Fiscal policy refers to the overall effect of the  budget outcome on economic activity. The idea of using fiscal policy to...
Three possible stances of fiscal policy are:   A neutral stance of fiscal policy implies a balanced    budget where G = T...
1. To achieve desirable price level2. To Achieve desirable consumption level3. To Achieve desirable employment level4. To ...
METHODS OF FUNDINGGovernments spend money on a wide variety of things, from the military to services like education and he...
Revenue receipt are those which neither decreases the asset nor  increases the liability of the governmentClassification o...
Revenue Receipts (Tax Revenue)                    10                                          9.3                         ...
Direct Taxes                              4.5                                               4.1         4.2               ...
Indirect Taxes                                        3.5Custom/Excise/Service taxes                                      ...
 Customs duty on nonagricultural products, reduced  from 20% (2003-04)to 10%(2007-08) Duty on steel melting scrap and al...
   CENVAT rate on all goods from 16% to 14%   Excise duty was reduced from 16% to 8% on all    drugs   In the automobil...
Year        Number of services   Tax rate (% )   Revenue (Crores)  2004-05                75              10              ...
Comparision between Direct Tax & Indirect Tax                 7                 6                 5                 4     ...
Non Tax Revenue                    3                          2.6                   2.5                                   ...
Revenue Expenditure                 16                                                     15.1                 14        ...
Revenue expenditure                                 5.0Components of RE                                 4.0               ...
Revenue Defecit                                  5                                                                        ...
Capital Receipts                                   8.0 Capital Receipts                                                   ...
Capital Expenditure capital Expenditure (as % of GDP)                                      4                              ...
Comparision between RE & CE                         16                         14                         12              ...
Plan Expenditure                               6Planned Expenditure (as % of                                              ...
Non Plan Expenditure                                 12Non Plan Expenditure (as % of                                      ...
Fiscal Defecit                                7.0 Fiscal defecit (as % of GDP)                                6.0         ...
PRESENTED BY:  DEEPIKA GULATI(IB/08)   DEVKANT RATH(IB/09)    FATIK KHAN(IB/10)   GAGAN ANAND(IB/11)GAGANJEET PHOGAAT(IB/12)
33051804 fiscal-policy-of-india-for-last-5-yr-and-analysis
33051804 fiscal-policy-of-india-for-last-5-yr-and-analysis
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33051804 fiscal-policy-of-india-for-last-5-yr-and-analysis

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33051804 fiscal-policy-of-india-for-last-5-yr-and-analysis

  1. 1. Fiscal policy refers to the overall effect of the budget outcome on economic activity. The idea of using fiscal policy to combat recessions was introduced by John Maynard Keynes in the 1930s Two main instruments of fiscal policy• Revenue Budget• Expenditure Budget
  2. 2. Three possible stances of fiscal policy are: A neutral stance of fiscal policy implies a balanced budget where G = T (Government spending = Tax revenue). An expansionary stance of fiscal policy involves a net increase in government spending (G > T). A contractionary stance of fiscal policy (G < T)
  3. 3. 1. To achieve desirable price level2. To Achieve desirable consumption level3. To Achieve desirable employment level4. To achieve desirable income distribution5. Increase in capital formation6. Degree of inflation
  4. 4. METHODS OF FUNDINGGovernments spend money on a wide variety of things, from the military to services like education and healthcare, as well as transfer payments.This expenditure can be funded in a number of different ways: Taxation Seignorage, the benefit from printing money Consumption of fiscal reserves. Sale of assets (e.g., land).
  5. 5. Revenue receipt are those which neither decreases the asset nor increases the liability of the governmentClassification of revenue receipts:
  6. 6. Revenue Receipts (Tax Revenue) 10 9.3 8.8 9 8.5 8 7.5 7.1 Revenue Receipts 7 6 5 4 3 2 1 0 2004-05 2005-06 2006-07 2007-08 2008-09 Yearwebsite: http//indiabudget.nic.in DEV 27/07/12
  7. 7. Direct Taxes 4.5 4.1 4.2 4 3.5 personal/corporation taxes 3.5 3 2.8 2.6 2.5 2.2 2.3 PersonaL Income Taxes 2 1.8 1.8 Corporation Tax 1.6 1.5 1 0.5 0 2004-05 2005-06 2006-07 2007-08 2008-09 yearswebsite: http//indiabudget.nic.in
  8. 8. Indirect Taxes 3.5Custom/Excise/Service taxes 3 2.5 Customs 2 Excise 1.5 Service Taxes 1 0.5 0 2004-05 2005-06 2006-07 2007-08 2008-09 Customs 1.8 1.8 2.1 2.2 2.0 Excise 3.1 3.1 2.8 2.6 2.0 Service Taxes 0.5 0.6 0.9 1.1 1.2 Yearswebsite: http//indiabudget.nic.in
  9. 9.  Customs duty on nonagricultural products, reduced from 20% (2003-04)to 10%(2007-08) Duty on steel melting scrap and aluminum scrap reduced to Nil (from 5 per cent earlier). Customs duty on crude and non-refined sulphur reduced to 2% from 5% to boost domestic fertilizer production. Customs duty on cigars, cheroots and cigarillos was increased from 30% to 60%.
  10. 10.  CENVAT rate on all goods from 16% to 14% Excise duty was reduced from 16% to 8% on all drugs In the automobiles sector, excise duties were reduced on small cars from 16% to 12%; hybrid cars from 24% to 14%; electric cars from 8% to Nil In the food processing sector, excise duty was made fully exempt on packaged tender coconut water, paws, mudi (puffed rice), milk containing edible nuts and tea/coffee pre-mixes.
  11. 11. Year Number of services Tax rate (% ) Revenue (Crores) 2004-05 75 10 14200 2005-06 84 10 23055 2006-07 99 12 37598 2007-08 106 12 51301 2008-09 NA 12 65000website: http//indiabudget.nic.in
  12. 12. Comparision between Direct Tax & Indirect Tax 7 6 5 4 Direct TaxDT/IT 3 Indirect Tax 2 1 0 2004-05 2005-06 2006-07 2007-08 2008-09 Direct Tax 4.2 4.6 5.3 6.3 6.5 Indirect Tax 5.4 5.6 5.8 5.9 5.3 Yearswebsite: http//indiabudget.nic.in GAGANJEET PHOGAAT 27/07/12
  13. 13. Non Tax Revenue 3 2.6 2.5 2.2 2.1 Non Tax Revenue 2 2 1.8 1.5 Non Tax Revenue 1 0.5 0 2004-05 2005-06 2006-07 2007-08 2008-09 Yearwebsite: http//indiabudget.nic.in
  14. 14. Revenue Expenditure 16 15.1 14 12.5 12.6 12.2 12.2 12RE as % of GDP 10 8 Series1 6 4 2 0 2004-05 2005-06 2006-07 2007-08 2008-09 Yearswebsite: http//indiabudget.nic.in
  15. 15. Revenue expenditure 5.0Components of RE 4.0 Interest Payment 3.0 Major Subsidies 2.0 Defense Expenditure 1.0 0.0 2004-05 2005-06 2006-07 2007-08 2008-09 Interest Payment 4.0 3.7 3.6 3.6 3.6 Major Subsidies 1.4 1.2 1.3 1.4 2.3 Defense 1.4 1.3 1.3 1.1 1.4 Expenditure Yearswebsite: http//indiabudget.nic.in
  16. 16. Revenue Defecit 5 4.5 Revenue Deficit (as % of GDP) 4.5 4 3.5 3 2.6 2.5 2.5 Series1 1.9 2 1.5 1.1 1 0.5 0 2004-05 2005-06 2006-07 2007-08 2008-09 Yearswebsite: http//indiabudget.nic.in GAGAN ANAND 27/07/12
  17. 17. Capital Receipts 8.0 Capital Receipts Recovery of Loans 6.0 Other Receipts (PSU 4.0 Diisinvestment) 2.0 Borrowings and other Liabilities 0.0 2004-05 2005-06 2006-07 2007-08 2008-09 Recovery of Loans 2.0 0.3 0.1 0.1 0.2 Other Receipts 0.1 0 0 0.8 0 (PSU Diisinvestment) Borrowings and 4.0 4.1 3.5 2.7 6.1 other Liabilities Yearswebsite: http//indiabudget.nic.in
  18. 18. Capital Expenditure capital Expenditure (as % of GDP) 4 3.6 3.5 3 2.5 2.5 1.9 1.8 2 1.7 Series1 1.5 1 0.5 0 2004-05 2005-06 2006-07 2007-08 2008-09 Yearswebsite: http//indiabudget.nic.in
  19. 19. Comparision between RE & CE 16 14 12 10 Revenue ExpenditureRE/CE 8 Capital Expenditure 6 4 2 0 2004-05 2005-06 2006-07 2007-08 2008-09 Revenue Expenditure 12.2 12.2 12.5 12.6 15.1 Capital Expenditure 3.6 1.9 1.7 2.5 1.8 Yearswebsite: http//indiabudget.nic.in
  20. 20. Plan Expenditure 6Planned Expenditure (as % of 5.3 5 4.2 4.3 4.1 3.9 4 GDP) 3 Series1 2 1 0 2004-05 2005-06 2006-07 2007-08 2008-09 Years website: http//indiabudget.nic.in DEEPIKA 27/07/12
  21. 21. Non Plan Expenditure 12Non Plan Expenditure (as % of 11.6 11.6 11.5 11 10.7 GDP) 10.5 Series1 10.2 10.0 10 9.5 9 2004-05 2005-06 2006-07 2007-08 2008-09 Yearswebsite: http//indiabudget.nic.in
  22. 22. Fiscal Defecit 7.0 Fiscal defecit (as % of GDP) 6.0 5.0 4.0 Series1 3.0 2.0 1.0 0.0 2004-05 2005-06 2006-07 2007-08 2008-09 Yearswebsite: http//indiabudget.nic.in
  23. 23. PRESENTED BY: DEEPIKA GULATI(IB/08) DEVKANT RATH(IB/09) FATIK KHAN(IB/10) GAGAN ANAND(IB/11)GAGANJEET PHOGAAT(IB/12)

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