Background
Overview
UPSC covers public finance, government budgeting, social sector schemes, and demographic trends (GS2, GS3). Understanding the sustainability challenges of welfare states, particularly in the context of an ageing population, is crucial for analyzing India's own social security and fiscal policies.
Fiscal policy involves government decisions on taxation and spending to influence the economy, while the welfare state refers to a system where the government protects and promotes the economic and social well-being of its citizens, often through social security, healthcare, and education. Sustainability challenges arise when demographic shifts, such as an ageing population, strain public finances, creating a dilemma between maintaining welfare provisions and managing public debt.