Fiscal Policy
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What is fiscal policy?
Fiscal policy refers to the use of government revenue collection (taxes) and expenditure (spending) to influence the economy. It is a key tool used by governments to manage economic growth, inflation, and employment.
What is the primary objective of fiscal policy?
To manage government revenue and expenditure for economic stability.
Which authority is responsible for fiscal policy in India?
The Union Government of India, primarily through the Ministry of Finance, is responsible for formulating and implementing fiscal policy. The Budget presented by the Finance Minister is the main instrument of fiscal policy.
What is the difference between a budget surplus and a budget deficit?
Surplus means revenue exceeds expenditure; deficit means the opposite.
What is the difference between fiscal policy and monetary policy?
Fiscal policy involves government decisions on taxation and public expenditure, while monetary policy is managed by the Reserve Bank of India (RBI) and deals with money supply, interest rates, and credit. Both together are used to achieve macroeconomic stability.
What is the fiscal consolidation?
Process of reducing fiscal deficit through revenue increase or expenditure cuts.
What is a fiscal deficit?
Fiscal deficit is the difference between the government's total expenditure and its total receipts excluding borrowings. It indicates the amount the government needs to borrow to meet its spending requirements.
What does FRBM stand for?
Fiscal Responsibility and Budget Management Act.
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