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PYQ 1200 Q/A Part - 1
PYQ 1200 Q/A Part - 2
PYQ 1200 Q/A Part - 3
PYQ 1200 Q/A Part - 4
PYQ 1200 Q/A Part - 5
Kerala PSC Indian Economy Book Study Materials Page 480
Book's First Page18.8 ndian onom (i) Loan Disbursals by the Government payment liabilities in the year also depends on the fact as to which years in the past the governments The loans forwarded by the government might be had other receipts and for what duration of internal (i.e., to the states, UTs, PSUs, FIs, etc.) or maturity periods. As for example, the PF liabilities external (i.e., to foreign countries, foreign banks, were not an item of such liabilities for almost first purchase of foreign bonds, loans to IMF and WB, three decades after Independence. But once the etc.). government employees started retiring, it went (ii) Loan Repayments by the Government on increasing. Future India (especially 1960s and 1970s) saw expansion of the PSUs and excessive Again loan payments might be internal as well as employment generation in them (devoid of the external. This consists of only the capital part of logic of labour requirement). We see the PF the loan repayment as the element of interest on liabilities expanding extensively throughout the loans are shown as a part of the revenue expenditure. 1990s—the governments had been under pressure (iii) Plan Expenditure of the Government to manage this segment either by cutting interest This consists of all the expenditures incurred by the on PF or at present trying to make it a matter of government to finance the planned development market economy. Same thing happened with the of India as well as the central government financial element of pension and we have been able to devise supports to the states for their plan requirements. a market mechanism for it once pension reforms (iv) Capital Expenditures on Defence by the took place and the arrival of a pension regulatory Government authority for the area. This consists of all kinds of capital expenses to cAPitAl Deficit maintain the defence forces, the equipment There is no such term in public finance or in purchased for them as well as the modernisation economics as such. But in practice one usually expenditures. It should be kept in mind that hears the use of the term capital crunch, scarcity defence is a non-plan expenditure which has capital of capital in day-to-day economic news items. as well as revenue expenditures in its maintenance. Basically, the government in the news is facing The revenue part of expenditure in the defence the problem of managing as much funds, money, is counted in the revenue expenditures by the capital as is required by it for public expenditure. government. Such expenditure might be of revenue kind or (v) General Services capital kind. Such difficulties have always been with the developing economies due to their high These also need huge capital expenditure by the level requirement of capital expenditures. Had government—the railways, postal department, there been a term to show this situation, it would water supply, education, rural extension, etc. naturally have been Capital Deficit. (vi) Other Liabilities of the Government Basically, this includes all the repayment liabilities fiscAl Deficit of the government on the items of the Other When balance of the government’s total Receipts. The level of liabilities depends on the receipts (i.e., revenue + capital reeipts) and total fact as to how much such receipts were made expenditures (i.e., revenue + capital expenditures) by the governments in the past. The amount of turns out to be negative, it shows the situation of