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FISCAL REFFORM IN INDIA: A CONSTITUTIONAL PROMISE FOR DISTRIBUTIVE JUSTICE

CHANAKYA NATIONAL LAW UNIVERSITY

Final - Draft

FISCAL REFORM IN INDIA: A CONSTITUTIONAL PROMISE FOR DISTRIBUTIVE

JUSTICE

[RESEARCH WORK TOPIC]

SUBMITTED TOWARDS THE FULFILLMENT OF THE COURSE TITLED:-

LAW & ECONOMICS

SUBMITTED TO: - Dr. Shivani Mohan, Assistant Professor of Law

SUBMITTED BY:-SANU RANJAN

ROLL NO:-1559

COURSE:-B.A.L.L.B,

SEMESTER:- 4th

SESSION:-2016-21
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FISCAL REFFORM IN INDIA: A CONSTITUTIONAL PROMISE FOR DISTRIBUTIVE JUSTICE

DECLARATION
I declare that the project work entitled ‘ Fiscal Reform in India: A Constitutional Promise for
Distributive Justice’ submitted by me for partial fulfilment of the Law & Economics is my own
work.

This project has not been submitted for any degree/

certificate / course in any institute / university.

Student name Student’s Signature

Sanu Ranjan
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FISCAL REFFORM IN INDIA: A CONSTITUTIONAL PROMISE FOR DISTRIBUTIVE JUSTICE

ACKNOWLEDGEMENT
The writing a project has one of the most significant academic challenges I have ever faced. Any
attempt at any level can't be satisfactorily completed without the support and guidance of our
learned professor. Gratitude is a noble response of one’s soul to kindness or help generously
rendered by another and its acknowledgement is the duty and I am overwhelmed in all
humbleness and gratefulness to acknowledge our depth to all those who have helped me to put
these ideas, well above the level of simplicity and into something concrete effectively and
moreover on time.

My first obligation, irredeemable by the verbal expression, is to our subject teacher Dr. Shivani
Mohan who has given me her valuable help in myriad way from the start to the very end. She was
always there to show me the right track when I needed her help. She lent her valuable
suggestions, guidance and encouragement, in different matters regarding the topic. She had been
very kind and patient while suggesting me the outlines of this project and correcting my doubts. I
thank her for his overall supports with the help of which I was able to perform this project work.

I would like to extend the thanks to my parents for their selfless encouragement and support
given to me at critical junctures during the making to this project.
Last but not the least, I would like to thank my friends who helped a lot in gathering different
information, collecting data and guiding each other from time to time in making this project.

SANU RANJAN
4th Semester
B.A. L.L.B.
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FISCAL REFFORM IN INDIA: A CONSTITUTIONAL PROMISE FOR DISTRIBUTIVE JUSTICE

TABLE OF CONTENTS

SL. NO. NAME OF THE CHAPTER PAGE NO.

Declaration 2
Acknowledgement 3
Table of Contents 4
1 Introduction 5
1.1 Aims & Objective of the Research 6
1.2 Hypothesis 6
1.3 Research Question 7
1.5 Research Methodology 7
1.6 Sources of Data 7
1.7 Method of Data Collection 7
2. Welfare State: The Ideal of Constitution
3 Fiscal Policy: Government Iron Hands
3.1.1 Keynesian Theory: The Fiscal Effect
3.1.2 Fiscal Reforms: A Critical Analysis with special
reference to Union Budget 2017-18 & 2018-19
4 Conclusion: The Constitutional Promise of
Distributive Justice
5 Bibliography

INTRODUCTION

“Social and Economic Justice have been given a place of pride in our Constitution and one
of the directive principles of State policy enshrined in Art. 38 requires that the State shall
strive to promote the welfare of the people by securing and protecting as effectively as it may
a social order in which justice social, economic and political shall inform all the institutions
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FISCAL REFFORM IN INDIA: A CONSTITUTIONAL PROMISE FOR DISTRIBUTIVE JUSTICE

of national life. The concept of social and economic justice is a living concept of
revolutionary import; it gives sustenance to the rule of law and meaning and significance to
the ideal of a welfare state.”1

P.B. Gajendragadkar J.

When India made a tryst with destiny, the Constitution was solemnly enacted and We, the
People gave ourselves to the Constitution. The Constitution made a promise to create an
egalitarian economy in its directive principles, wherein the the ownership and control of the
material resources of the community are so distributed as best to subserve the common good 2
so the operation of the economic system does not result in the concentration of wealth and
means of production to the common detriment. 3 Hence, it enunciated the profound principle
of Distributive Justice which further aims to promote Social and Economic Justice.
Distributive Justice is not only an aim that the Constitution seeks to achieve but it is also a
promise made by the Constitution to We, the People. Further, to achieve its lofty principles it
illuminated the path of successive generations of Government through Article 112, which is
called as Annual Financial Statement or in common parlance Budget.

Annual Financial Statement, herein referred to as Budget, of a country is a statement to be

laid before both the houses of Parliament mentioning the estimated receipts and expenditure
of the Government of India for that year.4 The Budget of a Country describes the path that the
Government is going to take for ensuring Economic Reform or Fiscal Reform which would
help in achieving the profound concept of Distributive Justice. The Budget shows the Public
Investment which would be made in different sector so to increase employment, standard of
living of people and reduce poverty and ensure less fiscal deficit.

This research work would deal with the Fiscal reform introduced by the Government of India
with reference to the Agriculture Sector. The research work would analyse the reform made
by the Government through investment in Agriculture Sector with reference to the Union
Budget in 2017-18 and 2018-19. The research work would analyse the impact of reform, if
any, to the agricultural sector which would be made by the current budget. Hence, the Fiscal
Reform in context to this research is the change made by the Government through its Fiscal
Measures so to provide Social and Economic Justice to the We, the People.

1
The State Of Mysore vs The Workers Of Gold Mines, AIR 1958 SC 923
2
Art. 39(2), the Constitution of India
3
Art. 39(3), the Constitution of India
4
Art. 112, the Constitution of India
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FISCAL REFFORM IN INDIA: A CONSTITUTIONAL PROMISE FOR DISTRIBUTIVE JUSTICE

AIMS & OBJECTIVE OF THE RESEARCH WORK:-

1. The research work aims to know the way through which the Constitution promises to
create a welfare state so to make its people ‘live with dignity’ rather than having a
‘mere animal existence’.
2. The research work focuses on the importance of Fiscal Policy in growing a Country’s
Economy with different theory of Economist.
3. The prime objective of the research work is to know the fiscal reforms that have been
carried out in the agriculture sector & corporate sector by comparison and analysis of
Union Budget 2017-18 and 2018-19.
4. The research work endeavours to critically analyse the probable effect of the reforms
that have been carried out by the current year Budget in the agriculture and corporate
sector.

HYPOTHESIS:-

The researcher assumes that:-

1. The Constitutional Promise to create a welfare state is always carried out by the Fiscal
Policy of the Government through the Annual Financial Statement enshrined in
Article 112 of the Indian Constitution
2. The Fiscal Policy plays a very important role in growing and developing an Economy
and moreover the Budget has the power to increase the employment in the Economy
and to make country grow at a constant pace.
3. The Reforms that has been carried out in the agriculture sector & corporate sector
have the capability to grow the sector and increase the investment opportunities in
these sectors.
4. The Reforms even though gave a ray of hope but if the allocation of budget doesn’t
take place in an effective manner then it will not have any impact on offsetting the
impact of recession in these sectors and there would be more farmer suicides in near
future.

RESEARCH QUESTIONS:-

1. How does the Constitution fulfil its promise of creating a welfare state?
2. What is the importance of Fiscal Policy in a Country’s Economy?
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FISCAL REFFORM IN INDIA: A CONSTITUTIONAL PROMISE FOR DISTRIBUTIVE JUSTICE

3. What are the challenges that are faced by the agricultural sector and ccorporate sector
in India?
4. How the current year union budget will bring a reform in the agricultural sector and
the corporate sector?

RESEARCH METHODOLOGY:-

METHOD OF DATA COLLECTION:-

The Researcher due to time limitation has based its research on Doctrinal Method
which helped the Researcher to present a ‘Beautiful Bush’ of Knowledge, which is
Truth and has laid down before the ‘Inquisitive Beautiful Mind’ of those who have
certain interest in this Subject for whose completion the Researcher has put its
Humane Heart& Inquisitive Mind.

SOURCE OF DATA COLLECTION:-

“Knowledge is like an unending river of truth” where humans are on the shore of it
and the book is like a boat which helps men to know something about it.” For
accomplishment of this unaccomplished research the researcher has used Primary
Source of Data i.e. Constitution of India as well as Secondary Source i.e. Books,
Journals etc.