FISCAL POLICY

The Digital India Programme is a flagship initiative of the Indian government aimed at harnessing the power of technology to transform India into a digitally empowered society and knowledge economy. Launched in 2015, the program encompasses various initiatives across various sectors, including: Key objectives: Major initiatives: Challenges: Despite its ambitious goals, the Digital India Programme […]

Special Drawing Rights (SDR) are a special drawing privilege granted to certain countries to reflect their unique economic circumstances. This privilege allows these countries to draw additional allocations of International Monetary Fund (IMF) quota shares beyond their normal quota entitlement. Here’s a breakdown of key points regarding SDRs: Participating countries: Additional allocations: Eligibility: Impact: Recent […]

Open market operations (OMO) are monetary policy tools used by central banks to influence interest rates and liquidity in the banking system. The central bank, acting as the lender of last resort, can influence market interest rates either by buying or selling government securities in the open market. Key Features of OMO: 1. Trading of […]

Definition: A fiscal deficit occurs when the government’s expenditures exceed its revenues. It is a situation where the government spends more money than it takes in from taxes and other sources. Causes: High expenditures: Increased spending on programs such as social security, defense, and infrastructure. Low revenues: Insufficient tax revenue or declining economic growth. Economic […]

Implementation Lag Implementation lag refers to the time delay between the design of a software system and its actual implementation. It is a common phenomenon in software development projects, where the time required for implementation often exceeds the time estimated during the design phase. Causes of Implementation Lag: Unclear requirements: Incomplete or poorly defined requirements […]

Expansionary Fiscal Policy Expansionary fiscal policy refers to a set of government policies that aim to increase aggregate demand by increasing government spending or reducing taxes. Key Components of Expansionary Fiscal Policy: 1. Increase Government Spending:– Allocates more funds to infrastructure projects, social programs, or military spending.- Creates additional demand for goods and services. 2. […]

Definition: Subsidy is a payment made by a government or other organization to a person or corporation to encourage or discourage certain behavior. Types of Subsidies: Direct subsidies: Cash payments or other forms of direct financial assistance from the government to individuals or businesses. Indirect subsidies: Government actions that reduce the cost of production or […]

Fiscal neutrality is a principle that aims to ensure that changes to the tax system do not have any significant impact on economic growth or inflation. It involves keeping the overall tax burden relatively constant while adjusting the tax rates on different income sources and assets to achieve a desired distribution of income. Key principles […]

Legal Tender Legal tender is a type of currency that is legally recognized by a particular country as a medium of exchange. It is a currency that is officially sanctioned by the government and is widely accepted as payment for goods and services within the country. Characteristics of Legal Tender: Officially sanctioned: Backed by the […]

Financial Stability Plan (FSP) The Financial Stability Plan (FSP) is a comprehensive framework developed by the Group of Twenty (G20) to address the global risks posed by the interconnectedness of financial systems. It aims to enhance the resilience of global financial systems and mitigate the potential impact of financial shocks on the global economy. Key […]