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

Which of the following measures can reduce a trade deficit?

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What is “inflation targeting”?

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What is the primary goal of a progressive tax system?

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What is the purpose of the "Minimum Support Price" (MSP) in India?

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What is the primary role of the Securities and Exchange Board of India (SEBI)?

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What does “balance of trade” refer to?

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What is meant by the term “current account deficit”?

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Which of the following is considered a public good?

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

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What is a “repo rate”?

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