Himachal Pradesh PUBLIC FINANCE and Fiscal Policy
In public finance we study the finances of the Government. Thus, public finance deals with the question how the Government raises its Resources to meet its ever-rising expenditure. As Dalton puts it, public finance is concerned with the income and expenditure of public authorities and with the adjustment of one to the other.
On the other hand, Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy. It is the sister strategy to Monetary Policy through which a central bank influences a nation’s Money-supply-2/”>Money Supply.
Generally following are the objectives of a fiscal policy in a developing economy:
- Full EMPLOYMENT
- Price stability
- Accelerating the rate of Economic Development
- Optimum allocation of resources
- Equitable distribution of income and wealth
- Economic stability
- Capital Formation and Growth
- Encouraging Investment
STATE INCOME AND PUBLIC FINANCE
According to quick estimates, the total State Domestic Product for the year 2015-16 is 96,289 crore against 89,095 crore in 2014-15 thereby registering a growth of 8.1 percent at constant prices.
As per the quick estimates the value of Gross State Domestic Product of the Pradesh at current prices which was estimated at1,04,177 crore for 2014-15(Provisional estimates) increased to 1,13,667 crore during 2015-16, registering an increase of about 9.1 percent. This increase is attributed to the agriculture & allied activities sector besides other sectors of the economy. The food grains production increased to 16.34 lakh MT in 2015-16 from 16.08 lakh MT in 2014-15 and also the production of apple increased to 7.77 lakh MT in 2015-16 from 6.25 lakh MT in 2014-15.
The growth of economy of Himachal Pradesh during the last three years:-
Year . Percent
2013-2014 7.1
2014-2015 7.5
2015-2016 8.1
Receipt and Expenditure of the State Government (% of GSDP)
Item 2013-14 2014-15 2015-16 2016-17
1.Revenue Receipts 16.58 17.13 21.57 21.09
5.Revenue Expenditure 18.31 18.99 21.79 21.47
6.Revenue Deficit/ surplus – 1.73 -1.87 -0.22 – 0.38
(Revenue Receipts- Revenue Expenditure)
7.Capital Receipts 4.87 12.72 4.23 4.90
8.Capital Expenditure 4.32 10.76 4.61 4.69
9.Total Expenditure 22.63 29.75 26.39 26.16
Plan expenditure 4.97 5.84 6.58 6.20
Non-plan expenditure 17.66 23.91 19.81 19.96
According to the budget estimates for the year 2016-17 the total revenue receipts were estimated at 26,270 crore as against 24,514 crore in 2015-16. The revenue receipts increased by 7.16 percent in 2016-17 over 2015-16. The State’s own taxes was estimated 16.78 percent more in 2016-17 as against 2015-16 .
The State’s non-tax revenue (comprising mainly of interest receipts, power receipts,road transport receipts and otheradministrative service etc.) was estimated at 1,668 crore in 2016-17. The State’s non taxrevenue was 6.35 percent of totalrevenue receipts in 2016-17.
The share of central taxes is estimated at 4,334 crore in 2016-17.
Sectoral Contribution
The sectoral analysis reveals that during 2015-16, the Percentage contribution of Primary Sector to total GSDP of the State is 14.90 percent ,Secondary Sector 41.14 percent,Transport, Communications and Trade12.09 percent and Finance and Real Estate 15.88 percent, Community andPersonal Services is 16.00 percent.
State economy witnessed significant changes during the decade.The share of agriculture including Horticulture-2/”>Horticulture and Animal Husbandry in GSDP had declined from 21.1 percent in 2000-01 to 9.4 percent in 2015-16,yet the agriculture sector continues to occupy a significant place in the state economy.
Secondary sector,which occupies the second important place in the state economy has witnessed a major improvement since1990-91. Its contribution increased from 26.5 percent in 1990-91 to 41.1 percentin 2015-16, reflecting healthy signs of industrialisation and modernisation in the State.
As per the advance estimates based on the economic performance of State upto December,2016, the rate of economic growth of State during 2016-17 is likely to be 6.8 percent. A brief analysis of the economic growth in Himachal Pradesh, however, reveals that the State has always tried to keep pace with the all-India growth rate.
The financial inclusion denotes delivery of financial services at an affordable cost to the vast section of the disadvantaged and low income group. For this purpose, a comprehensive Financial Inclusion Campaign- “Pradhan Mantri Jan Dhan Yojana” (PMJDY) launched through out the country on 28th August, 2014 to cover the excluded section of Society Yojana (PMJDY) launched through out the country on 28th August, 2014 to cover the excluded section of society. Banks have opened total 9,86,817 Basic Saving Bank Deposit Accounts (BSBDA) under the scheme.
RBI Roadmap 2013-16
In RBI Roadmap, total 18,948 villages with Population below2,000 are covered by banks through opening of Brick & Mortar branch andfixed location Business Correspondents agents (called BankMitra) outlets as of September,2016.
The financial targets under Annual Credit Plan 2016-17 was increased by 21 percent over the last plan outlay and fixed at 18,213.01crore. Under Annual Credit Plan 2016-17, Banks have disbursed afresh credit to the tune of 7,858.34crore upto half year ended September,2016 and achieved 43 percent of Annual commitment.,
Public finance is the study of how governments raise and spend money. It is a branch of economics that deals with the financial activities of the state. Public finance includes the study of government revenues, expenditures, and debt.
Public expenditure is the total amount of money that a government spends in a given year. It includes both current expenditure and capital expenditure. Current expenditure is the money that a government spends on things like salaries, pensions, and welfare payments. Capital expenditure is the money that a government spends on things like Infrastructure-2/”>INFRASTRUCTURE, such as roads and bridges.
Public revenue is the total amount of money that a government receives in a given year. It includes both tax revenue and non-tax revenue. Tax revenue is the money that a government collects from taxes, such as Income tax, sales tax, and property tax. Non-tax revenue is the money that a government collects from things like fees, fines, and interest.
Fiscal policy is the use of government spending and Taxation to influence the economy. The goal of fiscal policy is to promote economic growth, full employment, and price stability.
Fiscal Deficit is the difference between a government’s revenue and expenditure in a given year. A fiscal deficit occurs when a government spends more money than it receives in revenue.
Public Debt is the total amount of money that a government owes. It includes both short-term debt, such as Treasury Bills, and long-term debt, such as Bonds.
The Fiscal Responsibility and Budget Management Act (FRBM Act) is an Indian law that was enacted in 2003. The FRBM Act sets out the rules for fiscal management in India. The FRBM Act aims to ensure that the government’s finances are sustainable and that the government does not borrow too much money.
Fiscal Consolidation is the process of reducing a government’s fiscal deficit. Fiscal consolidation can be achieved through a combination of spending cuts and tax increases.
Fiscal transparency is the openness and accountability of a government’s fiscal policy. Fiscal transparency is important because it allows citizens to hold their government accountable for its spending and borrowing decisions.
In Himachal Pradesh, public finance is managed by the state government. The state government raises money through taxes, such as income tax, sales tax, and property tax. The state government also receives money from the central government in the form of grants and loans. The state government spends money on things like education, health, infrastructure, and social welfare.
The fiscal deficit in Himachal Pradesh has been increasing in recent years. In 2017-18, the fiscal deficit was 3.2% of the state’s gross domestic product (GDP). The state government has been trying to reduce the fiscal deficit by cutting spending and increasing revenue. However, the fiscal deficit is still a major concern for the state government.
The public debt in Himachal Pradesh is also a major concern. In 2017-18, the public debt was 25.6% of the state’s GDP. The state government has been trying to reduce the public debt by cutting spending and increasing revenue. However, the public debt is still a major concern for the state government.
The FRBM Act is in force in Himachal Pradesh. The FRBM Act sets out the rules for fiscal management in the state. The FRBM Act aims to ensure that the state government’s finances are sustainable and that the state government does not borrow too much money.
The state government of Himachal Pradesh has been trying to implement fiscal consolidation measures in recent years. However, the fiscal deficit and public debt are still major concerns for the state government. The state government needs to take further measures to reduce the fiscal deficit and public debt.
What is public finance?
Public finance is the study of the government’s revenues and expenditures. It includes the study of how the government raises money, how it spends money, and how it manages its debt.
What is fiscal policy?
Fiscal policy is the use of government spending and taxation to influence the economy. The government can use fiscal policy to stimulate the economy during a Recession or to slow down the economy during a period of high Inflation.
What are the different Types of Taxes?
There are many different types of taxes, but the most common are income taxes, sales taxes, and property taxes. Income taxes are taxes on the income that people earn from their jobs, investments, and other sources. Sales taxes are taxes on the goods and services that people buy. Property taxes are taxes on the value of the land and buildings that people own.
What are the different Types of government spending?
The government spends money on a variety of things, including education, healthcare, transportation, and defense. The government also spends money on social programs, such as Social Security and Medicare.
What is the budget deficit?
The budget deficit is the amount of money that the government spends in a year that is more than the amount of money that it takes in. The government borrows money to make up the difference.
What is the national debt?
The national debt is the total amount of money that the government owes. The national debt has been growing for many years, and it is now the largest it has ever been.
What are the causes of the national debt?
The national debt is caused by a number of factors, including the government’s spending habits, the wars that it has fought, and the economic recessions that it has experienced.
What are the consequences of the national debt?
The national debt can have a number of negative consequences, including higher interest rates, inflation, and a decrease in the value of the dollar.
What are the solutions to the national debt?
There are a number of solutions to the national debt, but the most difficult part is getting everyone to agree on what to do. Some possible solutions include cutting government spending, raising taxes, or selling off government assets.
What is the future of the national debt?
The future of the national debt is uncertain. It depends on a number of factors, including the government’s spending habits, the wars that it fights, and the economic recessions that it experiences.
The main source of revenue for the Himachal Pradesh government is:
(A) Income tax
(B) Sales tax
(C) Excise duty
(D) Central grantsThe main expenditure of the Himachal Pradesh government is on:
(A) Education
(B) Health
(C) Infrastructure
(D) All of the aboveThe fiscal deficit of Himachal Pradesh is:
(A) Increasing
(B) Decreasing
(C) Constant
(D) Not availableThe debt to GDP ratio of Himachal Pradesh is:
(A) High
(B) Low
(C) Average
(D) Not availableThe fiscal policy of Himachal Pradesh is:
(A) Expansionary
(B) Contractionary
(C) Neutral
(D) Not availableThe main objective of the fiscal policy of Himachal Pradesh is to:
(A) Increase economic growth
(B) Reduce inflation
(C) Reduce Unemployment
(D) All of the aboveThe main instruments of fiscal policy are:
(A) Taxes
(B) Expenditure
(C) Borrowing
(D) All of the aboveThe main challenges faced by the fiscal policy of Himachal Pradesh are:
(A) Declining revenue
(B) Increasing expenditure
(C) High debt
(D) All of the aboveThe main reforms proposed for the fiscal policy of Himachal Pradesh are:
(A) Increase in taxes
(B) Decrease in expenditure
(C) Increase in borrowing
(D) All of the aboveThe main impact of the fiscal policy of Himachal Pradesh is on:
(A) Economic growth
(B) Inflation
(C) Unemployment
(D) All of the above