Question

primarily through: The 2025-26 Budget of the Kerala government emphasizes reducing fiscal stress

• A. Mobilising higher own-tax revenue
• B. Expanding foreign loans
• C. Reducing welfare expenditure
• D. Cutting education spending

Answer 1

Answer:

A. Mobilising higher own-tax revenue

• The 2025-26 Budget of the Kerala government emphasizes reducing fiscal stress primarily through:Mobilising higher own-tax revenue

• The budget's strategy to reduce the fiscal deficit and revenue deficit relies heavily on increasing the state's own receipts, rather than cutting down on key social expenditure.

• Mobilising Higher Own-Tax Revenue: The government announced several measures aimed at boosting its own revenue generation. This included steps like a substantial hike in the basic tax rates on land (50% increase), revision of court fees, and the introduction of an amnesty scheme for GST arrears to improve compliance and collection. This focus on maximizing internal revenue is the primary mechanism cited for improving fiscal health.

• Fiscal Consolidation: The budget highlighted an effort to reduce the fiscal deficit and revenue deficit as a percentage of GSDP (Gross State Domestic Product), signaling a commitment to fiscal prudence driven by better revenue collection.

• The other options are less accurate as the primary means:

  1.(B) Expanding foreign loans: While the state uses borrowing, the primary stress-reduction strategy is revenue generation, not increasing reliance on loans (foreign or domestic).

  2.C) Reducing welfare expenditure: The budget maintained a strong focus on social welfare, with significant allocations for social security pensions, healthcare, and housing (e.g., Life Mission), making "reducing welfare expenditure" an incorrect description of the primary strategy.

  3.(D) Cutting education spending: The budget did not target major cuts in core sectors like education to reduce fiscal stress.