← All questionsGS3 · 2019 · Economy & Infrastructure ·Public Expenditure Management after Liberalisation
QUESTION 12
GS3
15 marks

The public expenditure management is a challenge to the Government of India in the context of budget making during the post-liberalization period. Clarify it.

WRITE IN
11 min
250 words

What the examiner wants

Clarify why managing public spending has been difficult in budget making since 1991.

ClarifyAnswer exactly what the question asks.

Demand-wise check

  1. 1Pressures: committed expenditure (interest, salaries, pensions, subsidies), fiscal deficit limits (FRBM), low tax-GDP, populism≈50 words
  2. 2Issues: poor quality of spending, unspent funds, off-budget borrowing, centrally sponsored schemes overload≈50 words
  3. 3Reforms: outcome budgets, PFMS, expenditure management commission (2014), zero-based budgeting, rationalisation of schemes≈50 words
  4. 4Conclusion≈50 words

Open in about 30 words and close in about 30.

Answer plan

ContextChallengesReformsConclusion

Where marks usually go

  • Only defining PEM
  • No reform

Draw this

  • Pie of committed expenditure

Value addition

  • DataInterest payments take about a quarter of the Centre's revenue receipts.Union Budget documents
  • LawFRBM Act, 2003 (amended 2018) targets central debt at 40% of GDP.FRBM Act

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