JAIIB | IE AND IFS | FISCAL POLICY- CASE STUDY

The Junior Associate of Indian Institute of Bankers (JAIIB) exam provides essential insights into the functioning of the Indian economy and the Indian financial system, particularly in understanding the role of fiscal policy. Fiscal policy is a key tool used by the government to influence the economy through government spending and taxation. Learning Sessions provides this article on case study that explores the impact of fiscal policy on the Indian economy and financial system, featuring key elements such as budget deficits, public debt, and the relationship between fiscal measures and economic growth.

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India’s fiscal policy is primarily announced in the Union Budget, presented annually by the Ministry of Finance. Fiscal policy refers to the government’s use of expenditure and revenue collection (taxes) to influence the country’s economy. The two main components of fiscal policy are:

-Government Spending

-Revenue Collection

The role of Fiscal Policy in the Indian Economy (IE) and Indian Financial System (IFS) are:

1. Stimulating Economic Growth
2. Managing Inflation
3. Addressing Fiscal Deficits
4. Taxation Reforms and Revenue Generation
5. Impact on the Financial System

Key Objectives of India’s Fiscal Policy are through progressive taxation and targeted welfare spending, fiscal policy helps to redistribute wealth and reduce income inequality. India has been working toward fiscal consolidation—reducing the fiscal deficit as a percentage of GDP. Fiscal policy also focuses on managing public debt sustainably. Excessive debt can lead to expansion pressures and a loss of investor confidence in the economy. A key component of India’s fiscal policy has been the focus on basic development, like investments in roads, ports, airports, and energy projects have been prioritized. For the extensive preparation of candidates, get details through our YouTube videos for JAIIB IE & IFS Module wise Syllabus with explanations and tips to help candidates in their preparation journey.

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To conclude, India’s fiscal policy is a constitutional tool in shaping the Indian economy and financial system. Learning Sessions’ experienced tutors provide understanding on how the government uses taxation, spending, and borrowing to achieve economic objectives, by which JAIIB candidates can better grasp the link between fiscal policy and broader financial stability. Learning Sessions provides additional information about JAIIB IE & IFS Market of Economy  by giving examples of real life scenarios.

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