Fiscal policy: Tool for economic stability and growth
In the realm of economics, fiscal policy plays a pivotal role in shaping a country's economic landscape. While monetary policy falls under the purview of the Reserve Bank of India (RBI), fiscal policy is primarily in the domain of Finance Ministry. Fiscal policy deals with following activities: Revenue management Expenditure management Borrowing strategies All these activities are aimed at mobilizing resources, fostering growth, reducing inequality, and stabilizing the economy. In this article, we delve into the intricacies of fiscal policy. The Union budget is prepared in two heads namely revenue account and capital account of the budget. Revenue account contains revenue receipts and revenue expenditure while the capital account contains capital receipt and capital expenditure. Let's see what these accounts actually mean. Revenue receipts : Revenue receipts are the day-to-day earnings of a government, and the source these income can be from taxation or from the services th