As political parties in various Indian states make pre-poll promises, concerns arise regarding their long-term fiscal impact. In Chhattisgarh, both major parties have proposed schemes that may strain state finances. These include cash transfers, subsidized services, and free education initiatives.
Prime Minister Modi’s extension of the free foodgrain distribution scheme, initially introduced as a pandemic relief measure, has now taken on a near-permanent status, leading to significant annual costs. This decision not only influences state elections but also sets a precedent for the upcoming Lok Sabha elections.
The rising trend of such promises indicates a departure from targeted fiscal spending. The challenge lies in balancing welfare support for low-income groups with the need for effective fiscal management. With India’s development needs and existing pressures on public finances, unchecked populism may jeopardize the country’s fiscal health.
India’s commitment to managing its fiscal deficit necessitates careful prioritization of expenditures. Elevating temporary relief measures to permanent entitlements can hinder fiscal consolidation efforts and exacerbate macroeconomic vulnerabilities. This trend of populism raises alarms about long-term fiscal sustainability.
Q1. What are the potential fiscal impacts of political promises in Chhattisgarh?
Answer: Political promises in Chhattisgarh, like cash transfers and free services, could strain state finances, affecting fiscal health and sustainability.
Q2. How do welfare schemes influence public finances in India?
Answer: Welfare schemes can provide immediate relief but may lead to increased fiscal pressure and challenges in maintaining budgetary discipline.
Q3. What is the significance of the free foodgrain scheme extension?
Answer: The extension transforms a temporary relief effort into a potential permanent cost, impacting fiscal policies and future government budgets.
Q4. Why is fiscal discipline important for India?
Answer: Fiscal discipline is crucial for sustainable economic growth, ensuring that public finances remain robust and can support developmental needs without excessive debt.
Q5. What challenges does populism pose to fiscal management?
Answer: Populism can lead to unsustainable fiscal policies by prioritizing short-term benefits over long-term economic stability, risking fiscal health.
Question 1: What is a potential consequence of political populism in India?
A) Improved fiscal health
B) Strained public finances
C) Increased foreign investment
D) Enhanced economic growth
Correct Answer: B
Question 2: Which scheme was extended by Prime Minister Modi as a permanent measure?
A) Direct cash transfer
B) Free foodgrain distribution
C) Free education initiative
D) Subsidized healthcare
Correct Answer: B
Question 3: What is essential for managing India's fiscal deficit?
A) Increased welfare programs
B) Careful prioritization of expenditure
C) Reducing taxes
D) Expanding government services
Correct Answer: B
Question 4: How can elevating temporary relief measures affect fiscal policy?
A) Improve fiscal health
B) Hinder fiscal consolidation efforts
C) Increase government revenue
D) Enhance economic stability
Correct Answer: B
Question 5: What does the trend of political promises indicate about fiscal management in India?
A) Improved financial stability
B) A shift towards targeted spending
C) A departure from fiscal discipline
D) Enhanced public accountability
Correct Answer: C
Question 6: What is a primary concern regarding welfare schemes in elections?
A) Reduction in public services
B) Risk of increasing fiscal pressure
C) Improvement in living standards
D) Decrease in government spending
Correct Answer: B
Question 7: Which of the following is a challenge posed by unchecked populism?
A) Sustainable fiscal policies
B) Long-term economic stability
C) Increased macroeconomic vulnerabilities
D) Enhanced public welfare
Correct Answer: C
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