Tuesday 20 March 2012

Fiscal Policy



What is Fiscal Policy:


It is the use of government expenditure and revenue collection that directly and indirectly influences the economy of the nation. The following are the features of the Fiscal Policy.,

1. It can be contrasted with the other main types of economic policy, monetary policy, which attempts to stabilize the economy by controlling interest rates and supply of money.

2. The Two main instruments used in Fiscal Policy is i) Government spending and ii) Taxation.

3. It refers to the over all effect if the budget outcome on economic activity. In regards with this following are the three stances of Fiscal Policy.,
 








Fiscal system deals not only with the quantity but the quality of public finance as well. In other words, not merely how much is raised and spent but how has it been raised in the form of

i) Taxes -- Within Direct and Indirect Taxes
ii) Disinvestment proceeds.
iii) Borrowing from market and RBI

2 comments:

  1. You could have elaborated it more.. Nevertheless, a lucide and good way of explaining fiscal policy .. You may like to read monetary policy here ..

    http://civilsprep.in/monetary-policy-by-rbi/

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