Day 19 Mains Questions – Ace Answer Writing Program

Question 1: Examine the evolution of gender budgeting in India. How effective has it been in promoting gender equality and what measures can enhance its impact? (10 Marks, 150 words)

Introduction

Gender budgeting, introduced in India in 2005-06, aims to promote gender equality by ensuring budgetary allocations address the needs and issues of women and girls.

Body

Evolution of Gender Budgeting –

1. Introduction (2005-06): Integrated into the Union Budget to promote gender equity. Example: Establishment of the Gender Budgeting Cell in various ministries.
2. Expansion: Encompassed state governments and local bodies. Example: Kerala and Karnataka adopting gender budgeting practices.
3. Institutional Mechanisms: Creation of nodal agencies to oversee implementation. Example: Ministry of Women and Child Development.
4. Sectoral Allocations: Focus on sectors like health, education, and employment. Example: Allocation for women-specific schemes like Beti Bachao Beti Padhao.
5. Capacity Building: Training and workshops for government officials. Example: Gender budgeting workshops by the Ministry of Finance.

3. Effectiveness and Measures to Enhance Impact:

1. Positive Outcomes: Improved allocation for women-centric programs. Example: Increased funding for women’s healthcare services.
2. Challenges: Insufficient implementation at grassroots levels. Example: Limited impact in rural and backward regions.
3. Monitoring and Evaluation: Need for robust monitoring mechanisms. Example: Regular audits and impact assessments.
4. Awareness and Training: Enhance awareness and training among stakeholders. Example: Sensitization programs for government officials and local bodies.
5. Inclusion and Participation: Greater involvement of women in budgeting processes. Example: Community participation in local budgeting exercises.

Conclusion

Gender budgeting in India has made significant strides but requires strengthened implementation, monitoring, and community involvement to achieve its full potential in promoting gender equality.

Question 2: Critically analyse the impact of GST on India’s federal fiscal structure. How has it affected the fiscal autonomy of states and what measures can address the concerns? (10 Marks, 150 words)

Introduction

The Goods and Services Tax (GST), implemented in India on July 1, 2017, replaced multiple indirect taxes with a unified tax structure, significantly altering the federal fiscal relationship between the Centre and the states.

Body

Impact of GST on Federal Fiscal Structure –

1. Unified Tax System: Replaced state-specific taxes, leading to uniformity. Example: VAT, CST, and service tax subsumed.
2. Revenue Dependency: Increased states’ dependency on GST compensation from the Centre. Example: Compensation Cess mechanism.
3. Loss of Fiscal Autonomy: States lost power to independently levy taxes on goods and services. Example: Restrictions on imposing additional taxes on certain goods.
4. Revenue Shortfalls: Initial years saw states facing revenue shortfalls. Example: Delayed GST compensation payments.
5. Inter-state Trade: Boosted inter-state trade by removing tax barriers. Example: E-way bill system.

Measures to Address Concerns –

1. Timely Compensation: Ensure timely GST compensation to states. Example: Regular disbursement of Compensation Cess.
2. Revenue Assurance: Guarantee minimum revenue growth for states. Example: Fixed compensation growth rate.
3. Fiscal Autonomy: Allow states to levy certain local taxes. Example: Municipal levies for local development.
4. Strengthening GST Council: Enhance decision-making powers and dispute resolution mechanisms. Example: Independent tribunal for GST disputes.
5. Capacity Building: Train state officials for effective GST implementation. Example: Workshops and training programs.

Conclusion

GST has streamlined India’s tax structure, but addressing states’ fiscal autonomy concerns and ensuring timely compensation are crucial for a balanced federal fiscal framework. Strengthening cooperative federalism through the GST Council can further enhance the system.

Question 3: Evaluate the effectiveness of outcome-based budgeting in improving public expenditure efficiency in India. What challenges does it face and how can they be addressed? (15 Marks, 250 words)

Introduction

Outcome-based budgeting (OBB) focuses on linking public expenditure to the outcomes and impacts of government programs, aiming to improve efficiency and accountability in public spending.

Body

Effectiveness of Outcome-Based Budgeting –

1. Improved Accountability: Ensures that government departments are accountable for results. Example: Direct Benefit Transfer (DBT) schemes tracking outcomes for welfare programs.
2. Enhanced Transparency: Facilitates transparency in fund allocation and utilization. Example: Public dashboards showing progress on Swachh Bharat Mission.
3. Focused Spending: Aligns resources with measurable outcomes, improving allocation efficiency. Example: Targeted spending in health through the National Health Mission.
4. Performance Measurement: Establishes performance metrics and benchmarks. Example: Outcomes of educational programs monitored via learning outcome assessments.
5. Informed Decision-Making: Provides data-driven insights for policy adjustments. Example: MNREGA’s performance data influencing budgetary allocations.

Challenges Faced:

1. Data Limitations: Inadequate and unreliable data can hinder effective outcome measurement. Example: Lack of comprehensive data on rural employment impacts.
2. Capacity Constraints: Limited capacity of government personnel to implement and monitor OBB. Example: Training gaps in local governance bodies.
3. Resistance to Change: Bureaucratic resistance to adopting new budgeting practices. Example: Departments reluctant to shift from traditional input-based budgeting.
4. Coordination Issues: Need for inter-departmental coordination to achieve common outcomes. Example: Health and sanitation programs requiring joint efforts.
5. Complex Evaluation Mechanisms: Complexity in designing effective evaluation frameworks. Example: Difficulty in measuring long-term impacts of infrastructure projects.

4. Measures to Address Challenges:

1. Capacity Building: Invest in training and development for government staff. Example: Workshops on outcome-based budgeting techniques.
2. Improved Data Systems: Enhance data collection and management systems. Example: Integrated data platforms for real-time monitoring.
3. Change Management: Promote a culture of accountability and transparency. Example: Incentives for departments achieving outcome targets.
4. Strengthening Evaluation Frameworks: Develop robust frameworks for outcome measurement. Example: Third-party audits and impact assessments.
5. Policy Integration: Ensure policy coherence across sectors. Example: Integrated planning between health and education sectors.

Conclusion

Outcome-based budgeting can significantly improve public expenditure efficiency by ensuring accountability and transparency. Addressing the challenges through capacity building, data improvements, and robust evaluation frameworks is crucial for realizing its full potential.