Consider the following statements:
- 1. Tax revenue as a percent of GDP of India has steadily increased in the last decade.
- 2. Fiscal deficit as a percent of GDP of India has steadily increased in the last decade.
Which of the statements given above is/are correct ?
1 only
2 only
Both 1 and 2
Neither 1 nor 2
Answer is Wrong!
Answer is Right!
This question was previously asked in
UPSC IAS – 2017
1. Tax revenue as a percent of GDP: India’s tax-to-GDP ratio has historically fluctuated based on economic cycles, policy changes (like tax reforms), and collection efficiency. While there have been efforts to increase it, it did not show a *steady* increase over a full decade; there were ups and downs, including a dip after the 2008 global financial crisis.
2. Fiscal deficit as a percent of GDP: Governments aim to manage and often reduce the fiscal deficit as a percentage of GDP for macroeconomic stability. While stimulus measures or economic slowdowns can lead to temporary increases, a *steady* increase over a decade is not a typical pattern or policy goal and generally has not happened in the Indian context; it fluctuates based on budgetary policies and economic conditions.