Public Finance, Fiscal Policy, Tax Reforms and One District One Product

What the official syllabus says

UPPCS Main Examination, General Studies VI.

Public Finance and Fiscal Policy, Tax and Economic Reforms, One District One Product Policy of UP Government.

Topics in detail

This line joins three subjects: the state's public finance and fiscal policy, its tax and economic reforms, and the One District One Product (ODOP) policy. The first two are concepts applied to UP; the third is a flagship state policy that is studied with district examples.

Public finance and fiscal policy

• Meaning of public finance: public revenue, public expenditure, public debt and fiscal administration
• Objectives of fiscal policy at state level: growth, welfare, regional balance, stability of finances
• Fiscal federalism: division of taxing powers (Seventh Schedule), Finance Commission transfers, centrally sponsored schemes and grants
• State Finance Commission and the transfer of funds to panchayats and urban local bodies (Articles 243-I and 243Y)
• Public debt of the state: market borrowings, loans from the Centre, guarantees, off-budget borrowing
• Fiscal Responsibility and Budget Management: the UP Act of 2004, targets for fiscal deficit and debt
• Quality of spending: capital expenditure, subsidies (power, agriculture) and the burden of losses of public-sector undertakings
• Financial management reforms: treasury computerisation, e-payments, the Integrated Financial Management System, direct benefit transfer

Tax and economic reforms

• Taxes the state levies: State GST, VAT on petroleum and alcohol, state excise, stamp duty and registration, motor vehicle tax, electricity duty, mining royalty
• Goods and Services Tax: the 101st Constitutional Amendment, the UP GST Act, 2017, the GST Council, compensation to states and its end
• Effect of GST on UP as a large consuming state
• Reforms in tax administration: e-way bills, online registration of property, technology to check evasion
• Excise policy and its revenue
• Economic reforms in the state: power-sector reforms, land records digitisation, single-window systems, ease of doing business, labour and land reforms

One District One Product (ODOP)

• Launch by the UP government on Uttar Pradesh Day, 24 January 2018
• Aim: to identify one product per district and promote it through finance, training, design, marketing and branding
• Parts of the scheme: margin-money (finance) assistance, common facility centres, skill development and toolkits, marketing help
• Examples: Varanasi (Banarasi silk saree), Bhadohi (carpets), Moradabad (metal craft), Firozabad (glassware), Aligarh (locks and hardware), Agra and Kanpur (leather products), Lucknow (chikankari), Kannauj (perfume), Meerut (sports goods), Saharanpur (wood craft), Bulandshahr (Khurja pottery), Azamgarh (black pottery), Gorakhpur (terracotta), Muzaffarnagar (jaggery), Siddharthnagar (Kalanamak rice), Pratapgarh (aonla products), Pilibhit (flutes), Kushinagar (banana fibre products)
• ODOP and Geographical Indication (GI) tags; ODOP and exports
• Adoption of the ODOP idea at the national level (district-as-export-hub and the central ODOP initiative)
• Issues: quality, access to credit, competition from machine-made goods, middlemen, the needs of artisans

Overlaps

The state budget is on Economy of UP: Main Features and State Budgets; the crafts behind ODOP on Trade, Commerce and Industries. Government budgets and the financial system for India are in General Studies III.