Economics and Social Development

GST: Features, benefits, and challenges

Introduction to GST

  1. Goods and Services Tax (GST) is a comprehensive indirect tax implemented in India from July 1, 2017.
  2. It replaced multiple indirect taxes like VAT, Service Tax, Excise Duty, and others.
  3. GST is governed by the GST Council, which includes representatives from the Central and State governments.

Features of GST

  1. It is a destination-based tax levied at the point of consumption.
  2. Divided into three categories: CGST (Ce

Types of taxes: Direct and indirect

Introduction to Taxation

  1. Taxation is a primary source of revenue for the government, used to fund public services and development projects.
  2. In India, taxes are categorized into direct and indirect taxes based on their nature and method of collection.
  3. Taxation policies are framed by the Central and State Governments.

Direct Taxes

  1. Direct taxes are levied directly on the income or wealth of individuals or organizations.
  2. Examples inc

FRBM Act: Objectives and challenges

Introduction

  1. The FRBM Act was enacted in 2003 to ensure fiscal discipline and long-term financial stability in India.
  2. It aims to reduce the fiscal deficit, control public debt, and promote transparency in fiscal operations.
  3. Applies to both the Central and State Governments.

Objectives of the FRBM Act

  1. Ensure macroeconomic stability by reducing fiscal deficits and public debt.
  2. Promote fiscal discipline in government expenditure.
  3. Improve

Types of deficits: Fiscal, revenue, primary

Introduction

  1. A deficit occurs when a government's expenditure exceeds its revenue.
  2. There are three key types of deficits in public finance: Fiscal Deficit, Revenue Deficit, and Primary Deficit.
  3. Deficits indicate the financial health of a government and its reliance on borrowing.

Fiscal Deficit

  1. Fiscal Deficit is the difference between the government's total expenditure and its total revenue receipts (excl

Structure: Revenue and capital budgets

Introduction

  1. The Government Budget is a statement of estimated receipts and expenditures of the government over a financial year.
  2. It is divided into two main components: the Revenue Budget and the Capital Budget.
  3. The classification helps in understanding the sources of funds and the purpose of expenditures.

Revenue Budget

  1. The Revenue Budget deals with the government’s current receipts and current expenditures.
  2. Revenue Rec

Inflation targeting and price stability

Introduction

  1. Monetary Policy is the process by which a central bank, such as the Reserve Bank of India (RBI), controls the supply of money and credit in the economy.
  2. The main objectives of monetary policy are to ensure price stability, control inflation, promote economic growth, and maintain employment levels.
  3. Key tools of monetary policy include Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Repo Rate, and Reverse Repo Rate.

Objectives

Objectives and tools: CRR, SLR, Repo Rate, Reverse Repo Rate

Introduction

  1. Monetary Policy is the process by which a central bank, such as the Reserve Bank of India (RBI), controls the supply of money and credit in the economy.
  2. The main objectives of monetary policy are to ensure price stability, control inflation, promote economic growth, and maintain employment levels.
  3. Key tools of monetary policy include Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Repo Rate, and Reverse Repo Rate.

Objectives

Microfinance and SHGs

Introduction

  1. Microfinance refers to providing financial services such as credit, savings, and insurance to low-income individuals or groups who lack access to traditional banking systems.
  2. Self-Help Groups (SHGs) are small, informal groups of people who come together to address financial needs through collective savings and mutual lending.
  3. Both play a crucial role in financial inclusion and empowering marginalized communities, especially in rural areas.

Key Features of Microfinance

Digital payment systems (UPI, BHIM)

Introduction to Digital Payment Systems

  1. Digital payment systems are methods of transferring money electronically without physical exchange of cash or cheques.
  2. They are critical to achieving financial inclusion and reducing dependency on cash transactions.
  3. In India, key initiatives like Unified Payments Interface (UPI) and Bharat Interface for Money (BHIM) have revolutionized digital payments.

Unified Payments Interface (UPI)

  1. UPI is a real-time payment sy

Jan Dhan Yojana

Introduction to Jan Dhan Yojana

  1. The Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched on August 28, 2014, by the Government of India.
  2. It aims to provide universal access to banking facilities and promote financial inclusion for all sections of society.
  3. Described as the world's largest financial inclusion initiative.

Objectives of Jan Dhan Yojana

  1. Provide access to basic banking services such as savings accounts, deposits, and withdrawal
Economics and Social Development