What are the main objective of fiscal policy in India?

Fiscal policy of India always has two objectives, namely improving the growth performance of the economy and ensuring social justice to the people. 1. Development by effective Mobilisation of Resources: The principal objective of fiscal policy is to ensure rapid economic growth and development.

What are the objective and tools of fiscal policy?

The tools of fiscal policy are taxes, expenditure, public debt and a nation’s budget. They consist of changes in government revenues or rates of the tax structure so as to encourage or restrict private expenditures on consumption and investment.

Which is not objective of fiscal policy?

Answer: To increase liquidity in the economy is not the main objectives of fiscal policy of India because there are lots of factors which are not under control of Indian Govt. Moreover, fiscal policy is made just for better utilization of financial resources of Government of India.

What are the main objectives of monetary policy and fiscal policy?

Monetary policy refers to the actions of central banks to achieve macroeconomic policy objectives such as price stability, full employment, and stable economic growth. Fiscal policy refers to the tax and spending policies of the federal government.

What are the basic tools of fiscal policy?

The two main tools of fiscal policy are taxes and spending. Taxes influence the economy by determining how much money the government has to spend in certain areas and how much money individuals should spend.

What is fiscal policy and its purpose?

Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation’s economy. It is the sister strategy to monetary policy through which a central bank influences a nation’s money supply.

What are the effects of fiscal policy?

The direct and indirect effects of fiscal policy can influence personal spending, capital expenditure, exchange rates, deficit levels, and even interest rates, which are usually associated with monetary policy.

What are the two tools of fiscal policy?

What are four limitations of fiscal policy?

Limits of fiscal policy include difficulty of changing spending levels, predicting the future, delayed results, political pressures, and coordinating fiscal policy.

Main objectives of Fiscal Policy in India: Economic growth: Fiscal policy helps maintain the economy’s growth rate so that certain economic goals can be achieved. Price stability: It controls the price level of the country so that when the inflation is too high, prices can be regulated.

What are fiscal policy objectives and tools?

What are the two objectives of fiscal policy?

Fiscal policy of India always has two objectives, namely improving the growth performance of the economy and ensuring social justice to the people.

What are the 3 goals of fiscal policy?

The three major goals of fiscal policy and signs of a healthy economy include inflation rate, full employment and economic growth as measured by the gross domestic product (GDP).

Revenue Earning

Objectives of Fiscal Policy 1. To maintain and achieve full employment. 2. To stabilise the price level. 3. To stabilise the growth rate of the economy. 4. To maintain equilibrium in the balance of payments. 5. To promote the economic development of underdeveloped countries.

How is fiscal policy based on Keynesian economics?

The fiscal policy is based on Keynesian economics, which is a theory by economist John Maynard Keynes. As per the theory, a government can play a major role in influencing productivity levels in an economy by adjusting the tax rates and public spending. What is a Fiscal Policy? Who All are Affected? Monetary Policy – How It’s Different?

How is fiscal policy different in developing countries?

Therefore, the objectives of fiscal policy of developed countries are different from those of developing countries.

What does it mean by discretionary fiscal policy?

Discretionary fiscal policy requires deliberate change in the budget by such actions as changing tax rates or government expenditures or both. (iii) variations in both expenditures and tax simultaneously. (i) When taxes are reduced, while keeping government expenditure unchanged, they increase the disposable income of households and businesses.