More fiscal imprudence (Indian Express)

Mains Paper 4: Social Justice
Prelims level: NYAY
Mains level: Welfare schemes for vulnerable sections of the population by the Centre and States and the performance of these schemes

Context

• NYAY assured minimum income of Rs 72,000 per year to the poorest 20 per cent is yet another step that will lead India inexorably to bankruptcy sooner than later.
• NYAY (Nyuntam Aay Yojana) is expected to cost the exchequer a staggering Rs 3,50,000 crore each year, almost 2 per cent of the country’s GDP.

Background

• Over a five year period, this scheme will cost the exchequer at least Rs 17,50,000 crore.
• Will the amount of Rs 6,000 per month be in addition to other benefits that a person is entitled to under other Central or state government schemes?
• Do we have adequate and reliable data to identify the “poorest 20 per cent”?
• Is the entire funding to be done by the Centre?

What are the sources to pay Rs 3,50,000 crore each year?

• Sadly, India is already among the most heavily taxed nations.
• Our corporate taxes (at 35 per cent) are much higher than developed countries.
• Strong resentment against high GST cripple industrial growth and no scope for more  borrowings as it will vastly increase the fiscal deficit.
• The deleterious consequences of the Indian Bankruptcy Code is that lesser and lesser funds are now available for investments in industry, education, public health, defence and other essential services.
• The grant of free power and numerous farm subsidies has not resolved the agrarian crisis.
• Despite serious calamities like cyclones, loans were never waived in Bangladesh but were rescheduled.
• The NYAY scheme will lead to colossal corruption and misuse large-scale leakage.
• Mindless growth of welfare schemes that make India’s economic foundations increasingly weak.
• Manufacturing has slowed down and we do not have a competitive edge in any industrial or service vertical except software.

Online Coaching for UPSC PRE Exam

General Studies Pre. Cum Mains Study Materials

Prelims Questions:

Q.1) Recently Aelous satellite was launched with the objective of:
A. Human Settlement on Mars
B. Searching Ice Water on Europa
C. Tracking Global Winds
D. Study of Asteroids

Answer: C

Mains Questions:
Q.1) Mindless growth of welfare schemes that make India’s economic foundations increasingly weak. Comment.