19 November, 2021 - Daily Current Affairs Analysis & MCQs - The Daily News Simplified from The Hindu

  • Fiscal allocation: issues and solutions Indian economy
  • Issues and solution to urban slums Population related aspects
  • India's trade: composition and direction Indian economy
  • Question hour and President address Polity and governance
  • Question for the Day

Prelims Quiz


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    UPSC Current Affairs: Stimulating alliance | Page – 8     

    UPSC Syllabus: Mains: GS Paper II: Polity & Governance  

    Sub Theme:  Fiscal Federalism |UPSC    

    Role of public expenditure: 

    Social and Economic Overheads:

    Economic development is handicapped kin underdeveloped countries on account of the lack of the necessary infrastructure. Economic overheads like the roads and railways, irrigation and power projects are essential for speeding-up economic development. Social overheads like hospitals, schools, and colleges and technical institutions too are essential. Money for these things cannot come out of private sources. Public expenditure has to build up the economic and social overheads.

    Balanced Regional Growth

    It is considered desirable to bring about a balanced regional growth. Special attention has to be paid to the development of backward areas and underdeveloped regions. This requires huge amounts for which reliance has to be placed on public expenditure.

    Development of Agriculture and Industry:

    Economic development is regarded synonymous with industrial development but agricultural development provides the base and has to be given top priority. Government has to incur lot of expenditure in the agricultural sector, e.g., on irrigation and power, seed farms, fertilizer factories, warehouses, etc., and in the industrial sector by setting up public enterprises like the steel plants, heavy electrical, heavy engineering, machine-making factories, etc. All these enterprises are calculated to promote economic development.

    Exploitation and Development of Mineral Resources:

    Minerals provide a base for further economic development. The government has to undertake schemes of exploration and development of essential minerals, e.g., coal and oil. Public expenditure has to play its role here too.

    Subsidies and Grants:

    The Central Government gives grants to State governments and the State governments to local authorities to induce them to incur some desirable expenditure. Subsidies have also to be given to encourage the production of certain goods especially for export to earn much-needed foreign exchange.

    Issues with Public expenditure

    • Rising rate of interest
    • Crowd out private investment 
    • Substitution of leisure to work
    • tough to create balance between social and economic benefits
    • Public spending in not for profit
    • Reduces government’s ability to work on other sectors

    Status of Public expenditure in India

    • Government spent 13% higher than the budget estimate.
    • Revised estimates for receipts were 29% lower than budget estimates. 
    • Nominal GDP is expected to grow at of 14.4% (i.e., real growth plus inflation) in 2021-22.
    • Fiscal deficit is targeted at 6.8% of GDP in 2021-22, down from the revised estimate of 9.5% in 2020-21 
    • No changes in income tax rates for individuals and corporations.
    • This includes tax deduction upto Rs 1.5 lakh on interest on housing loan, and tax holiday for affordable housing projects, profits of startups, and investing capital gains in start-ups.
    • Sluggish export growth and sudden rise in oil and gold imports has impacted the budget limitations. 

    Solutions to issues of federal spending

    • Public spending council
    • Removing red tapism
    • Green clearance in states hands
    • Universal single window clearances
    • Cooperation and competitive federalism
    • Inter-Ministries coordination
    • Bottom up approach
    • Regional investment facilitation
    • Infrastructural growth


    UPSC Current Affairs: Missing an inclusionary vision for urban poor | Page – 09

    UPSC Syllabus: Mains GS – I – Social Issues 

    Sub Theme: Urbanisation  |UPSC    

    Issues with slum rehabilitation

    • Resettlement is very limited and haphazard
    • Alcohol and substance abuse
    • Not treated humanly
    • Criminalisation
    • Forced resettlement
    • No rented accommodations
    • No documentation of such settlers
    • Weak migration policy
    • Emergence of ghettos across towns
    • Lack of employment opportunitie

    Solutions to slum rehabilitatio

    • National slum rehabilitation policy
    • Rental units for temporary stay
    • Anti-encroachment drives
    • Long term Planning (Far sighted policy)
    • Delhi's slum rehabilitation policy (In-situ development)
    • Development in proximity to urban centres
    • Cost effective, comprehensive and long lasting development
    • formal recognition and expansion of welfare scheme
    • Data collection
    • Self employment near by


    UPSC Current Affairs: Indo – US trade sees strong rebound| Page – 14

    UPSC Syllabus: Prelims: Economy 

    Sub Theme: External trade  |UPSC    

    ∙ India’s merchandise exports in July were 34% higher than the pre-COVID levels of July2019, at $35.17 billion, but the trade deficit hit a three-month high as gold imports jumped 145.4% from the 2019 levels.  

    ∙ Imports rose from $41.8billion in June to $46.4 billion, 14.75% higher than pre-pandemic activity. But without factoring in oil and gems and jewellery brought in, imports actually shrank 0.17% over the same period.                         

    ∙ Total merchandise exports during the first four months of 2021-22 now stand at $130.6 billion, about22% higher than 2019. The government is confident of meeting the $400 billion target for the full year. Let us look into past trend and composition of India’s external trend.