{"id":47749,"date":"2025-05-02T07:11:14","date_gmt":"2025-05-02T07:11:14","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=47749"},"modified":"2025-05-02T07:11:15","modified_gmt":"2025-05-02T07:11:15","slug":"upsc-essay-pyq-2017-impact-of-the-new-economic-measures-on-fiscal-ties-between-the-union-and-states-in-india-domain","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/upsc-essay-pyq-2017-impact-of-the-new-economic-measures-on-fiscal-ties-between-the-union-and-states-in-india-domain\/","title":{"rendered":"UPSC Essay PYQ 2017: Impact of the new economic measures on fiscal ties between the union and states in India Domain"},"content":{"rendered":"\n<p>Explore the UPSC Essay PYQ 2017 on how new economic measures like GST impact fiscal ties between the Union and States in India.<\/p>\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-69d4c574ed0c7\" 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-69d4c574ed0c7\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/upsc-essay-pyq-2017-impact-of-the-new-economic-measures-on-fiscal-ties-between-the-union-and-states-in-india-domain\/#Essay_Key\" title=\"Essay Key\">Essay Key<\/a><\/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\/upsc-essay-pyq-2017-impact-of-the-new-economic-measures-on-fiscal-ties-between-the-union-and-states-in-india-domain\/#Key_Arguments\" title=\"Key Arguments\">Key Arguments<\/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\/upsc-essay-pyq-2017-impact-of-the-new-economic-measures-on-fiscal-ties-between-the-union-and-states-in-india-domain\/#Case_StudiesExamples\" title=\"Case Studies\/Examples\">Case Studies\/Examples<\/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\/upsc-essay-pyq-2017-impact-of-the-new-economic-measures-on-fiscal-ties-between-the-union-and-states-in-india-domain\/#Additional_Tips\" title=\"Additional Tips\">Additional Tips<\/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\/upsc-essay-pyq-2017-impact-of-the-new-economic-measures-on-fiscal-ties-between-the-union-and-states-in-india-domain\/#Join_our_Essay_Course_%E2%80%93_Click_Here\" title=\"Join our Essay Course &#8211; Click Here\">Join our Essay Course &#8211; Click Here<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Essay_Key\"><\/span><strong>Essay Key<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"pcrstb-wrap\"><table class=\"has-fixed-layout\"><thead><tr><th>Component<\/th><th>Details<\/th><\/tr><\/thead><tbody><tr><td><strong>Essay Topic<\/strong><\/td><td>Impact of the new economic measures on fiscal ties between the union and states in India Domain<\/td><\/tr><tr><td><strong>Paraphrase<\/strong><\/td><td>This essay explores how recent economic policies affect the financial relationship and revenue-sharing arrangements between the central government and state administrations in India.<\/td><\/tr><tr><td><strong>Intent of the Essay<\/strong><\/td><td>Analyze the impact of recent economic policies on fiscal ties between the Union and States in India with insights from UPSC Essay PYQ 2017.<\/td><\/tr><tr><td><strong>Keywords<\/strong><\/td><td>Fiscal Federalism, GST, Devolution, Financial Aid, Economic Policy<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Key_Arguments\"><\/span><strong>Key Arguments<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><strong>GST Introduction and Its Fiscal Effects<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The implementation of the Goods and Services Tax (GST) restructured the tax system, altering fiscal relations between the Union and states.<\/li>\n\n\n\n<li>States agreed to relinquish significant taxation powers to the central government, reducing their revenue autonomy.<\/li>\n\n\n\n<li>For instance, states&#8217; share in GST revenue is fixed at 14% of CGST, which may not sufficiently address revenue shortages.<\/li>\n<\/ul>\n\n\n\n<p><strong>Increased Dependence on the Union<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Post-GST, many states have become heavily reliant on central grants and fiscal transfers to meet their financial needs, as their own tax revenue has decreased.<\/li>\n\n\n\n<li>This dependency undermines financial autonomy, affecting the dynamics of federalism in India.<\/li>\n\n\n\n<li>For example, states&#8217; self-generated revenue may drop by 10-15% due to the centralized nature of GST.<\/li>\n<\/ul>\n\n\n\n<p><strong>Enhanced Role of the Finance Commission<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The 15th Finance Commission focuses on resource devolution, fiscal consolidation, and debt sustainability.<\/li>\n\n\n\n<li>While it acknowledges the fiscal needs of states, it also emphasizes the need for efficiency in planning and spending.<\/li>\n\n\n\n<li>Data shows that states failing to meet performance benchmarks may experience reduced central transfers.<\/li>\n<\/ul>\n\n\n\n<p><strong>Linking Central Schemes to Compliance<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Various central schemes have introduced strict compliance conditions, tying state funding to performance targets, thus limiting financial autonomy.<\/li>\n\n\n\n<li>States may be compelled to adapt to these requirements, reducing their discretion over local fiscal matters.<\/li>\n\n\n\n<li>For example, the compliance conditions of schemes like PM-KISAN can influence funding allocation and have political ramifications during elections.<\/li>\n<\/ul>\n\n\n\n<p><strong>Differences in State Responses<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>States have varied in their response to new economic measures, depending on their financial health, capacity to mobilize resources, and governance structures.<\/li>\n\n\n\n<li>States with strong administrative frameworks are better able to take advantage of these measures, leading to greater fiscal disparities between them.<\/li>\n\n\n\n<li>For instance, states like Maharashtra and Gujarat have been more successful in utilizing these measures compared to Bihar and Uttar Pradesh.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Case_StudiesExamples\"><\/span><strong>Case Studies\/Examples<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<figure class=\"wp-block-table\"><div class=\"pcrstb-wrap\"><table class=\"has-fixed-layout\"><thead><tr><th>Case Study<\/th><th>Key Insights<\/th><th>Relevance<\/th><\/tr><\/thead><tbody><tr><td>GST Revenue Impacts<\/td><td>Reduction in states&#8217; own tax revenues; reliance on compensation from the Center<\/td><td>Highlights the shift in fiscal federalism dynamics<\/td><\/tr><tr><td>Maharashtra\u2019s Growth Strategy<\/td><td>Leveraged GST revenues effectively for development projects<\/td><td>Demonstrates the potential benefits when states adapt successfully<\/td><\/tr><tr><td>Bihar\u2019s Fiscal Strain Post-GST<\/td><td>Increased dependency on central funds leading to budgetary stress<\/td><td>Exhibits challenges faced by states with weaker fiscal structures<\/td><\/tr><\/tbody><\/table><\/div><\/figure>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/edukemy.com\/upsc\/upsc-essay\" target=\"_blank\" rel=\" noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1024\" height=\"300\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2025\/03\/bannner-1600-x-1600-2400-x-1392-px-1280-x-300-px-1024x300.png\" alt=\"\" class=\"wp-image-47463\"\/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Additional_Tips\"><\/span><strong>Additional Tips<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Impact of Economic Policies<\/strong>: Assess how broader economic initiatives such as Aatmanirbhar Bharat and digital economy programs could influence fiscal relations between the Union and states.<\/li>\n\n\n\n<li><strong>Equity Concerns<\/strong>: Discuss how unequal distribution of resources across states may intensify inter-state disparities, leading to imbalances in fiscal arrangements and financial distribution.<\/li>\n\n\n\n<li><strong>Historical Context of Fiscal Relations<\/strong>: Analyze current fiscal arrangements in comparison to the pre-GST era to highlight how financial ties have evolved over time.<\/li>\n\n\n\n<li><strong>Policy Recommendations<\/strong>: Recommend measures to strengthen fiscal federalism, such as allowing states more freedom in generating revenue or reassessing the criteria for central transfers based on performance and specific needs.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Join_our_Essay_Course_%E2%80%93_Click_Here\"><\/span><strong>Join our Essay Course &#8211; <a href=\"https:\/\/edukemy.com\/upsc\/upsc-essay?utm_source=blog&amp;utm_medium=website\" target=\"_blank\" rel=\"noreferrer noopener\">Click Here<\/a><\/strong><span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Explore the UPSC Essay PYQ 2017 on how new economic measures like GST impact fiscal ties between the Union and States in India.<\/p>\n","protected":false},"author":25,"featured_media":0,"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":[3777],"tags":[229,3698,3788],"class_list":["post-47749","post","type-post","status-publish","format-standard","hentry","category-upsc-essay","tag-edukemy","tag-shabbir-sir","tag-upsc-essay-pyq-2017"],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/47749","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\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/comments?post=47749"}],"version-history":[{"count":1,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/47749\/revisions"}],"predecessor-version":[{"id":47750,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/posts\/47749\/revisions\/47750"}],"wp:attachment":[{"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/media?parent=47749"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/categories?post=47749"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/edukemy.com\/blog\/wp-json\/wp\/v2\/tags?post=47749"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}