Aspirant Academy

Economy

Current Affairs Integration

State Budget and Fiscal Management

Paper I · Unit 2 Section 14 of 16 0 PYQs 39 min
Topic Preview Subject Inventory

Public Section Preview

Current Affairs Integration

Recent Developments

  • Rajasthan Budget 2025-26 Presentation (February 19, 2025): Deputy CM Diya Kumari presented the budget with total modified outlay of ₹2,09,633.99 crore. Key fiscal theme: balancing welfare commitments (Lado Protsahan, VYUPY, Mukhyamantri Kisan Samman Nidhi) with capital expenditure for infrastructure under Viksit Rajasthan 2047.

  • Mukhyamantri Yuva Swarojgar Yojana Launch (January 12, 2026): Launched on National Youth Day by CM Bhajanlal Sharma with 100% interest subsidy on loans (up to ₹10 lakh for graduates/ITI in manufacturing); target of 1 lakh entrepreneurs/year creates new revenue expenditure commitment through interest subsidy payouts.

  • Rajasthan Vishwakarma Yuva Udyami Protsahan Yojana (VYUPY) (Announced: February 2025 Budget): ₹150 crore corpus fund; loans up to ₹2 crore with 8-9% interest subsidy. Creates a new revenue expenditure obligation in the 2025-29 period.

  • Rajasthan Diwas Welfare Package (March 30, 2025): ₹375 crore disbursed to women beneficiaries across 11 schemes — LPG subsidy (₹200 crore to 1.10 crore families), Ladli Protsahan (₹7.50 crore), Women's SHG Funding (₹100 crore). Demonstrates the revenue expenditure pressure from welfare commitments in a state with revenue deficit.

  • Royalty Rationalization for Critical Minerals (November 12, 2025 — Union Cabinet): New ad valorem royalty rates for Graphite (2-4%), Caesium (2%), Rubidium (2%), Zirconium (1%). Rajasthan has significant deposits of several critical minerals — policy change could modestly increase mining royalty revenue, though primary impact is national.

  • 15th Finance Commission Grants Utilisation (Ongoing): ₹12,400 crore in tied and untied grants to Rajasthan's local bodies for 2021-26. Utilisation tracking is a focus of the SPFM project — delayed utilisation results in lapses and reduced effective devolution.

Potential Exam Questions from Current Affairs

  1. Possible question: The Rajasthan government launched Mukhyamantri Yuva Swarojgar Yojana with 100% interest subsidy. What are the fiscal implications of such schemes on the state budget?
    Answer pointers: Interest subsidy = revenue expenditure from state budget; adds to committed expenditure pressure; ₹10 lakh loan × 1 lakh entrepreneurs × 8% subsidy = ~₹800 crore/year if fully utilised; trade-off with capital expenditure; FRBM compliance challenge; sustainability depends on own revenue growth.

  2. Possible question: "Rajasthan's fiscal deficit exceeded 4% of GSDP in 2023-24, violating the FRBM target of 3%." Evaluate the causes and suggest corrective measures.
    Answer pointers: Causes — committed expenditure (OPS pensions, salary bill, interest on ₹5.7 lakh crore debt), welfare schemes (Chiranjeevi, subsidies), COVID borrowing legacy; SGST collection still below potential; Corrective measures — own tax improvement (property tax, mining royalties), phased expenditure rationalisation, SPFM project, medium-term fiscal consolidation plan, capital expenditure efficiency.

  3. Possible question: Explain the role of the 15th Finance Commission in strengthening local body finances in Rajasthan.
    Answer pointers: 15th FC grants to Rajasthan's rural local bodies (₹9,300 crore) and urban local bodies (₹3,100 crore) for 2021-26; tied grants for health and sanitation (SDG-3 and SDG-6); performance grants for property tax improvement and audit; complement to 6th SFC devolution; Articles 243-I and 243-Y constitutional basis.

Topic 32 of 138 | Paper I, Unit 2 — Economics | Generated: 2026-04-06