Public Administration Mains 2017 : Model Question and Answer - 25
Public Administration Mains 2017 : Model Question and Answer
(Public Administration Paper II / Chapter: Financial Management)
(Current Based) Question : Good Economics and Bad Politics cannot coexist in a sound budgetary process." Discuss. (30 Marks/350 Words)
Model Answer :
The Government of the day has a vision at the beginning of the year to
play the role of a welfare state and by means of its budget allocate expenditure
to the various departments and simultaneously ensure adequate revenue so as to
not land in an undesirable deficit. Good Economics would aim high revenue which
can meet the expenditure of the State. Maintenance of fiscal deficit under 3% of
GDP, to meet its expenditure (FRBM Act 2004) and not incurring any form of
revenue deficit. Bad politics is one that can interfere in the process of
meeting these goals.
An example is when the UPA Government was trying to pass the Food Security
Ordinance it faced severe opposition from the parliamentarians on grounds of
increasing the fiscal deficit beyond the benchmark since it would lead to
expenditures over and above the budgeted amounts. Another example of bad
politics is where the ruling government routes the allocated money to meet their
personal aspirations and hence lead to high expenditures, yet not meeting the
developmental goals e.g. indulgence in Fodder Scam and embezzlement of close to
940 Crores. In a competitive political situation like in our country, the
opposition party would not leave such an event unnoticed and will ensure that
the responsible minister gets due punishment.
Another example of a competitive political environment is in the United States
where the Republican party is at loggerheads with the Democrats for passing the
Affordable Care Act. Good Economics is applied here where the government
revenue/borrowings is being invested in ensuring a healthy human capital that
can contribute towards the development of the country. However the ideological
differences in political factions led to non approval of budgetary expenditure
from the Senate. This brought a stop to all budgeted government activities in
the United States and 8,00,000 employees remained unemployed for over 2 weeks.
The objectives of good economics can be sanctified with an equally stable
political environment which can ratify the budgetary process and ensure its
effective execution. (Total Words- 333)
(Good Economics and Bad Politics, Bad Politics and Revenue Deficit, Good Economics and Competitive Political Situation)