strong>\u00a0<br><strong>(a)<\/strong>\u00a01 only\u00a0\u00a0<br><strong>(b)<\/strong>\u00a02 and 3 only\u00a0\u00a0<br><strong>(c)<\/strong>\u00a01 and 3 only\u00a0 \u00a0<br><strong>(d)<\/strong>\u00a01, 2 and 3\u00a0<br><strong>Ans: (c)\u00a0<\/strong><br><br><strong>Mains (2019)<\/strong><br><strong>Q.1<\/strong>\u00a0Public expenditure management is a challenge to the Government of India in the context of budget-making during the post-liberalization period. Clarify it.\u00a0<br><br><strong>Mains (2014)<\/strong><br><strong>Q.2<\/strong>\u00a0Normally countries shift from agriculture to industry and then later to services, but India shifted directly from agriculture to services. What are the reasons for the huge growth of services vis-a-vis the industry in the country? Can India become a developed country without a strong industrial base?\u00a0<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n<p><strong>Source: <\/strong><a href=\"https:\/\/indianexpress.com\/article\/opinion\/columns\/interim-budget-2024-historically-growth-spurts-india-sprints-not-marathons-needs-change-9136836\/\"><strong>IE<\/strong><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In navigating the complexities of economic resilience, fiscal strategies emerge as crucial pillars for stability and growth. <\/p>\n","protected":false},"author":17,"featured_media":24973,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_eb_attr":"","om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"_lmt_disableupdate":"","_lmt_disable":"","footnotes":""},"categories":[352],"tags":[161,169,1659,140],"class_list":["post-24960","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-editorial-analysis","tag-daily-current-affairs-upsc","tag-daily-editorial-analysis","tag-fiscal-strategies","tag-upsc_preparation_strategy"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/24960","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/users\/17"}],"replies":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/comments?post=24960"}],"version-history":[{"count":1,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/24960\/revisions"}],"predecessor-version":[{"id":24975,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/24960\/revisions\/24975"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/media\/24973"}],"wp:attachment":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/media?parent=24960"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/categories?post=24960"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/tags?post=24960"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}