Fiscal Policy,industry policy,objectives of industrial policy, captialistic economy,Socialstic economy,exim policy, mixed economy,Fiscal Policy,industry policy,objectives of industrial policy, captialistic economy,Socialstic economy,exim policy, mixed economy

1. MANAGERIAL ECONOMICS
BBA-IB
THIRD SEMESTER
BY:-
Mansi Deokar

2. FISCAL POLICY
Definition: Fiscal policy is the government spending and
taxation that influences the economy.

3. ADVANTAGES OF USING FISCAL POLICY
• Can significantly impact the national income and therefore have immediate
effect on the economy.
• Taxes on negative externalities decreases consumption of negative
externalities or demerit goods.
• Subsidizing merit goods or public goods will increase the consumption.
• Tax cuts on wages encourages people to work and therefore, shift the long
run aggregated supply curve to the right.
• Different rates of taxes on different levels of income reduces gap between
the rich and the poor.

4. DISADVANTAGES OF FISCAL POLICY
• Inflexibility changes in direct taxes or government spending mat take
considerable time because of both political and moral. For example , taxing
rich people more the other might be unfair for them
• Another problem can raise when solving the other. For example,
stimulating aggregated demand to decrease the demand deficient
unemployment may worsen inflation because right shift in cause rise in
price level

5. OBJECTIVES OF FISCAL POLICY
1. Full employment
2. Price stability
3. Accelerating the rate of economic development
4. Increase in rate of economic development
5. Capital formation and growth
6. Encouraging investment

6. TYPES OF FISCAL POLICY
• There are two main types of fiscal policy: expansionary and contractionary.
• Expansionary fiscal policy designed to stimulate the economy, is most often
used during a recession, times of high unemployment or other low periods of the
business cycle. It entails the government spending more money, lowering taxes, or
both. The goal is to put more money in the hands of consumers so they spend more
and stimulate the economy.
• Contractionary fiscal policy is used to slow down economic growth, such as
when inflation is growing too rapidly. The opposite of expansionary fiscal policy,
contractionary fiscal policy raises taxes and cuts spending.

7. ECONOMIC POLICY
• An economic policy is a course of action that is intended to influence or control the
behavior of the economy. Economic policies are typically implemented and
administered by the government.

8. THE EFFECTIVENESS OF ECONOMIC POLICIES
CAN BE ASSESSED IN ONE OF TWO WAYS,
KNOWN
AS POSITIVE AND NORMATIVE ECONOMICS.
• Positive and normative economics. Positive economics attempts to describe how the
economy and economic policies work without resorting to value judgments about
which results are best.
• The distinguishing feature of positive economic hypotheses is that they can be
tested and either confirmed or rejected.

9. • Normative economics involves the use of value judgments to assess the performance
of the economy and economic policies.
• Consequently, normative economic hypotheses cannot be tested.

10. TYPES OF ECONOMIC POLICY
• Fiscal policy: Changes in government spending or taxation.
• Monetary policy: Changes in the money supply to alter the interest rate (usually to
influence the rate of inflation).
• Supply-side policy: Attempts to increase the productive capacity of the economy.

11. EXPORT AND IMPORT POLICY
• Export and import policy facilitate decisions that are crucial to the development of a
successful strategy of country's trade.

12. OBJECTIVES OF EXIM
• stimulating economic growth.
• Enhancing the technological strength and efficiency.
• To generate employment .
• Opportunities and encourage the attainment of standard quality.
• Providing consumers with good quality products and services at reasonable rates

13. EXPORT PROMOTION MEASURES
• Policy measures
• Cash subsidies
• Fiscal incentives
• Export incentives
• Custom and excise duties drawback

14. IMPORTANCE OF EXIM POLICY
• A developing country like India to keep pace with the population growth and
growing industrial infrastructure needs high imports that can be sustained only
with fast export growth

15. VOLUMES OF EXIM POLICY
• Exim policy is established in 5 volumes :-
• Export- import: -provision and schemes related to export and import
• Handbook of produces(vol 1):- followed by parties like exporter, importer, licenser
etc.
• Handbook and procedure(vol 2):- inputs-output norms used for working out the
proportion of various inputs.
• ITCHS(HS) :-manual for finding out exportability and importability of products
according to the current Exim policy.
• Schedule of DEPB rates (vol 5) :- it provide a complete rate structure of duty
exemption passbook scheme.

16. INDUSTRY POLICY
• It is an official strategic effort to encourage the development and growth of part or
all of the manufacturing sector as well as the industrial sector of the economy.

17. OBJECTIVES OF INDUSTRIAL POLICY
• Rapid industrial development
• Employment
• Balance industrial structure
• Prevention of concentration of economic power
• Balanced regional growth

18. POSITIVE OF INDUSTRIAL POLICES
• De-licensing of most industries will help entrepreneurs to quickly grab business
opportunities
• Removal of control will facilitate expansion and growth
• Greater inflow of foreign capital and technology due to removal of restriction

19. CAPITALISTIC ECONOMY
• Capitalistic is an economy system in which the
means of production are privately owned and
operated for profit, usually in competitive markets.

20. CHARACTERISTICS
• Private property
• Freedom of choice
• Price mechanism
• Profit motive
• competitive
•

21. SOCIALISTIC ECONOMY
• Socialist means the system under
which economic system is controlled
and regulated by the government so
as to ensure welfare and equal
opportunity to the people in a society.

22. CHARACTERISTICS
 Socialistic ownership
 Economic planning
 Social welfare motive
 Economic quality
 No competition

23. MIXED ECONOMY
• It is a golden mixture of capitalism and socialism.
Under this system there is freedom of economic
activities and government interferences for the social
welfare. Hence it is a blend of both the economies. The
concept of mixed economy is of recent origin.

24. CHARACTERISTICS
 Co-existence capitalistic and socialistic features
 Co-existence of public and private sector
 Promotion of social welfare
 Profit motive
 Price mechanism

25. THANK YOU