Public finance

1. Public Finance
Fiscal policy
By: Dr. Neetu Sharma
Assistant Professor
Department of commerce and management
Career College, Bhopal

3. Fiscal policy means by which
Government adjusts its spending
levels and tax rates to monitor
and influence a nation’s
economy. It is the sister strategy
to monetary policy through
which a Central bank influence a
nation's money supply.

4. Types of Fiscal policy
Expansionary Fiscal policy Contractionary Fiscal Policy

5. Expansionary fiscal policy = Expansionary fiscal policy is the
policy which stimulates economic growth . The idea is to put
more money into consumer's hands. So they spend more. That
jumps starts demands, which keeps business running and add
jobs.
Contractionary Fiscal policy = Contractionary fiscal policy is
the policy which is rarely used by the government. That is
because its goal is to slow the economic growth. The tools of
this policy are used in reverse. Taxes are increased and spending
is cut. It is effective in preventing inflation.

6. Tools of Fiscal Policy:
Taxation-
Income
Capital gains from investment
Property
Sales
Government spending-
Subsidies
Transfer payments
Welfare programmes
Public works projects
Government salaries

7. Objectives of Fiscal Policy
-To mobilize resources for economic growth.
-To promote growth in private sectors.
-Equitable distribution of income and wealth.
-Restrain inflationary forces in the economy.

8. Limitations of Fiscal Policy
- Lack of elasticity
- Illiteracy
- Limited sectors
- Inadequate statistics
- Delay in decisions

9. Thank you