10.2 Objectives of Fiscal Policy

10.2  Objectives of Fiscal Policy:

In India, the fiscal policy is gaining its importance in recent years with the growing involvement of the government in developmental activities of the country.

Following are some of the important objectives of fiscal policy adopted by the Government of India:

1. To mobilise adequate resources for financing various programmes and projects adopted for economic development.

2. To raise the rate of savings and investment for increasing the rate of capital formation;

3. To promote necessary development in the private sector through fiscal incentive;

4. To arrange an optimum utilisation of resources;

5. To control the inflationary pressures in economy in order to attain economic stability;

6. To remove poverty and unemployment;

7. To attain the growth of public sector for attaining the objective of socialistic pattern of society;

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8. To reduce regional disparities; and

9. To reduce the degree of inequality in the distribution of income and wealth.

In order to attain all these aforesaid objectives, the Government of India has been formulating its fiscal policy incorporating the revenue, expenditure and public debt components in a comprehensive manner.