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Economic Planning

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Home/Indian Economy/Economic Planning/Page 3

Mains Answer Writing Latest Questions

Prakher Singh
  • 2
Prakher SinghBegginer
Asked: July 23, 2024In:
  • 2

Examine and evaluate the government’s efforts to support the application of innovation and technology in economic planning, including the creation of the National Data and Analytics Platform, the use of artificial intelligence and geospatial data, and their potential to improve ...

upsc: economic planning
  1. Eklavya Pandit
    Eklavya Pandit Begginer

    The government has undertaken several initiatives to promote the use of technology and innovation in economic planning and policymaking. One key development is the National Data and Analytics Platform (NDAP), which aims to provide a centralized repository and analytical capabilities for data from vaRead more

    The government has undertaken several initiatives to promote the use of technology and innovation in economic planning and policymaking. One key development is the National Data and Analytics Platform (NDAP), which aims to provide a centralized repository and analytical capabilities for data from various government sources.

    The NDAP is designed to facilitate evidence-based policymaking by making data more accessible and enabling advanced analytics. By consolidating data from different ministries and departments, the platform allows policymakers to gain a more comprehensive understanding of economic and social trends. This can support the development of policies that are better informed by the available data.

    Another notable initiative is the increased use of geospatial data and artificial intelligence (AI) in economic planning. Geospatial data, which provides detailed information on the location and characteristics of various economic and social phenomena, can be used to identify patterns, trends, and regional disparities. Integrating this data with AI-powered analytics can help policymakers make more informed decisions, such as targeted interventions in specific geographic areas or the identification of high-potential regions for investment and development.

    The potential benefits of these initiatives include:

    1. Improved data accessibility and quality: The NDAP can help overcome challenges related to data fragmentation, inconsistencies, and accessibility, which have historically hindered evidence-based policymaking.
    2. Enhanced analytical capabilities: The platform’s analytical tools and AI-powered techniques can enable more sophisticated and nuanced analysis of economic and social data, leading to deeper insights and more informed policy decisions.
    3. Targeted and responsive policymaking: The use of geospatial data and AI can help policymakers identify specific areas or populations that require targeted interventions, as well as monitor the effectiveness of implemented policies in near real-time.
    4. Increased transparency and accountability: By making data and analytical processes more accessible, these initiatives can promote greater transparency in policymaking and enhance public trust in the government’s decision-making.

    However, the success of these initiatives will depend on several factors, such as the quality and completeness of the data, the robustness of the analytical tools, the integration of these technologies across different government agencies, and the adoption of a culture of data-driven decision-making within the government.

    Additionally, it will be important to address concerns related to data privacy, security, and ethical use of AI, to ensure that these technologies are deployed in a responsible and equitable manner.

    Overall, the government’s efforts to leverage technology and innovation in economic planning and policymaking have the potential to significantly enhance evidence-based decision-making and ultimately lead to more effective and responsive policies that better address the needs of the country’s citizens.

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Team
  • 0
TeamSupreme
Asked: August 22, 2024In:
  • 0

Roadmap for Answer Writing 1. Introduction Objective: Introduce the Goods and Services Tax (GST) and its significance in India. Key Point: Emphasize the goal of creating a unified tax structure to improve ease of doing business and enhance compliance. 2. Indirect Taxes Subsided in ...

upsc: economic planning
  1. Team
    Team Supreme

    Model Answer Introduction The Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based indirect tax implemented in India on July 1, 2017. It aimed to unify the tax structure under a single regime, enhancing transparency and compliance while reducing the tax burden on consumersRead more

    Model Answer

    Introduction

    The Goods and Services Tax (GST) is a comprehensive, multi-stage, destination-based indirect tax implemented in India on July 1, 2017. It aimed to unify the tax structure under a single regime, enhancing transparency and compliance while reducing the tax burden on consumers.

    Indirect Taxes Subsided in GST

    GST has subsumed several indirect taxes previously levied by both the central and state governments:

    Central Level Taxes

    1. Central Excise Duty
    2. Additional Excise Duty
    3. Service Tax
    4. Countervailing Duty
    5. Special Additional Duty of Customs

    State Level Taxes

    1. State Value Added Tax (VAT)/Sales Tax
    2. Entertainment Tax (excluding those levied by local bodies)
    3. Central Sales Tax (levied by the Centre and collected by the States)
    4. Octroi and Entry Tax
    5. Purchase Tax
    6. Luxury Tax
    7. Taxes on Lottery, Betting, and Gambling

    Revenue Implications of GST Since July 2017

    The introduction of GST has had significant revenue implications:

    • Revenue Growth: After initial challenges, GST revenue collections increased from an average of ₹0.89 lakh crores in 2017-18 to ₹1.5 lakh crores in 2022-23.
    • Tax Base Expansion: The implementation of the e-way bill system has improved traceability in inter-state transactions, leading to an increase in registered businesses from 6.4 million under the old regime to 11.2 million under GST.
    • Reduction in Tax Evasion: GST’s destination-based nature has made tax evasion more difficult, enhancing transparency in transactions.
    • State Revenue Disparities: While overall GST collections have risen, state revenues have shown volatility, leading to concerns about the equitable distribution of tax revenues.
    • Compensation Issues: States are guaranteed compensation for revenue shortfalls for five years, but there are concerns about the sustainability of this arrangement as their taxation powers are curtailed.

    Conclusion

    GST represents a significant reform in India’s tax landscape, aiming to eliminate the cascading effect of taxes and streamline compliance. Despite challenges, it has the potential to drive economic growth and enhance employment generation in the long run.

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Ehsan
  • 0
Ehsan
Asked: July 21, 2024In: ,
  • 0

question
  1. Sahim Sha
    Sahim Sha Begginer

    The Indian economy faces several challenges that hinder its growth : Infrastructure Deficits: Poor infrastructure, including inadequate transport, logistics, and energy supply, impacts productivity and economic efficiency. Unemployment and Underemployment: High unemployment rates, particularly amongRead more

    The Indian economy faces several challenges that hinder its growth :

    1. Infrastructure Deficits: Poor infrastructure, including inadequate transport, logistics, and energy supply, impacts productivity and economic efficiency.
    2. Unemployment and Underemployment: High unemployment rates, particularly among youth and graduates, along with underemployment in various sectors, limit economic potential.
    3. Income Inequality: Significant disparity in income distribution affects social stability and limits overall consumption and growth.
    4. Corruption: Corruption at various levels affects governance and efficiency, discourages investment, and hampers development projects.
    5. Regulatory Challenges: Complex and often inconsistent regulations can stifle business growth and discourage foreign investment.
    6. Agricultural Distress: Issues in agriculture, such as low productivity, inadequate irrigation, and poor market access, impact rural incomes and economic stability.
    7. Fiscal Deficit: High fiscal deficits lead to increased borrowing costs and limit the government’s ability to invest in development projects.
    8. Education and Skill Gaps: The mismatch between educational outcomes and market needs results in a skills gap, affecting employability and productivity.

    Addressing these issues requires comprehensive policy reforms, better governance, and strategic investments.

    Hope it helps !

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Shraddha Bhat
  • 0
Shraddha BhatBegginer
Asked: August 22, 2024In:
  • 0

Roadmap for Answer Writing Introduction Purpose: Define potential GDP and its significance in evaluating economic performance. Context: Briefly introduce how potential GDP serves as a benchmark for actual economic output. Definition of Potential GDP Definition: Potential GDP is the maximum level of output or real ...

upsc: economic planning
  1. Team
    Best Answer
    Team Supreme

    Model Answer Introduction Potential GDP (Gross Domestic Product) refers to the maximum level of output an economy can sustain without triggering inflationary pressures. It reflects the productive capacity of an economy, influenced by factors like labor force size and skill level, capital stock, techRead more

    Model Answer

    Introduction

    Potential GDP (Gross Domestic Product) refers to the maximum level of output an economy can sustain without triggering inflationary pressures. It reflects the productive capacity of an economy, influenced by factors like labor force size and skill level, capital stock, technology, and natural resources. Understanding potential GDP helps gauge how well an economy is performing relative to its capabilities.

    Determinants of Potential GDP

    1. Labor Force:
      • A growing, well-educated, and skilled labor force enhances productivity and economic growth. Conversely, a declining or unskilled labor force constrains potential GDP.
      • Source: World Bank.
    2. Capital Stock:
      • Accumulation of physical capital (machinery, infrastructure) boosts productivity. Insufficient investment limits economic growth potential.
      • Source: Reserve Bank of India (RBI) reports.
    3. Technological Progress:
      • Innovations improve production efficiency, enhancing output capacity. Lack of technological advancement can hinder growth.
      • Source: National Institute of Transforming India (NITI Aayog).
    4. Natural Resources:
      • Abundant and accessible natural resources support economic growth. Scarcity can restrict potential GDP.
      • Source: Ministry of Mines, Government of India.
    5. Policy Environment:
      • Supportive government policies promote investment and innovation, while restrictive policies can limit growth potential.
      • Source: Economic Survey of India.

    Factors Inhibiting India from Realizing Its Potential GDP

    1. Lack of Infrastructure:
      • Inadequate transportation, energy shortages, and limited technology access hinder productivity and investment.
      • Source: Planning Commission of India.
    2. Regulatory Environment:
      • A complex regulatory framework and corruption impede economic growth and deter investment.
      • Source: Transparency International.
    3. Low Investment:
      • Low savings rates lead to insufficient capital accumulation, limiting growth.
      • Source: Economic Times.
    4. Agricultural Productivity:
      • Low productivity in agriculture due to outdated practices affects overall economic potential.
      • Source: Food and Agricultural Organization (FAO).
    5. Education, Health, and Skill Development:
      • Despite a favorable demographic dividend, inadequate education and skill mismatches hinder workforce effectiveness.
      • Source: National Skill Development Corporation (NSDC).

    Conclusion

    Potential GDP is shaped by diverse determinants. While estimating it poses challenges, recognizing the factors inhibiting India from reaching its potential GDP is crucial for informed economic policies. Addressing these constraints can significantly enhance India’s economic growth and overall societal well-being.

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Khushi
  • 0
KhushiBegginer
Asked: July 31, 2024In: ,
  • 0

  1. Bhoomi Sharma
    Bhoomi Sharma Begginer

    Børge Brende, the President of the World Economic Forum, recently praised India, foreseeing it as a future $10 trillion economy. With a GDP of $1.9 trillion, the nation's economy was reportedly the 10th largest a decade ago; now, it stands at $3.7 trillion, a considerable rise. By 2030, the Indian GRead more

    Børge Brende, the President of the World Economic Forum, recently praised India, foreseeing it as a future $10 trillion economy.
    With a GDP of $1.9 trillion, the nation’s economy was reportedly the 10th largest a decade ago; now, it stands at $3.7 trillion, a considerable rise. By 2030, the Indian GDP is expected to reach $7.3 trillion, and by 2035, it is expected to reach $10 trillion ( Center for Economics and Business Research).
    The Indian government has set an ambitious target of transforming India into a ‘developed country’ by 2047. However, not everyone is benefiting from this advancement, especially the marginalised, even as India’s economic standing continues to climb.
    With the richest 10% of the population controlling 77% of the nation’s wealth, India is among the most unequal countries in the world.

    Some of the measures to address this inequality-

    First, implementing progressive taxation eg 1% wealth tax on Indian billionaires is enough to fund the National Health Mission, India’s largest healthcare scheme.
    Second, foster inclusive governance by encouraging citizen participation, promoting transparency, and reducing corruption.
    Third, encourage private companies to invest in social sectors and support community development projects eg CSR.
    Fourth, building robust safety nets to cushion economic shocks eg , extending the coverage and benefits of employment guarantee schemes, both in rural and urban areas or Cash transfers to all women above the age of 20 years etc.
    Fifth, correcting labour market policies (Implementing policies that promote fair wages, workers’ rights, and job security).
    Sixth, promote gender equality in education, employment, and entrepreneurship to empower women economically and socially.
    Seventh, increase the reach of basic necessities eg, allocating 2%-3% of GDP to healthcare.
    Eighth, emphasizing the expansion of job opportunities and better wages. Investment in infrastructure including construction can create employment. Creating 7 to 8 million productive jobs per year.
    Ninth, embrace technological advancements, innovation and R&D to create new opportunities for all.
    Tenth, deepening democracy and decentralization can reduce inequalities. Resorting to fiscal federalism by reducing the inequalities between the Centre and States in finances.

    India has the potential to transition towards a more equitable society. As reducing income inequalities will ultimately help us achieving UN Sustainable Development Goal 10.

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AchuK
  • 1
AchuKBegginer
Asked: July 20, 2024In:
  • 1

  1. Vyshnavi Thotakura
    Vyshnavi Thotakura Begginer

    To determine how long it will take for India's GDP growth rate to surpass that of the United States', we need to consider the concept of relative growth rates and the compounding effect over time. Let's denote: - \( G_{India} \) as India's GDP growth rate (7% per year) - \( G_{US} \) as United StateRead more

    To determine how long it will take for India’s GDP growth rate to surpass that of the United States’, we need to consider the concept of relative growth rates and the compounding effect over time.

    Let’s denote:
    – \( G_{India} \) as India’s GDP growth rate (7% per year)
    – \( G_{US} \) as United States’ GDP growth rate (2% per year)
    – \( GDP_{India}(0) \) as India’s current GDP
    – \( GDP_{US}(0) \) as United States’ current GDP

    The condition we’re interested in is when India’s GDP (\( GDP_{India}(t) \)) overtakes United States’ GDP (\( GDP_{US}(t) \)).

    Using the formula for GDP growth compounded annually:

    \[ GDP_{India}(t) = GDP_{India}(0) \times (1 + G_{India})^t \]
    \[ GDP_{US}(t) = GDP_{US}(0) \times (1 + G_{US})^t \]

    We need to find \( t \) such that:

    \[ GDP_{India}(0) \times (1 + 0.07)^t > GDP_{US}(0) \times (1 + 0.02)^t \]

    Simplifying this inequality:

    \[ (1.07)^t > \frac{GDP_{US}(0)}{GDP_{India}(0)} \times (1.02)^t \]

    Taking the natural logarithm on both sides gives:

    \[ t \times \ln(1.07) > \ln\left( \frac{GDP_{US}(0)}{GDP_{India}(0)} \times (1.02)^t \right) \]

    Solving for \( t \):

    \[ t > \frac{\ln\left( \frac{GDP_{US}(0)}{GDP_{India}(0)} \times (1.02)^t \right)}{\ln(1.07)} \]

    This equation calculates the minimum number of years required for India’s GDP growth rate to surpass that of the United States’. The exact number of years will depend on the initial GDP values of both countries and the growth rates specified.

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