Roadmap for Answer Writing 1. Introduction Define public debt: Explain what public debt is and its significance in the context of government finance. Briefly introduce the relevance of public debt in India. 2. Understanding Public Debt Components of Public Debt: Discuss the types of public ...
Model Answer Comparison of Powers: Lok Sabha vs. Rajya Sabha The powers of the Lok Sabha and Rajya Sabha, the two houses of the Indian Parliament, differ significantly in several key areas, reflecting their distinct roles within the legislative framework. 1. Collective Responsibility The Lok Sabha hRead more
Model Answer
Comparison of Powers: Lok Sabha vs. Rajya Sabha
The powers of the Lok Sabha and Rajya Sabha, the two houses of the Indian Parliament, differ significantly in several key areas, reflecting their distinct roles within the legislative framework.
1. Collective Responsibility
The Lok Sabha holds the exclusive power to remove the Council of Ministers through a no-confidence motion, as the Council is collectively responsible only to the Lok Sabha. In contrast, the Rajya Sabha can discuss and criticize government policies but cannot initiate a no-confidence motion against the Council of Ministers .
2. Money Bills
A Money Bill can only be introduced in the Lok Sabha, and the Rajya Sabha cannot amend or reject it. The Rajya Sabha must return the Money Bill to the Lok Sabha within 14 days, with or without recommendations. The Lok Sabha has the final say on these recommendations, and the Money Bill is considered passed once it is returned .
3. Financial Bills
While both houses can discuss financial bills, only the Lok Sabha can introduce them. However, both houses share equal powers regarding the passage of financial bills that do not solely pertain to Money Bills .
4. Voting Powers
The Lok Sabha has exclusive voting rights on demands for grants, while the Rajya Sabha can only discuss the budget. Additionally, a resolution to discontinue a national emergency can only be passed by the Lok Sabha .
5. Special Powers of Rajya Sabha
The Rajya Sabha possesses unique powers, such as:
- Authorizing Parliament to legislate on subjects in the State List.
- Initiating the creation of All India Services.
- Initiating the motion for the removal of the Vice-President .
Conclusion
Both the Lok Sabha and Rajya Sabha play crucial roles in the Indian legislative process, with the Lok Sabha having greater authority in financial matters and the Rajya Sabha serving as a revising chamber to protect state interests. This balance is essential for maintaining federal equilibrium in the country.
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Model Answer Definition of Public Debt Public debt refers to the total liabilities of the Union government that must be repaid from the Consolidated Fund of India. It can also encompass the overall liabilities of both central and state governments. The primary sources of public debt include dated goRead more
Model Answer
Definition of Public Debt
Public debt refers to the total liabilities of the Union government that must be repaid from the Consolidated Fund of India. It can also encompass the overall liabilities of both central and state governments. The primary sources of public debt include dated government securities (G-Secs), treasury bills, external assistance, and short-term borrowings.
Rising Public Debt in India
India’s public debt has been on an upward trajectory, increasing from 51.8% of GDP in 2011-2012 to 58.8% in 2020-2021, marking a 14-year high. This rising burden raises several concerns:
1. Mounting Interest Payments
As the government borrows more, it incurs significant interest payments, which become a crucial part of its expenditure. This can strain the budget and limit funding for essential services (Source: Economic Survey of India).
2. Risk of Sovereign Debt Crisis
With rising interest rates, refinancing existing debt becomes more costly. This could divert funds from public services, similar to situations seen in Europe, potentially leading to a sovereign debt crisis (Source: International Monetary Fund).
3. Inflationary Pressure
Increased government spending or tax cuts can lead to higher aggregate demand, resulting in demand-pull inflation, which can destabilize the economy.
4. Crowding Out Effect
Excessive public debt can lead to higher interest rates, reducing private investment and contracting GDP growth in the long run.
5. Burden on Future Generations
Current borrowing may transfer the financial burden to future generations, as the government may need to raise taxes later to repay debts.
6. Debt Sustainability Concerns
A rising primary deficit and unfavorable interest rate-growth differential could raise doubts about India’s debt sustainability.
Conclusion
In the context of India’s high-growth potential, the government must balance public debt to stimulate growth without compromising fiscal health. Finding this balance is crucial to maintaining low interest rates and ensuring economic stability (Source: Reserve Bank of India).
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