1 – Fiscal Deficit:

GS III Topic Indian Economy

The definition of a fiscal deficit is:

The fiscal deficit is the difference between all of the government’s expenditures and all of its receipts (excluding borrowing). A fiscal imbalance occurs when this expense outweighs the money received.

When a government’s overall spending exceeds its revenue, there is a fiscal deficit (excluding money from borrowings).

The deficit is not the same as the debt, which is an accumulation of annual deficits.

The fiscal deficit is a sign of how the government manages its finances.

An ongoing large budget deficit indicates excessive government spending.

The fiscal deficit is prevalent in almost every economy, whereas the budgetary surplus is relatively rare. If the money is used to construct infrastructure, such as roads, airports, and other things that will eventually bring in money, the enormous budget deficit is not always a negative thing.

Governments (at the national and sub-national levels) employ fiscal consolidation programmes to lower their deficits and debt accumulation.

How the fiscal deficit is covered:

Two sources are used to pay for the budgetary deficit. They are the following:

obtaining loans from a commercial bank or other sources like the IMF, other governments, etc.

Creating new money through deficit financing entails borrowing funds from the RBI in exchange for its securities (so, RBI prints new currency).

Since borrowing is used to cover the fiscal deficit, it may be claimed that a government’s entire borrowing requirements for a year are equal to the fiscal deficit for that year.

India’s fiscal policy framework:

Important information regarding India’s fiscal policy strategy includes the following:

A Finance Commission (FC) must be constituted every five years, under the Indian Constitution.

In light of the fact that the states’ taxation authority may not always be adequate in relation to their spending responsibilities, this will serve as the basis for transferring a portion of the center’s income to the state governments and give medium-term fiscal guidance.

The Union Budget, which the government must submit to the Parliament for approval and discussion of its proposed taxing and spending initiatives, is another aspect of fiscal policy.

The Fiscal Responsibility and Budget Management Act (FRBM) 2003 is a statute that addresses economic constraint.

2 – Forex Reserve:

GS III Topic Indian Economy

Foreign exchange reserves:

A central bank may hold assets in foreign currencies as reserves, such as bonds, treasury bills, and other government securities.

It should be emphasised that the majority of foreign exchange reserves are held in US dollars.

Currency reserves in India include:

foreign currency holdings

gold reserves.

With the International Monetary Fund serving as reserves, unique drawing rights (IMF).

Objectives for Maintaining Foreign Exchange Reserves:

Fostering and maintaining confidence in monetary and exchange rate management strategies.

Permits taking action to protect the national or union currency.

Reduces external vulnerability by maintaining foreign currency liquidity to absorb shocks during times of crisis or when access to borrowing is restricted.

The significance of increasing foreign reserves:

The government and the RBI are in a good position as they manage the nation’s external and domestic financial challenges thanks to rising foreign reserves.

Crisis management serves as a safety net in the event of a balance-of-payments (BoP) crisis in the economy.

The rupee has appreciated versus the dollar as a result of increasing reserves.

Market Confidence: Reserves will provide some reassurance to markets and investors that a government can uphold its international commitments.

3 – National Commission for Women:

GS II Topic Statutory and Non-Statutory Bodies

What are the origins and goals of NCW?

Background:

The Committee on the Status of Women in India (CSWI) proposed establishing an NCW nearly 50 years ago to perform oversight responsibilities, facilitate the resolution of disputes, and speed the socioeconomic advancement of women.

Numerous committees, commissions, and programmes, notably the National Perspective Plan for Women, have recommended the establishment of an apex body for women (1988-2000).

In accordance with the National Commission for Women Act of 1990, the NCW became a statutory body in January 1992.

The First Commission was created on January 31, 1992, with Mrs. Jayanti Patnaik acting as chair.

The commission consists of a chairperson, a member secretary, and five other members. The NCW’s chairperson is chosen by the central government.

Mission and Objectives:

By means of appropriate policy creation, legislative action, etc., it aims to protect women’s legal rights and entitlements, enabling them to achieve equality and equitable participation in all spheres of life.

Its responsibilities include investigating the constitutional and legal safeguards for women.

Recommend adopting corrective legislation.

aid in getting grievances resolved.

Advice should be given to the government on all matters of policy that affect women.

It has received several complaints, and in a number of situations, it has acted independently to bring about speedy justice.

Why is it important to enlarge the NCW’s remit?

The relationship between women’s skills and the development of the country has been made clear by the Atmanirbhar Bharat (self-sufficient India) campaign.

Women make up over 70% of Pradhan Mantri MUDRA Yojana grantees, which makes this transition clear.

The number of women’s self-help groups nationwide has risen during the last six to seven years.

Similar to this, there is at least one woman director in 45% of the more than 60 000 new enterprises that have emerged since 2016.

Old Social Thinking: The advancement of the textile and dairy sectors has been aided by the skills and influence of women.

India must promote female entrepreneurs because the country’s economy is dependent on Micro, Small, and Medium Enterprises.

However, traditionalists assume that women’s tasks are restricted to domestic duties.

The NCW reports that there has been a 46% increase in complaints of crimes against women in the first eight months of 2021 compared to the same period the previous year.

Among the crimes that harm women are domestic violence, dowry harassment, sexual harassment at work, attempted rape, and cybercrimes.

4 – Pradhan Mantri Garib Kalyan Anna Yojna:

GS II Topic Government Schemes and Interventions

About:

The PMGKAY initiative, part of the Pradhan Mantri Garib Kalyan Package (PMGKP), supports the disadvantaged in their fight against COVID-19.

The initiative aimed to provide an additional 5 kg of free grains (rice or wheat) to each person covered by the National Food Security Act of 2013 on top of the 5 kg of subsidised foodgrain that was being distributed under the Public Distribution System (PDS).

80 lakh ration card holders would be impacted over the course of three months, according to an earlier announcement (April, May, and June 2020). Later, the cutoff date was extended to September 2022.

Its nodal Ministry is the Ministry of Finance.

By transferring their benefits to any of the roughly 5 lakh ration shops throughout the nation, any migrant worker or ONORC programme recipient may benefit from the free ration.

Cost: PMGKAY will have a total cost of Rs. 3.91 lakh crore for all stages.

Challenges: The most recent census is used to identify who is eligible under the National Food Security Act (2011). Since that time, there are now more people who lack access to food.

Issues:

Costly: The cost of maintaining it makes it more desirable for there to be an abundant supply of affordable grains. India was compelled to impose export limitations on wheat and rice as a result of a poor harvest in 2022 that put additional pressure on food prices and rattled the global agricultural markets due to unpredictably bad weather.

Increasing the budget deficit could make it more difficult for the government to reach its target of keeping it at 6.4% of GDP.

Inflation: The programme decision may have an effect on inflation. Rice and wheat prices are rising as a result of lower production driven on by a heatwave and a sporadic monsoon. About 10% of India’s retail inflation can be attributed to these two goods.