Monetary and fiscal policy are two essential tools used by governments to stabilize their economies. Monetary policy involves managing the money supply and interest rates, while fiscal policy involves government spending and taxation. Together, these policies can help control inflation, boost economic growth, and promote financial stability. Understanding how these policies work and their impact on the economy is crucial for businesses and individuals alike. A presentation on monetary and fiscal policy is an informative way to learn about the tools used by governments to stabilize their economies. It covers the basics of monetary policy, such as managing the money supply and interest rates, as well as fiscal policy, which involves government spending and taxation. The presentation provides insights on how these policies impact the economy, including controlling inflation, boosting economic growth, and promoting financial stability. It's an excellent resource for businesses, individuals, and students looking to deepen their understanding of economic policy.

1. Topic : Objectives & Tools of
Monetary & Fiscal Policy
Created & Performed by Bakkaprabhu Uppar
Subject : Managerial Economics
Reg No : P04AD22C012001
Govt. First Grade College, Bidar
M.Com 1st SEM

2. Objective of this Seminar
 Knowing how the Indian Economy actually works
 Knowing how the Expenditure & Income of Govt at glance.
 Understanding prominent things like Inflation & Economy
 Meaning of Monetary & Fiscal Policy
 Objectives of Monetary & Fiscal Policy
 Understanding various tools of Monetary & Fiscal policy
 Conclusion

3. Monetary Policy
 Meaning
 Importance
 Objectives

4. How the Economy actually works?
Economy runs through transcations, which may be through credit or cash

5. Central Bank : Prints Money

6. Inflation:
Amount of spending increases more than the production of goods.
Prices raise = Inflation
Eventually creates higher rate of interest.

7. Deflation:
Due to higher inflation :
People spend less, price of goods go
down = Deflation
(Slowdowns economic activity)
Severe deflation leads to recession

8. Objectives of Monetary Policy
 Inflation
 Unemployment
 Currency Exchange Rates
 Sustainable Economic Growth

9. Tools of Monetary Policy
 At broad we can say – Interest rate adjustments, reserve change, open market operations etc..
1. Repo Rate (6.5)
2. Reverse repo rate (3.35)
3. Bank rate policy (Discount Rate) (4.25)
4. Cash Reserve Ratio (4.5)
5. Statutory liquidity ratio (18% in FEB)
6. Open Market Operations

10. Fiscal Policy
 Meaning
 Importance
 Objectives
 Tools

11. Objectives of Fiscal Policy
 Economic Growth
 Consumption Control – This way, the ratio of savings to income is raised.
 Raising the rate of investment.
 Taxation, infrastructure development.
 Imposition of progressive taxes.
 Exemption from the taxes provided to the vulnerable classes.
 Heavy taxation on luxury goods.

12. Tools of Fiscal Policy
 At broad we can say – Govt Receipts, Govt Expenditure, and Public Debt

13. Govt. Receipts : How Govt. Makes Money?
1. Revenue Receipt
 Tax Revenue (Income tax, sales tax, corporate tax etc..)
 Non-tax Revenue (Fees, Licenses, Penalty etc..)
 Investments
2. Capital Receipt
 Disinvestments
 Borrowings
 Loans & Recoveries

14. Govt. Expenditure : Why Govt. Needs to spend
money
 For the growth of economy
 For the welfare of the people of the country

15. Govt. Expenditures :
1. Revenue Expenditure : (Recurring)
 Salaries
 Various on going operations
 Interest payments
2. Capital Expenditure : (Non-recurring & for Long term)
 Repayment of Debts
 Constructing highways (for economy boost)
Note: It's said that, every 100 Rs spent money that spent in Revenue Exp, it will give less than 100 Rs, where as the Capital Exp will give
more than 250 Rs to economy.

16. Fiscal Deficit & Fiscal Consolidation
Fiscal Consolidation : It is just an
act or measures to control Fiscal
Deficit
More Fiscal Deficit will create
Economic nightmares to the
countries, which eventually
makes country to take more
loans.

17. FY 2022-23 Analysis :
Govt Spendings : Rs. 39,44,909 Cr.
Govt Revenue : Rs. 22,83,713 Cr.
Fiscal Deficit : Rs. 16,61,196 Cr.

18. Govt. Have taken Loans from

19. Revenue V/S Expenditure
CREDIT : moneycontrol.com

20. Why RBI, don't print more money?
To Repay it's debt?
To make everybody rich?
To boost economy?

21. Wonderful case study to understand everything at
Glance : Zimbabwe Economic Crisis (2008-09)
In 2008, in every 24 hours, the goods value used
to double.
People used to carry a bag of cash, just to buy a
bread or egg
People used to have million zimbabwe dollars, no
use, they can't even buy a chocolate with that
amount of money.
The amount of money doesn't make a country
rich.

22. Here we end our seminar!!!
Important Takeaway : If you have a tree, which is producing money for you every
day. That money value worth value of leaves.