Question 2GS3GS3
The Reserve Bank of India's surplus transfers offer the government much-needed fiscal space, yet they are not without challenges. Critically examine the implications of the RBI's surplus transfers to the government. (Answer in 150 words)
Introduction
RBI transfers its surplus transfers and funds to government of India, ensuring fiscal development and reduction of government debt.
19 words
Main Body
RBI transfers its surplus transfers and funds to government of India, ensuring fiscal development and reduction of government debt. Benefits/Positive: - Provide for social welfare policies to RIMARU classes Utility Scheme co-operation: - Reduce loss to PSUs Challenges faced: (1) Issue of contention - with government and RBI at loggerhead over principles of transfers (2) Reduce RBI profit - who has followed fiscal discipline to achieve this (3) Overdependence of government on RBI transfers, reducing motivation for promoting own funds (4) Dilution of Autonomy - of RBI, who is unable to decide an idlocation of profit Implications:Promote social welfare policies e for subsidiesReduce debt from international marketsHelp in fiscal healthhelp achieve targets of budget Yet, need is for better co-operation between: - forming standards and principles e - Suggestion of ujal Patel committee - Analyse liabilities and expenses of RBI before transfer - External audit of transfer, every 6 months Thus, need is to maintain fiscal discipline and not disinvest those who promote profit generation.
173 words1 paragraphs
Conclusion
Thus, need is to maintain fiscal discipline and not disinvest those who promote profit generation.
15 words
Topper
RAKHI
AIR 652025
Subject & Paper
GS3GS3
Topic
Economic Development
Mobilisation of Resources
RBI surplus transfers and fiscal implications
Writing Stats
207
Total words
1
Paragraphs
analytical
Tone