Are monetary and fiscal policies the answer to India’s problems?
By: Hanaa Metwalli May 11th, 2019
Monetary policy is the action of controlling the supply of money in the economy by controlling interest rates. This is done by monetary authority of a country in order to maintain price stability and aim towards a high economic growth. In India, the central monetary authority is the Reserve Bank of India (RBI). Other objectives of the monetary policy of India, as stated by RBI, are:
Price stability: concerned with promoting economic development while emphasising on price stability
Promoting Efficiency: It is another fundamental aspect where the national banks give a ton of consideration. It tries to increase the efficiency in the financial system, and tries to incorporate structural changes such as deregulating interest rates, easing operational constraints in the credit delivery system, introducing new money market instruments, etc.
Restriction of Inventories and stocks: Packing of stocks and items getting to be obsolete because of abundance of stock regularly results in ailment of the unit. To maintain a strategic distance from this issue, the focal money related expert does this fundamental capacity of confining the inventories. The fundamental goal of this arrangement is to maintain a strategic distance from over-stocking and inert cash in the association.
Fiscal policy is concerned with the taxation and expenditure decisions made by the government. Some of the major aspects of this policy typically include Budget, Taxation, Public Expenditure, public revenue, Public Debt, and Fiscal Deficit in the economy. In India, the fiscal policy is picking up its significance as of late with the developing contribution of the administration in formative exercises of the nation. The main objectives of fiscal policy in India include the following: to maintain and achieve full employment, to stabilize price level, and to stabilize the growth rate of the economy.

















