Read the following passage and answer the questions given below it :The Finance Ministry has proposed a two slab GST structure instead of multiple slabs. This reform will make the tax system simpler, benefiting micro, small and medium enterprises and…

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Q.5 (iii) Read the following passage and answer the questions given below it : The Finance Ministry has proposed a two slab GST structure instead of multiple slabs. This reform will make the tax system simpler, benefiting micro, small and medium enterprises and also making goods cheaper for consumers. Apart from regular tax revenue, the central government earns a large share through Cess and Surcharge. For the financial year 2025-26, the government expects ₹ 5.91 lakh crore from Cess and Surcharge which is a 9.43% increase compared to the previous year. Recently, GST rates on several items were reduced. This gives relief to consumers, increases the purchasing power and boosts demand in the economy. However, such cuts reduce the government’s revenue. According to officials, this loss can be managed through better tax collection and other fiscal measures. Today, India’s public finance system faces major challenges: Revenue shortfall with increasing expenditure. Need to reduce fiscal deficit while promoting investment. To address this, the government must focus on tax reforms, prioritizing expenditure and long term infrastructure and investment. Questions : (1) How much revenue does the government expect from Cess and Surcharge in F.Y. 2025-26? (1) (2) Mention the major challenges faced by India’s public finance system today. (1) (3) Express your opinion with reference to the given passage. (2)

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Answer: (1) ₹ 5.91 lakh crore (2) revenue shortfall with rising expenditure, and the need to cut the fiscal deficit while promoting investment (3) opinion below (1) The government expects ₹ 5.91 lakh crore from Cess and Surcharge in F.Y. 2025-26, a 9.43% increase over the previous year. (2) The major challenges are: (a) revenue shortfall along with increasing expenditure, and (b) the need to reduce the fiscal deficit while promoting investment. (3) Opinion: A simpler two-slab GST is a welcome reform. Fewer slabs reduce classification disputes and compliance cost, especially for MSMEs, and lower rates make goods cheaper, raise purchasing power and boost demand. The fall in revenue from rate cuts can be made up by a wider tax base, better compliance and use of technology in collection. At the same time the government should control wasteful (non-development) expenditure and give priority to capital expenditure on infrastructure, so that growth is promoted while the fiscal deficit is gradually reduced. Heavy dependence on cess and surcharge should be reduced, as these are not shared with the states. Thus balanced tax reform and expenditure management are needed for sound public finance.

Read the following passage and answer the questions given below it :The Finance Ministry has proposed a two slab GST structure instead of multiple slabs. This reform will make the tax system simpler, benefiting micro, small and medium enterprises and…

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