FISCAL POLICY

FISCAL POLICY

Presented By: Amit Kumar Nitesh Kumar Arpit Srivastav Parvez Khan Priyank Mishra Rahul Singh

INTRODUCTION

Paul Samuelson:Fiscal Policy means Public Expenditure and Tax Policy.

Arthur Smithies:Fiscal Policy is a policy under which Government uses its expenditure and revenue programs to produce desirable effects and avoid undesirable effects on the National Income, Production and Employment.

PROS OF FISCAL POLICY

Highly Acceptable for Developing Countries. Emphasis on Overall Economic Growth. Takes care of Revenue and Expenditure. Helps in Planning.

Easy to Target Specific Sector.

For the Social Welfare.

INSTRUMENTS OF FISCAL POLICY

BUDGETARY POLICY

TAXATION POLICY

PUBLIC DEBT

PUBLIC EXPENDITURE

OBJECTIVES OF FISCAL POLICY

Objectives

For Developed Countries

For Developing Countries

For Underdeveloped Countries

UNDERDEVELOPED COUNTRIES
Maximization of Saving. Maximization of Capital Formation. Diversion of Resources.

Avoid Inflation.
Eliminate Sectoral Imbalances. Incentives to Small Scale Industries. Eliminate Inequalities.

DEVELOPING COUNTRIES
Price Stability.

Capital Formation.
Economic Stability. Removal of Unemployment. Mobilization of Resources. Redistribution of National Income.

DEVELOPED COUNTRIES
To raise the level of investments.

to check the fluctuations in the effective demand

of money. Proper direction to government investments. Determination of suitable taxation policy.

LIMITATIONS
1. Dependence on the Size of Measures.
2. Dependence on the Redistribution of Income. 3. Flexibility of the Government Revenue.

4. Effects on Private Investment.

5. Changes in the Balance of Payment. 6. Dependence on Supply of Human Efforts. 7. Lack of Co-Ordination and Integration. 8. Limitations of Budgetary Policy.

Thank You