Question

What are the main objectives of fiscal policy in a developing country like India? Analysethe implications of a high fiscal deficit on the economy.

17 Jul 2025
Answer :
Word Count : 571
Fiscal policy in a developing country like India plays a crucial role in achieving economic stability, equitable distribution of income, and sustained economic growth. The main objectives of fiscal policy in India can be categorized into several broad goals: 1. Promoting Economic Growth: One of the primary objectives of fiscal policy in India is to accelerate economic development. Through increased public investment in infrastructure, education, healthcare, and other social sectors, the government aims to create the necessary conditions for long-term growth. Fiscal tools such as public expenditure and tax incentives are employed to boost investment and consumption. 2. Reducing Income Inequality and Poverty: Fiscal policy is used as a mechanism to achieve social justice. Through progressive taxation and targeted welfare programs like subsidies, rural employment schemes, and food security measures, the government attempts to redistribute income and reduce poverty. 3. Maintaining Price __________ _____ _____ ___ _________ _________ _____ _________ ____ ___.
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