28 March 2024 : PIB Summary for UPSC

Topic: GS2 – Indian Economy – Issues relating to mobilization of resources

UPSC candidates must understand India’s fiscal policy, borrowing plans, and financial instruments to tackle economic and governance questions effectively.

Pros:

● Stimulates Economic Growth: Government borrowing can inject funds into the economy, fuelling economic activities such as infrastructure projects, education, and healthcare, thereby stimulating growth.

●Crisis Management: During economic downturns or crises, borrowing allows governments to implement fiscal stimulus measures to mitigate the negative impacts, such as unemployment benefits or business support programs.

●  Investment in Future Productivity: Borrowing for investments in education and research can enhance human capital and innovation, leading to long-term economic productivity gains.

● Infrastructure Development: Borrowed funds can be allocated to infrastructure projects, improving transportation networks, communication systems, and utilities, which can boost productivity and competitiveness.

●Fiscal Flexibility: Borrowing provides governments with flexibility in managing their budgets, allowing them to smooth out revenue shortfalls over time rather than implementing immediate austerity measures.

Cons:

●  Debt Servicing Costs: Borrowing leads to interest payments on the debt, diverting funds away from other essential public services or investments, and potentially burdening future generations with debt.

●  Crowding Out Private Investment: High levels of government borrowing can lead to higher interest rates, crowding out private sector borrowing and investment, which may hinder economic growth in the long term.

●  Risk of Default: Excessive borrowing can lead to unsustainable debt levels, increasing the risk of default or financial crises, which can have severe repercussions on the economy and financial markets.

●  Inflationary Pressures: If borrowing leads to excessive money supply growth, it can fuel inflation, eroding the purchasing power of consumers and undermining economic stability.

●Dependency on Credit Markets: Reliance on borrowing exposes governments to fluctuations in credit markets, making them vulnerable to changes in investor confidence and interest rates.

Topic: GS2 – Indian Polity – Statutory Bodies

Relevant for UPSC as it concerns appointments to Lokpal, a crucial anti-corruption institution in India’s governance framework.

● The Lokpal of India, established by the Lokpal and Lokayuktas Act, 2013, serves as an anti-corruption ombudsman.

●  Comprising a Chairperson and a maximum of eight members, with at least 50% being judicial members, the Lokpal is appointed through a transparent process.

●  Its jurisdiction covers the Prime Minister, Ministers, Members of Parliament, government officials, and employees of government-controlled organizations.

●  Endowed with powers to inquire into corruption allegations against public officials, the Lokpal can recommend appropriate actions and initiate investigations based on complaints or suo motu.

● The Lokpal has its Investigation Wing for preliminary inquiries, with subsequent cases referred to investigative agencies for further action.

●  In addition to recommending criminal proceedings, the Lokpal can suggest preventive measures and systemic reforms to curb corruption in public administration.

●   Appeals against Lokpal decisions can be made to the Supreme Court.

● Challenges faced by the Lokpal include resource constraints and coordination issues with existing anti-corruption bodies.

●  Despite challenges, the Lokpal signifies a crucial step in combating corruption, fostering transparency, and ensuring accountability in governance.

PYQ: A national Lokpal, however strong it may be, cannot resolve the problems of immorality in public affairs’. Discuss.

(200 words/10m) (UPSC CSE (M) GS-2 2013)

Practice Question: In the context of the Lokpal of India, discuss its composition, jurisdiction, and powers. Highlight the significance of the Lokpal in addressing corruption and the challenges faced in its effective implementation.

(250 Words /15 marks)