States to play a critical role in next-generation reforms: CEA Anantha Nageswaran
States to play a critical role in next-generation reforms: CEA Anantha Nageswaran
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La Excellence IAS Academy | February 5, 2024 | Economic Development
Syllabus: GS-III
Subject: Economic Development
Topic: Fiscal Policy and Budgeting.
Important points from the Discussion (Mains)
- Consultation with states crucial for next-gen reforms in health, education, MSMEs, land, and labour.
- Sustainable, moderate growth is favoured over unsustainable high growth for economic stability.
Important Terms (Prelims):
| Counter-Cyclical Fiscal Policy:
· It adapts to economic cycles by adjusting taxation and government spending. · During recessions, it focuses on reducing taxes and increasing spending to stimulate demand and foster economic recovery. · In contrast, during economic booms, the policy aims to raise taxes and cut public expenditure to prevent overheating and curb inflation. · Allowing unchecked expansion during booms can lead to inflation and exacerbate debt crises. · The goal is to maintain stability and balance in the economy by countering the effects of both recessionary and expansionary phases. |
Source: The Hindu
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