Top 10 Must Read Topics for IAS Mains GS Paper 2 | India’s Political and Fiscal Democracy

Top 10 Must Read Topics for IAS Mains GS Paper 2 | India's Political and Fiscal Democracy

Top 10 Must Read Topics for IAS Mains GS Paper 2: The Union Public Service Commission (UPSC) will conduct Civil Services Mains Examination in the upcoming days. IAS Mains exam consists a total of 9 papers, out of which, GS Paper 2 aims to access a student on the basis of his understanding of Governance, Constitution, Polity, Social Justice and International relations.

The problem is that no matter how good & knowledgeable we think we are or how good we feel we have prepared for the exam there is always a certain level of uncertainty. To overcome this fear, we are sharing Top 10 Must Read Topics for IAS Mains GS Paper 2.


Top 10 Must Read Topics for IAS Mains GS Paper 2 | Topic no.9

Following the chain, we are now going to discuss Topic no. IX. Let us now go through some important pointers which will help us to understand the said topic in a better way.

Fiscal democracy
Fiscal democracy refers to the freedom available to the government to spend and tax. It is linked with the political democracy, which refers to the freedom of individuals to elect their rulers and question as well as discard them if they don’t serve the purpose.

Is there a Gap Between India’s Political and Fiscal Democracy?

  • Yes, the recent Economic Survey has highlighted this. For instance, it shows that in Norway, for every 100 voters, there are 100 taxpayers. In India for every 100 voters, there have been only seven taxpayers.
  • The minimum threshold below which no income tax is paid is Rs 2.5 lakh. This is 250% of India’s per capita gross domestic product (GDP). That makes India one of the most generous exemptors in the world.
  • In most countries, income tax becomes payable when your income is about one-half or one-fourth of the average income in your country. Indeed, in Russia, you pay income tax from the very first rouble that you earn.
  • This tax-paying class is so insistent and politically active that the exemption slabs keep creeping up every year.

India achieved political democracy by Universal adult assent, Fundamental rights, and Independent judiciary but there is lack of fiscal democracy as seen in the following:

  • Shortage of fiscal jurisprudence: Government utilizes public funds for fulfilling short-term goals, populist measures etc and doesn’t go for capital asset building and long-term benefits.
  • Struggle between Centre and states over revenue share: Lack of devolution of funds at the lowest level like Panchayats.
  • Unused Fund: Funds allotted to various government departments for welfare remained unspent due to lax attitude of political leaders and officials.
  • Fiscal deficit: India always remained a fiscal deficit nation it shows the govt functions on borrowing which in turn reflects towards debts of the future generations.
  • Lack of proper financial inclusion: Populist measures such as lower taxes and more exemptions also lead to reduced revenues, hampering fiscal democracy.

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Expected Question: Is there a Gap Between India’s Political and Fiscal Democracy? Discuss.

Over here we conclude our article on Top 10 Must Read Topics for IAS Mains GS Paper 2. Stay tuned with us for the rest of the topic that we will discuss day by day. To excel in Civil Services Examination, download the Best IAS Exam Preparation App for free.

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