Beruflich Dokumente
Kultur Dokumente
By
Darshita Shah
content
Brief about Fiscal Deficit
Objectives of Fiscal Policy
Components of Fiscal Deficit
Trends
At global level
Measures
conclusion
Brief about Fiscal Deficit
q The term ‘fisc’ means treasury thus fiscal policy means policy related to treasury.
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q Fiscal policy comprises of public revenue , public expenditure and public debt.
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q It has important place in modern times particularly after the great economic
depression of thirties.
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q The Fiscal deficit is the difference between the government’s total expenditure
and its total receipts.
Components of fiscal deficit
ü Revenue Receipts
• Tax revenue
• Non Tax revenue
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ü Capital Receipts
• Recovery of loan
• Other receipts
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ü Total Expenditure
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• Plan and non plan expenditure
Trends
In 15years of period from 1975-90 fiscal deficit
goes rose from 4.7% to 7.9% of GDP
Non plan revenue expenditure on defense,
interest payments, food and fertilizer subsidies
rose sharply in 1980s
Reforms were taken up from the year 1991 to
restore the fiscal deficit.
Trends
Corporate taxation initiated
Oil shocks in 1973 and 1979
Exemption on agricultural income in 1974
Subsidy rose sharply during 1980s
MODVAT in 1986
BOP crisis
Revenue Receipts ( in %)
Expenditure ( in %)
Fiscal deficit 1960-1990
1990 to 2009
q Reforms
q LPG
q Kargil war
q The undue debt burden is crippling
q NCMP policy (2004-05)
q Farmer’s loan waiver
q Sixth pay commission
q High inflation
q Global crisis
Revenue & Expenditure
China (3.4%)
Indonesia (0.8%)
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The Largest Fiscal Deficit among World’s Major Economies
Measures
Thank you
Bibliography