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👉 Learn One PYQ Concept Everyday 🔥 GDP Growth Rate 🔥 @RakshanIASAcademy The question was asked in 2015. Thus, ‘last decade’ means 2004-05 to 2014-15. Kindly note, Statement 1 talks about the increase in the Real GDP growth rate and not GDP growth. Kindly refer to the table shown below. Between 2004 and 2014, the GDP growth rate fell many times, from 8.06 (2006) to 7.66 in (2007); again from 7.66 (2007) to 3.09 (2008). Thus the GDP growth rate has not steadily increased in that decade. Hence statement 1 is not correct. Despite the uneven GDP growth rate, the GDP value has increased in that decade (adjusted for inflation). Look at the red rectangle. Hence statement 2 is correct. Hence option (b) is the correct answer. Important Points about The Topic - GDP Growth rate 1. What Is GDP Growth Rate? ■ GDP growth rate measures the percentage change in the real value of goods and services produced within an economy between two periods. ■ For meaningful comparison of economic growth, real GDP is preferred because it removes the effect of price changes. 2. Real GDP vs Nominal GDP — Most Important ■ Nominal GDP → measured at current prices. ■ Real GDP → measured after removing the effect of inflation/price changes. ■ Therefore, nominal GDP can rise even when the actual volume of production has not increased significantly. 3. Base Effect ■ The base effect occurs when the growth rate of the current period is strongly influenced by the GDP level of the previous period. Example: ■ Year 1 GDP = ₹100 ■ Year 2 GDP = ₹80 → −20% ■ Year 3 GDP = ₹100 → +25% 👉 Although Year 3 GDP has merely returned to the Year 1 level, the reported growth rate is 25% because it is calculated from the unusually low Year 2 base. 4. GDP Growth Can Be Driven by Different Sectors India's GDP is broadly associated with three major sectors: ■ Agriculture & allied activities ■ Industry ■Services A rise in GDP can therefore occur because of strong performance in services, even if agriculture or manufacturing grows slowly. 👉 Important: GDP growth rate and sectoral growth rate are not the same thing. 5. GDP Growth vs Per Capita Income ■ A rise in GDP does not automatically mean that every individual becomes richer. ■ If GDP grows faster than population: ■ Per capita GDP generally increases. ■ Therefore, for assessing changes in average economic output/income per person, per capita measures are important.

Q. With reference to Indian economy, consider the following statements:

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👉 Learn One PYQ Concept Everyday 🔥 Tax to GDP Ratio 🔥 @RakshanIASAcademy 👉 There was a confusion related to the correctness of the first statement. Thus option (a) and option (d) were highly probable, but as per UPSC’s official answer key, option (a) is the correct answer. 👉 The tax-to-GDP ratio measures a nation's tax revenue relative to the size of its economy. This ratio is used with other metrics to determine how well a nation's government directs its economic resources through taxation. Developed nations typically have higher tax-to-GDP ratios than developing nations To understand the correctness of statement 1 refer to the below 👉 Mathematically, it seems that the tax-to-GDP ratio will decrease if either the GDP increases (which is the denominator) with the tax collection (numerator) remaining the same or when the tax collection decreases with the GDP remaining the same. 👉 But, in reality, a rise in GDP growth often leads to higher tax collection and thus a drop in tax collection means fall in the GDP and often the GDP drop is greater than the tax drop. That is why statement 1 is correct. Statement 2 is not correct: Because GDP growth does not allude to how well the wealth created is distributed among the people. Hence option (a) is the correct answer Important Points about the Topic - Tax to GDP Ratio 1. WHAT DOES THE WORLD BANK SAY ABOUT TAX-TO-GDP RATIO? 👉 Tax revenues above 15% of a country’s gross domestic product (GDP) are a key ingredient for economic growth and poverty reduction, according to the World Bank. This level of taxation ensures that countries have the money necessary to invest in the future and achieve sustainable economic growth. 👉 Developed countries generally have a far higher ratio. The average among members of the Organisation for Economic Cooperation and Development was 34.0% in 2022.India’s tax-GDP ratio is much lower compared to the international level. Currently, it stands at 11.7 percent 2. What Does a Higher Ratio Indicate? 👉 A higher Tax-to-GDP ratio generally indicates that the government has a larger tax base and greater capacity to mobilise resources. ■ It can help the government finance: ■ Infrastructure ■ Health and education ■ Welfare programmes ■ Public investment ⚠️ But: A higher ratio does not automatically mean higher economic growth or better governance. 3. Direct Tax vs Indirect Tax ■ Tax revenue broadly consists of: 👉 Direct Taxes ■ Income Tax ■ Corporate Tax 👉 Indirect Taxes ■ GST ■ Customs duties ■ Excise duties 4. Factors Affecting Tax-to-GDP Ratio 👉 The ratio can increase due to: ■ Expansion of the formal economy ■ Better tax compliance ■ Digitalisation of transactions ■ Improved tax administration ■ Higher incomes and profits ■ Broadening of the tax base 👉 It can remain low when there is: ■ Large informal sector ■ Tax evasion ■ Narrow tax base ■ Low per-capita income ■ Significant unreported economic activity 👉 Key concept: Tax base ≠ Tax rate. The government can increase tax revenue by broadening the tax base even without increasing tax rates. 5. India-Specific UPSC Point ■India's general government tax-to-GDP ratio is lower than that of many developed economies, reflecting factors such as a large informal sector and a relatively narrow direct-tax base. ■ However, do not confuse tax-to-GDP ratio with government revenue-to-GDP ratio: 👉 Tax-to-GDP → only tax revenue 👉 Revenue-to-GDP → broader government revenue, including non-tax revenue

Q. A decrease in tax to GDP ratio of a country indicates which of the following? 1. Slowing economic growth rate 2. Less equitable distribution of national income Select the correct answer using the codes given below.

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👉 Learn One PYQ Concept Every day 🔥Private Member's Bill 🔥 @RakshanIASAcademy A Private Member's bill is introduced by any member of Parliament other than a minister. Its introduction in the House requires one month’s notice. Its drafting is the responsibility of the member concerned. Hence statement 1 is not correct. The last Private Member's Bill passed by parliament was the Supreme Court (Enlargement of Criminal Appellate Jurisdiction) Bill,1968, which became an act on August 9, 1970. The Rights of Transgender Persons Bill, 2014, passed by the Rajya Sabha on Friday is the first private member's bill to get the upper house's approval in the past 45 years. Hence statement 2 is not correct. Important Points about the Topic - Private Member's Bill 1. Who Can Introduce It? ■ A Private Member’s Bill is a Bill introduced by a Member of Parliament who is not a Minister. ■ It can be introduced by a member of either Lok Sabha or Rajya Sabha. ■ It can be introduced by a member of the ruling party or the opposition. 2. Notice Period ■ A member intending to introduce a Private Member’s Bill generally has to give one month's notice. ■ This is different from a Government Bill, for which the procedure is different. 3. Who Decides Its Admissibility? ■ The Speaker of Lok Sabha or Chairman of Rajya Sabha, as applicable, decides whether the Bill can be admitted for introduction according to the rules. ■ The Bill must satisfy the relevant constitutional and procedural requirements. 4. Private Members’ Business ■ Private Members' Bills are generally considered during Private Members’ Business. ■ In Lok Sabha, this is traditionally taken up on Fridays, subject to the House's schedule. ■ Private Members' business also includes resolutions. 5. Can It Become an Act? — YES ■ A Private Member's Bill follows the normal legislative process. ■ If passed by both Houses and receives the President's assent, it can become an Act. ■ Therefore, there is no constitutional bar preventing a Private Member's Bill from becoming law.

Which of the statements given above is/are correct?

Q. With reference to the Parliament of India, consider the following statements: 1. A private member’s bill is a bill presented by a Member of Parliament who is not elected but only nominated by the President of India. 2. Recently, a private member’s bill has been passed in the Parliament of India for the First time in its history.

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