Economy
Government Policy
Welcome to the dedicated study hub for Government Policy, a cornerstone of your UPSC Civil Services Examination preparation, particularly within the broader domain of Economy. Government Policy
196 articles in this topic
Articles on Government Policy
GST Reforms to Boost India’s Drone Ecosystem
Context The slash in GST for drones by fixing it at a uniform 5 percent in the 56th GST Council meet is set to boost the countrys rapidly growing drone ecosystem. Drone Ecosystem According to industry estimates, the global drone market is valued at over $30 billion in 2025 and is projected to reach $90–100 billion by 2030, driven by rapid adoption of AI, automation, and 5G integration. India is incentivising indigenous drone and counter-drone technologies with USD 230 million support packages, t
Impact of GST Reforms on Cooperative Sector
Context The government has said the GST reforms will strengthen the cooperative sector, make their products competitive, increase demand for their products and increase the income of cooperatives. About In the dairy sector: The tax on butter, ghee and similar products has been reduced from 12% to 5%. GST on milk cans made of iron, steel or aluminium has also been lowered from 12% to 5%.
Next-Gen GST Reforms to Take Effect from September 22
More About the News 0% GST on vital goods/services: Basic food items, health and life insurance, educational materials, select medical devices. 33 life-saving drugs + 3 key cancer medicines have zero GST. Benefits of Key Changes For Consumers: Lower living costs and improved access to healthcare and education due to reduced or zero GST.
Scheme to Promote Critical Mineral Recycling in the Country
Context The Union Cabinet chaired by PM Modi approved a Rs.1,500 crore Incentive Scheme to develop recycling capacity in the country for the separation and production of critical minerals from secondary sources. What are Critical Minerals? These are minerals that are essential for economic development and national security.
GST 2.0: A Landmark in India’s Tax Journey
Recently, the 56th GST Council, chaired by Union Finance Minister, has approved Next-Gen GST reforms, i.e. GST 2.0 that focuses on improving the lives of the common man and ensuring ease of doing business for all with a broader vision of a Viksit Bharat 2047.
APEDA Launches BHARATI Initiative to Boost Agri-food Exports
In News The Agricultural and Processed Food Products Export Development Authority (APEDA) launched its new initiative BHARATI (Bharat’s Hub for Agritech, Resilience, Advancement and Incubation for Export Enablement). Key Features of BHARATI Startup-Centric Initiative: Supports 100 agri-food and agri-tech startups in the inaugural cohort. Three-Month Acceleration Programme: Focus on product development, export readiness, regulatory compliance, market access, and collaborative solutions.
PM Urges Indians to Embrace ‘Vocal for Local’ Mantra
Context Recently, in his latest Mann Ki Baat address, the Prime Minister of India renewed his call for citizens to adopt the mantra of ‘Vocal for Local’, emphasizing the importance of supporting indigenous products to build a self-reliant India. About the ‘Vocal for Local’ Initiative It was launched by NITI Aayog under its Aspirational Blocks Programme in 2024. It emphasizes supporting locally made products, artisans, and industries to boost India’s economy and reduce dependency on imports.
India’s Vocational Training System & Employability
Context India needs to address the long-standing gaps in its vocational education and training (VET) systems to truly transform its growth model. About the India’s Vocational Training System It is one of the largest in the world, designed to equip youth and workers with industry-relevant skills across sectors. It is overseen by the Ministry of Skill Development and Entrepreneurship (MSDE) and regulated by the National Council for Vocational Education and Training (NCVET).
PM Announced Next-gen GST Reforms
Context Recently, the Prime Minister of India has unveiled a new vision for India’s Goods and Services Tax (GST) regime aimed at simplifying tax structures benefiting the poor, middle class, entrepreneurs, traders, and business owners. Suggestions for Future Improvements Settle classification disputes to reduce litigation; Correct inverted duty structures, especially in textiles and MSMEs; Establish GST Appellate Tribunals for faster resolution of disputes; Enhance digital infrastructure for smo
Lok Sabha Passes Income Tax (No. 2) and Taxation Laws (Amendment) Bills
Context The Lok Sabha has passed the Taxation Laws (Amendment) Bill, 2025 and the Income-Tax (No.2) Bill, 2025. About The Income-Tax (No.2) Bill, 2025 The Bill seeks to replace the Income-tax Act, 1961. It simplifies tax language, clarifies deductions, and strengthens cross-referencing across provisions.
ELI Scheme: Debunking the Myth of Job Creation
Recently, the Union Government approved the Employment Linked Incentive (ELI) Scheme to support employment generation. However, it raises concerns regarding its design, target population, and its potential to reinforce, rather than reduce, existing labour market inequalities.
States Must Fix Their Own Economies and Address Structural Issues
A recent report by Crisil projects revenue growth of 7–9% in FY26 for India’s 18 largest states (covering 90% of GSDP), slightly up from 6.6% in FY25.
Cabinet Clears ₹6,520 crore For PM Kisan Sampada Yojana
Context The Union Cabinet increased the budgetary outlay for the flagship scheme Pradhan Mantri Kisan Sampada Yojana (PMKSY) by Rs 1,920 crore to Rs 6,520 crore to boost the food processing sector. About Of the total outlay, ₹1,000 crore has been earmarked to set up 50 Multi-Product Food Irradiation Units under the component scheme Integrated Cold Chain and Value Addition Infrastructure (ICCVAI). And 100 NABL-accredited Food Testing Laboratories under the Food Safety and Quality Assurance Infras
What State Finances Tell Us About the Economy?
State finances and budgets reflect both macroeconomic resilience and local governance priorities, from infrastructure and education to healthcare and local employment initiatives.
Textile Sector in India
Context PM Modi in his Mann Ki Baat program, remarked that the textile sector has become a major strength of the country. Overview of Indias Textile Industry Contribution: The textile and apparel industry contributes 2.3% to our GDP, 13% to industrial production, and 12% to exports. Export Basket: India exported textile items worth US$ 34.4 billion in 2023-24, with apparel constituting 42%, followed by raw materials/semi-finished materials at 34% and finished non-apparel goods at 30%.
Study on GST Burden on Indian Households
In Context A recent study analysing Indias Goods and Services Tax (GST) regime using the 2022–23 Household Consumption Expenditure Survey (HCES) has revealed that the bottom 50% of consumers bear the same GST burden as the middle 30%, raising important questions about the tax systems progressivity and equity. How Is GST Intended to Work? GST is a consumption-based indirect tax and is designed for simplicity and broad-based collection.
Government aims to raise share of tourism in economy to 10%
Context The Union Minister of Culture and Tourism has said that the government is committed to raising the contribution of tourism in the country’s economy to 10% by 2047. India’s Tourism Sector: Key Highlights India’s tourism sector, rich in heritage, culture, and diversity, is emerging as a global favorite and a key driver of economic growth. India’s economy is $4 trillion today, expected to reach $32 trillion by 2047.
The Periodic Labour Force Survey (PLFS)
Context The Periodic Labour Force Survey (PLFS) for June 2025 has been released by the Ministry of Statistics and Programme Implementation. Major Highlights Labour Force Participation Rate (LFPR) among persons of age 15 years and above was 54.2 % during June 2025 as compared to 54.8% during May, 2025. LFPR in rural areas was 56.1% and LFPR in urban areas was 50.4%.
GST Reforms: Home Minister to open talks for Consensus on Rate Rationalisation
Context The Union Home Minister is set to lead consultations with states and key central ministries to push forward long-pending reforms to the Goods and Services Tax (GST) structure. Rate Rationalisation A key long-pending proposal is to eliminate the 12% slab to move toward a simplified three-rate structure. The 12% slab currently includes items like packaged food (condensed milk, fruit juices), household goods (furniture, sewing machines), and medical supplies (diagnostic kits, bandages).
Green Revolution: Its Legacy and India’s Strategic Role in Agricultural R&D
Context India is facing both a responsibility and a historic opportunity — to repay the debt owed to regions that fueled India’s food security, and to reimagine agriculture for a sustainable future. About the Green Revolution The term ‘Green Revolution’ was coined by William S. Gaud, then Administrator of the United States Agency for International Development (USAID), in 1968.