{"id":124029,"date":"2021-08-06T19:36:03","date_gmt":"2021-08-06T14:06:03","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=124029"},"modified":"2021-08-11T16:25:51","modified_gmt":"2021-08-11T10:55:51","slug":"fiscal-action-by-the-centre-must-take-over-from-monetary-policy","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/fiscal-action-by-the-centre-must-take-over-from-monetary-policy\/","title":{"rendered":"Fiscal action by the Centre must take over from monetary policy"},"content":{"rendered":"

Source<\/strong>: Livemint<\/a><\/span><\/p>\n

Relevance<\/strong>: Importance of fiscal policy measures to promote economic growth<\/p>\n

Synopsis<\/strong>: Monetary policy has done its part, both through rate cuts and other forms of support, to get our economy going. Now, it\u2019s the turn of India\u2019s fiscal authority to step up efforts to promote growth.<\/p>\n

What is fiscal policy?<\/strong><\/h5>\n

Fiscal policy\u00a0is the means by which a government adjusts its spending levels and\u00a0tax rates to monitor and influence a nation’s economy.<\/p>\n

Required fiscal policy actions<\/b><\/h5>\n

Fiscal policy actions are needed in these areas:<\/p>\n

    \n
  1. On vaccination programme: <\/strong>There is need for ramping up of speed of vaccination twice at present and the central budgetary allocation of Rs 30000 crore should be treated as floor rather than cap.<\/li>\n
  2. On Export: <\/strong>Exports are foremost at a time when world growth is projected at 6%. Indian merchandise exports touched a sensational $95 billion in the first quarter (April to June) of the current year.<\/li>\n
  3. On Central expenditure on transfers to states<\/strong>, which could face procedural obstacles.<\/li>\n<\/ol>\n
    Issues faced by Export sector<\/strong><\/h5>\n
      \n
    1. Levies outside the GST<\/strong> affect the exporter, such as on universal inputs like electricity, petroleum and diesel, affect the rupee price of exports.<\/li>\n
    2. Issues with RODTEP<\/strong>\n