Government Budgets and the Financial System · UPPCS (Uttar Pradesh)

What the official syllabus says

UPPCS Main Examination, General Studies III:
Components of Government Budgets and Financial System.

Two short phrases cover a large area: how a government budget is built and read, and how money, banks and markets work in India.

Annual Financial Statement (Article 112; Article 202 for the States); Demands for Grants (Article 113), Appropriation Bill (Article 114), supplementary grants (Article 115), vote on account (Article 116), Finance Bill
Consolidated Fund (Article 266), Contingency Fund (Article 267) and Public Account
Stages of the budget in Parliament: presentation, general discussion, departmental committees, voting on demands, appropriation and finance bills; the cut motions
Presentation on 1 February from 2017-18; merger of the Railway Budget with the Union Budget (2017); end of the plan and non-plan distinction
Fiscal Responsibility and Budget Management Act, 2003 and its targets

Revenue budget: tax revenue (direct and indirect) and non-tax revenue (interest, dividends, fees); revenue expenditure (interest, subsidies, salaries, pensions, grants)
Capital budget: capital receipts (borrowing, recovery of loans, disinvestment) and capital expenditure (assets, loans to States)
Deficits: revenue deficit, effective revenue deficit, fiscal deficit, primary deficit; ways of financing a deficit and their effects
Kinds of budgeting: performance, outcome, zero-based and gender budgeting (from 2005-06)
Taxes: progressive, proportional and regressive; the Goods and Services Tax (101st Amendment, 2016; in force from 1 July 2017), the GST Council (Article 279A)
Fiscal federalism: the Finance Commission (Article 280), vertical and horizontal devolution, grants
Public debt and its sustainability; off-budget borrowing

Functions of money; money supply measures (M0, M1, M3)
Reserve Bank of India (1935; nationalised 1949): functions as issuer of currency, banker to government, banker's bank, regulator
Monetary Policy Committee (2016 amendment to the RBI Act); flexible inflation targeting of 4% with a band of 2% on either side
Instruments: repo rate, reverse repo, standing deposit facility, cash reserve ratio, statutory liquidity ratio, open market operations, marginal standing facility
Inflation: causes, measures (Consumer Price Index, Wholesale Price Index), effects on growth and the poor

Structure: scheduled commercial banks, regional rural banks (1975), co-operative banks, small finance banks, payments banks, non-banking financial companies
Bank nationalisation (1969 and 1980), priority sector lending, lead bank scheme
Non-performing assets, twin balance sheet problem, recapitalisation, the Insolvency and Bankruptcy Code, 2016
Basel norms on capital adequacy; deposit insurance (DICGC)
Development finance institutions: NABARD, SIDBI, EXIM Bank, NaBFID

Money market: call money, treasury bills, commercial paper, certificates of deposit
Capital market: primary and secondary markets, stock exchanges, mutual funds; SEBI (statutory from 1992)
Insurance (IRDAI) and pensions (PFRDA; National Pension System)
Financial Stability and Development Council (2010)
Digital payments: National Payments Corporation of India, UPI, RuPay; financial literacy and consumer protection

General Studies VI: State budgets, public finance and fiscal policy, and tax and economic reforms in Uttar Pradesh.
General Studies II: the powers and conduct of business of Parliament and State legislatures, and the role of the Finance Commission in Centre-State financial relations.