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Economic survey related doubt

What is Fiscal democracy? Why we may have achieved Political democracy but not Fiscal democracy? Could someone please answer?
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Comments

  • Fiscal democracy is freedom of the elected government to spend and tax so as to best serve the people at present instead of being tied down by expenditure of previous govt. It is achieved when a govt. can spend on he present day priorities instead of last ones. Ex - climate change is today's priority.

    There is a huge gap between India's political and fiscal democracy. As India has achieved political democracy evident from its various institution and organs of democracy that are healthy and performing under checks and balance. Indian political democracy is mature as it has Universal adult franchise and everyone has the right to contest elections.
    On the other hand Fiscal democracy still seems like a distant dream because:
    1. India has a history of populist schemes and cost of financing increases with time.
    2. Paying taxes is seen as burden rather than duty. Therefore govt. resort to low taxes to get elected. it is evident from the fact that 7/100 voters pay tax. and lo tax to GDP ratio of 17%.
    3. This leads to higher borrowing by the govt. which results in high fiscal deficit. Leaving higher burden on the future generation and cripples fiscal democracy for future govt.

    FRMB Act was brought to keep the expenditures and revenues of govt. in balance by setting up the limit of fiscal deficit to 3% of GDP. N K Singh Committee provided more elbow room to govt. by recommending fiscal deficit range instead of fixed figure. But more needs to be done in to challenge rising inequality, increasing tax base and more responsible citizenry.
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  • ankit5927 said:

    Fiscal democracy is freedom of the elected government to spend and tax so as to best serve the people at present instead of being tied down by expenditure of previous govt. It is achieved when a govt. can spend on he present day priorities instead of last ones. Ex - climate change is today's priority.

    There is a huge gap between India's political and fiscal democracy. As India has achieved political democracy evident from its various institution and organs of democracy that are healthy and performing under checks and balance. Indian political democracy is mature as it has Universal adult franchise and everyone has the right to contest elections.
    On the other hand Fiscal democracy still seems like a distant dream because:
    1. India has a history of populist schemes and cost of financing increases with time.
    2. Paying taxes is seen as burden rather than duty. Therefore govt. resort to low taxes to get elected. it is evident from the fact that 7/100 voters pay tax. and lo tax to GDP ratio of 17%.
    3. This leads to higher borrowing by the govt. which results in high fiscal deficit. Leaving higher burden on the future generation and cripples fiscal democracy for future govt.

    FRMB Act was brought to keep the expenditures and revenues of govt. in balance by setting up the limit of fiscal deficit to 3% of GDP. N K Singh Committee provided more elbow room to govt. by recommending fiscal deficit range instead of fixed figure. But more needs to be done in to challenge rising inequality, increasing tax base and more responsible citizenry.

    Well Explained..... :smiley:
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