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Fiscal Policy
Fiscal policy is the government’s decisions about taxation, spending and borrowing. Cutting taxes or raising spending supports growth; raising taxes or cutting spending cools the economy and reduces borrowing.
Why It Matters
Monetary policy is the RBI’s job; fiscal policy is Parliament’s and the Finance Ministry’s.
In India
The 2025 GST cuts and income tax relief were expansionary fiscal policy, aimed at boosting household spending.
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