Consider the following statements:
- Tax revenue as a percent of GDP of India has steadily increased in the last decade.
- Fiscal deficit as a percent of GDP of India has steadily increased in the last decade.
Which of the statements given above is/are correct?
[UPSC Civil Services Exam – 2017 Prelims]
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither I nor 2
Tax to GDP
- Decade 2001-2011: Steady fall after sub-prime crisis (2007-2010) and then recovery.
- Decade 2006-2016: Except for the fall in 2008 to 2010, there is steady growth. Hence statement 1 is incorrect.
Fiscal Deficit to GDP
- Decade 2001-2011: Decline between 2009-11.
- Decade 2006-2016: Steadily declining from 2011 to 2016. Hence statement 2 is also incorrect.