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FISCAL MONETARY RELATIONS
What is the primary distinction between fiscal policy and monetary policy in India?
Fiscal policy deals with government revenue and expenditure managed by the Ministry of Finance, while monetary policy deals with money supply and interest rates managed by the Reserve Bank of India.
What is 'twin balance sheet problem' in the context of fiscal-monetary coordination?
Stressed banks and over-leveraged companies simultaneously weakening economic transmission.
Which body is responsible for formulating monetary policy in India?
The Monetary Policy Committee (MPC) of the Reserve Bank of India is responsible for formulating monetary policy, with a mandate to maintain price stability while keeping growth in mind.
What is the 'primary deficit' and how does it differ from the fiscal deficit?
Fiscal deficit minus interest payments; reflects current borrowing excluding past debt burden.
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