Topic Details (Notes format)

Fiscal Policy and Budget

Subject: Economics

Book: Comprehensive Indian Economy

Fiscal policy involves government spending, taxation, and borrowing to steer the economy. In India, the annual Union Budget outlines revenue and expenditure plans, revealing priorities for sectors like infrastructure, agriculture, and social welfare. Concepts like revenue deficit, fiscal deficit, and primary deficit are central to gauging fiscal health. The Fiscal Responsibility and Budget Management (FRBM) Act sets targets to maintain fiscal discipline. Exam readiness requires clarity on how changes in tax structures—like GST—and public spending shape economic growth, plus an understanding of how deficits are managed through market borrowings and bond issuances.

Practice Questions

What does the “Phillips Curve” show?

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What is the term for the ability of an economy to produce more output from the same inputs?

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What is the significance of “Purchasing Power Parity” (PPP)?

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What is the objective of the Pradhan Mantri Jan Dhan Yojana?

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What is the primary function of the International Monetary Fund (IMF)?

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Which of the following factors is NOT included in the calculation of Human Development Index (HDI)?

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What is the primary purpose of Special Economic Zones (SEZs)?

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Which of the following best describes “capital formation”?

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What is meant by “credit rating”?

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Which of the following sectors contributes the most to India’s GDP?

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