2. Fiscal policy refers to the use of government
spending and tax policies to affect macroeconomic
conditions, particularly employment, inflation and
macroeconomic variables such as aggregate demand for
goods and services. These factors are primarily intended
to stabilize the economy.
“Fiscal policy is concerned with the income and
expenditure of public authorities and with the adjustment
of the one with the other”.
2
6. 6
This policy primarily controls the
absolute the regulation of prices for all goods or
services. It regulates prices while the nation is
through an economic crisis and keeps them steady
during on inflationary time, as a result it regulates
prices throughout the nation.
By regulating the supply of essential goods
and services, the government supports price stability.
As a result, it invests money in rationing and stores
with reasonable prices and a sufficient supply of
food grains. Additionally, it provides subsidies for
utilities like transportation, water and cooking gas,
keeping their prices low enough for regular people
to afford.
8. 8
One of the governments main objectives is
to keep get people into work. Not only do governments
benefit from higher taxes, but also from lower
expenditures on social security. An expansionary policy
may look to invest in infrastructure which would directly
create employment. Alternatively, it may reduce taxes to
give consumers more money to indirectly stimulate
employment from their purchases.
Employment should be the top priority in
every nation that needs to better its economic situation.
India has highest number of young people, which
increases the likelihood of development. The younger
generation is more capable in several areas. Therefore, if
our nation could offer full employment or almost full
employment. The Fiscal policy guides all choices
pertaining to employment.
10. 10
Fiscal policy is a government decisions
regarding spending and taxing. If a government
wants to stimulate growth in the economy, it will
increase spending for goods and services. This will
increase demand for goods and services. Since
demand goes up, production must go up. As an
economy grows, its citizens, on the whole, become
more prosperous. So this is an important objective.
The establishment of heavy industries like
steel, chemicals, fertilisers and industrial machinery is
one way the government promotes economic growth.
It also builds infrastructures that support economic
development, including roads, bridges, railways,
schools, hospitals, water and electricity supplies,
telecommunications, etc…