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 is meant by the term “current account deficit”?

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

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Which of the following sectors contributes the most to India’s GDP?

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What does the term “capital account” refer to in the balance of payments?

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

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Which of the following is NOT an example of an indirect tax?

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Which of the following is a feature of monopolistic competition?

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What is the term for goods that are used together, such as cars and fuel?

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What does the term "depreciation" refer to in the context of assets?

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Which of the following is a direct tax?

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