Government Downsizing: Lessons from the US 'DOGE' Initiative
UPSC Relevance
Prelims: Indian Economy (Fiscal Policy - Fiscal Deficit, Public Debt, Tax-to-GDP Ratio), Indian Polity & Governance (Administrative Reforms, Bureaucracy).
Mains:
GS Paper 2: Role of civil services in a democracy; Important aspects of governance, transparency and accountability, e-governance- applications, models, successes, limitations, and potential.
GS Paper 3: Government Budgeting; Indian Economy and issues relating to planning, mobilization of resources, growth.
GS Paper 4 (Ethics): Probity in Governance.
Key Highlights from the News
Main Initiative: The Department of Government Efficiency (DOGE) is an administrative reform started in the United States, aiming to reduce government spending, increase efficiency, and decrease the fiscal deficit.
Actual Reason: The article clarifies that the high fiscal deficit and debt in the US are not due to high government spending, but rather due to low revenue collection and a low tax-to-GDP ratio. Compared to other major developed countries, US government spending as a percentage of GDP is lower.
DOGE's Actions:
Workforce optimization by reducing government employees, canceling unused office contracts, and eliminating unnecessary regulations.
Using Artificial Intelligence (AI) to monitor employee efficiency.
Special portals to make information about government grants transparent.
Challenges and Contradictions:
The new law, One Big Beautiful Bill (OBBB), part of this reform, provides more tax cuts than it reduces spending. This is likely to actually increase the nation's debt.
Conclusion: The article argues that a country's fiscal deficit and debt cannot be solved by austerity measures alone without efforts to increase government revenue.
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