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What is the primary objective of the Fiscal Policy in India?
Control money supply
Regulate stock market
Management of government revenue and expenditure
Control foreign exchange rates
Management of government revenue and expenditure
Fiscal policy refers to the use of government revenue collection (taxation) and expenditure (spending) to influence macroeconomic conditions, including economic growth, inflation, and employment. In India, it is formulated by the Ministry of Finance through the Union Budget.
Fiscal policy refers to the use of government revenue collection (taxation) and expenditure (spending) to influence macroeconomic conditions, including economic growth, inflation, and employment. In India, it is formulated by the Ministry of Finance through the Union Budget.
Article 112 of the Indian Constitution (Annual Financial Statement / Union Budget).
Formulated by the Ministry of Finance, Government of India
Key instruments are taxation policy and public expenditure/borrowing
Aims to achieve growth with stability and reduce fiscal/revenue deficits
Option A (Control money supply) is managed by the Reserve Bank of India (RBI) via Monetary Policy.
Option B (Regulate stock market) is regulated by the Securities and Exchange Board of India (SEBI).
Option D (Control foreign exchange rates) is managed by the RBI through forex market interventions.
C is correct тАФ Management of government revenue and expenditure constitutes the core mechanism of fiscal policy.
Always contrast Fiscal Policy (Ministry of Finance, Budget, Taxation) with Monetary Policy (RBI, Repo Rate, MPC under Section 45ZIB of RBI Act) to avoid confusion in railway and SSC exams.
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