1. Prologue
  2. BES162-P06: 7th Pay Commission Report, IAS “Edge”,OROP,HRA-Inflation
  3. BES162-P07: We can’t JAM-DBT every Scheme because
  4. BES162-P08: Disinvestment- Theory & Current, Budget-2016 Target
  5. BES162-P09: Restructuring Centrally Sponsored Schemes (CSS)
  6. BES162-P10: Fiscal Deficit- Theory & Current, Budget-2016 Target


  • Previous lecture, we had finished upto revenue Expenditure.
  • This part covers the remaining port and thus Economy pillar#2 – budget and fiscal policy is over.
  • Powerpoint available at http://Mrunal.org/download (Go to mediafire => powerpoint => Mrunal =>2_Budget Folder)

BES162-P06: 7th Pay Commission Report, IAS “Edge”,OROP,HRA-Inflation

7th Pay Commission

  • recap of the previous lecture- up to tax and non-tax revenue receipts of the government
  • part of budget: revenue expenditure and non-plan expenditure
  • major components of non-plan expenditure- in decreasing order.
  • 7th Pay commission: theory, salient features, list of beneficiaries, which department implements this report, will the award of 7th pay commission increase inflation in India? Provisions related to house rent allowance, interest bearing advances and interest free advances.
  • What are the views of 7th Pay commission and Justice A.K.Mathur on the “edge” enjoyed by Indian administrative service (IAS), one ranked one pension scheme (OROP) and performance based pay?

Youtube Link: https://youtu.be/kOzlJw-7q9E

BES162-P07: We can’t JAM-DBT every Scheme to reduce Subsidy Leakage because


  • major subsidies in India and their descending order in budget 2016
  • overall subsidy has declined in budget 2016 compared to the revised estimate of 2015, why and how?
  • Science-tech Theory about liquefied petroleum gas (LPG)
  • Steps taken to reduce the petroleum subsidy bill in India- new measures related to Pahal-DBT for super-rich and PM Ujjwalla Yojana for BPL households in budget 2016
  • Role of first mile, middle mile and last mile delivery points in success of direct benefit transfer (DBT) in any scheme.
  •  “O” Ring theory of US Economics Michael Kremer and JAM preparedness index of India for urban and rural region.
  •  Why BAPU- Biometric Authenticated Physical update (BAPU) is more suitable for certain scheme than JAM-DBT?
  •  JAM vs BAPU: Why delivery route is more suitable for food subsidy, kerosene subsidy and fertilizer subsidy? What has Economic survey recommended? What has Government implemented?

Youtube Link: https://youtu.be/Pln25MRScs4

BES162-P08: Disinvestment- Theory & Current, Budget-2016 Target; ETF, OFS, IPP


  • part of budget: capital receipts- debt and non-debt receipts
  • breakup of India’s sovereign debt- internal versus external, short-term versus long-term
  • What are the non- debt capital receipts of the government?
  • Disinvestment: argument in favour and against, timeline of disinvestment in India since LPG crises of 1991
  • three prevalent methods of disinvestment in India: exchange traded funds (ETF), institutional placement program (IPP), offer for sale (OFS)- and their salient features.
  • Disinvestment target of Rs. 56,500 in Budget 2016- how will it be achieved?
  • What is the meaning of strategic disinvestment?
  • Why did the government of the name Department of disinvestment in Department of investment and public asset management (DIPAM)?

Youtube Link: https://youtu.be/hj2DROj-6q0

BES162-P09: Restructuring Centrally Sponsored Schemes (CSS)

Restructuring of CSS

  • In budget 2016, government has decided to work with the plan and non-plan expenditure classification from 2017, why?
  • Classification of 27 Restructure centrally sponsored schemes.
  • What are the “core of the core”, “core” and optional schemes? What is the funding mechanism for sharing formula in them?

Youtube Link: https://youtu.be/n8pQkncITRQ

BES162-P10: Fiscal Deficit- Theory & Current, Budget-2016 Target

fiscal deficit, FRBM Review

  • let’s calculate the budget deficit, fiscal deficit and primary deficit in budget 2016.
  • What is monetised deficit?
  • Why is high level of the fiscal deficit bad for an economy?
  • Fiscal responsibility and budget Management (FRBM) Act 2003- original and extended deadlines.
  • How does Modi government plan to contain the fiscal deficit at the percent of GDP by the year 2017-18?
  • Why is government of India constituting an expert panel to review FRBM Act? Why should we have a “range” rather than fixed targets for fiscal deficit?

Youtube Link: https://youtu.be/hE5l-i1Qfig
Next lecture: Economy Pillar#3: Balance of Payment, WTO Nairobi Package.
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