{"id":115250,"date":"2021-06-28T19:01:37","date_gmt":"2021-06-28T13:31:37","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=115250"},"modified":"2021-07-01T11:54:42","modified_gmt":"2021-07-01T06:24:42","slug":"quality-focus-to-help-in-setting-humane-fiscal-policy-rbi-study","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/quality-focus-to-help-in-setting-humane-fiscal-policy-rbi-study\/","title":{"rendered":"Quality focus to help in \u2018setting humane fiscal policy\u2019: RBI study"},"content":{"rendered":"\n<h5><b><span data-contrast=\"none\">What is the News?<\/span><\/b><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/h5>\n<p><span data-contrast=\"none\">A Reserve Bank of India study has said that the formal weaving of quality targets into the fiscal consolidation paths would result in setting fiscal pol<\/span><span data-contrast=\"auto\">icy with a &#8220;human face&#8221;.<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<p><b><span data-contrast=\"none\">Key Facts mentioned in the Article:<\/span><\/b><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<h5><b><span data-contrast=\"none\">About Cyclical Fiscal Policy:<\/span><\/b><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/h5>\n<ul>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"40\" aria-setsize=\"-1\" data-aria-posinset=\"68\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Cyclicality of the fiscal policy\u00a0<\/span><\/b><span data-contrast=\"none\">simply refers to a change in direction of government expenditure and taxes based on economic conditions.\u00a0<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"40\" aria-setsize=\"-1\" data-aria-posinset=\"69\" data-aria-level=\"1\"><b><span data-contrast=\"none\">There are two types\u00a0<\/span><\/b><span data-contrast=\"none\">of c<\/span><span data-contrast=\"auto\">yclical fiscal policies &#8211; counter-cyclical and procyclical.<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<h5><b><span data-contrast=\"none\">What is Counter Cyclical Fiscal Policy?<\/span><\/b><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/h5>\n<ul>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"39\" aria-setsize=\"-1\" data-aria-posinset=\"70\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Counter-cyclical Fiscal Policy\u00a0<\/span><\/b><span data-contrast=\"none\">refers to the steps taken by the government that go against the direction of the economic or business cycle.<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"39\" aria-setsize=\"-1\" data-aria-posinset=\"71\" data-aria-level=\"1\"><b><span data-contrast=\"none\">This means that<\/span><\/b><span data-contrast=\"none\">\u00a0during a recession or slowdown, the government increases expenditure and reduces taxes to create a demand that can drive an economi<\/span><span data-contrast=\"auto\">c boom.\u00a0<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"39\" aria-setsize=\"-1\" data-aria-posinset=\"72\" data-aria-level=\"1\"><b><span data-contrast=\"none\">On the other hand,<\/span><\/b><span data-contrast=\"none\">\u00a0<\/span><span data-contrast=\"auto\">during a boom in the economy, the policy aims at raising taxes and cutting public expenditure to control inflation and debt.<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<h5><b><span data-contrast=\"none\">What is pro-cyclical fiscal policy?<\/span><\/b><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/h5>\n<ul>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"38\" aria-setsize=\"-1\" data-aria-posinset=\"73\" data-aria-level=\"1\"><b><span data-contrast=\"none\">In a pro-cyclical fiscal policy,\u00a0<\/span><\/b><span data-contrast=\"none\">the government reinforces the bus<\/span><span data-contrast=\"auto\">iness cycle by being expansionary during good times and contractionary during recessions.\u00a0<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"38\" aria-setsize=\"-1\" data-aria-posinset=\"74\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Pursuing a pro-cyclical fiscal policy\u00a0<\/span><\/b><span data-contrast=\"none\">is generally regarded as\u00a0dangerous.It\u00a0could raise macroeconomic volatility, depress investment in real and human capital, hampe<\/span><span data-contrast=\"auto\">r growth and harm the poor.<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><b><span data-contrast=\"none\">What is Fiscal Deficit?<\/span><\/b><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"37\" aria-setsize=\"-1\" data-aria-posinset=\"75\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Fiscal deficit\u00a0<\/span><\/b><span data-contrast=\"none\">is the gap between total expenditure and total income of the government.\u00a0<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"37\" aria-setsize=\"-1\" data-aria-posinset=\"76\" data-aria-level=\"1\"><b><span data-contrast=\"none\">The fiscal deficit\u00a0<\/span><\/b><span data-contrast=\"none\">can arise either due to revenue expenses overshooting income or increase in capital expenditure<\/span><span data-contrast=\"auto\">.\u00a0<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"37\" aria-setsize=\"-1\" data-aria-posinset=\"77\" data-aria-level=\"1\"><b><span data-contrast=\"none\">The fiscal deficit\u00a0<\/span><\/b><span data-contrast=\"none\">matters because it indicates the extent by which government spending exceeds its income and the total borrowings needed by it to fill this gap.\u00a0<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"37\" aria-setsize=\"-1\" data-aria-posinset=\"78\" data-aria-level=\"1\"><b><span data-contrast=\"none\">A fiscal deficit\u00a0<\/span><\/b><span data-contrast=\"none\">is usually calculated and expressed as a percentage of a country\u2019s Gross\u00a0<\/span><span data-contrast=\"auto\">Domestic Product (GDP).<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<h5><b><span data-contrast=\"none\">What is Gross Fiscal Deficit?<\/span><\/b><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/h5>\n<ul>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"36\" aria-setsize=\"-1\" data-aria-posinset=\"79\" data-aria-level=\"1\"><b><span data-contrast=\"none\">The gross fiscal\u00a0deficit(GFD)\u00a0<\/span><\/b><span data-contrast=\"none\">is the excess of total expenditure including loans net of recovery over revenue receipts (including external grants) and non-debt capital receipts.<\/span><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><b><span data-contrast=\"none\">What is Revenue Deficit?<\/span><\/b><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\u00b7\" data-font=\"Symbol\" data-listid=\"35\" aria-setsize=\"-1\" data-aria-posinset=\"80\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Revenue Deficit\u00a0<\/span><\/b><span data-contrast=\"none\">denotes the difference between revenue receipts and revenue expenditure.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><b><span data-contrast=\"none\">Source:\u00a0<\/span><\/b><a href=\"https:\/\/indianexpress.com\/article\/business\/quality-focus-to-help-in-setting-humane-fiscal-policy-rbi-study-7378679\/\"><b><span data-contrast=\"none\">Indian Express\u00a0<\/span><\/b><\/a><span data-contrast=\"none\">\u00a0<\/span><span data-ccp-props=\"{&quot;335551550&quot;:6,&quot;335551620&quot;:6,&quot;335559739&quot;:160,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>What is the News?\u00a0\u00a0 A Reserve Bank of India study has said that the formal weaving of quality targets into the fiscal consolidation paths would result in setting fiscal policy with a &#8220;human face&#8221;.\u00a0\u00a0 Key Facts mentioned in the Article:\u00a0\u00a0 About Cyclical Fiscal Policy:\u00a0\u00a0 Cyclicality of the fiscal policy\u00a0simply refers to a change in direction&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/quality-focus-to-help-in-setting-humane-fiscal-policy-rbi-study\/\">Continue reading <span class=\"screen-reader-text\">Quality focus to help in \u2018setting humane fiscal policy\u2019: RBI study<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1566,3127,9],"tags":[],"class_list":["post-115250","post","type-post","status-publish","format-standard","hentry","category-daily-factly-articles","category-economy","category-public","entry"],"jetpack_featured_media_url":"","views":{"total":0,"cached_at":"","cached_date":1704870812},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/115250","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=115250"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/115250\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=115250"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=115250"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=115250"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}