Topic Details (Notes format)

Fiscal Policy and Budget

Subject: Economics

Book: Comprehensive Indian Economy

Fiscal policy involves government spending, taxation, and borrowing to steer the economy. In India, the annual Union Budget outlines revenue and expenditure plans, revealing priorities for sectors like infrastructure, agriculture, and social welfare. Concepts like revenue deficit, fiscal deficit, and primary deficit are central to gauging fiscal health. The Fiscal Responsibility and Budget Management (FRBM) Act sets targets to maintain fiscal discipline. Exam readiness requires clarity on how changes in tax structures—like GST—and public spending shape economic growth, plus an understanding of how deficits are managed through market borrowings and bond issuances.

Practice Questions

What does “inclusive banking” mean?

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What is the main objective of disinvestment in public sector undertakings (PSUs)?

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What is the primary function of the International Monetary Fund (IMF)?

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What is the “law of diminishing marginal utility”?

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Which of the following is a feature of a command economy?

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What is meant by “credit rating”?

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Which is the largest source of tax revenue for the Government of India?

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Which term refers to the decrease in the value of a currency relative to foreign currencies?

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What is the meaning of “disguised unemployment”?

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Which of the following measures can reduce a trade deficit?

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