What is “Fiscal Policy”? Why some economists consider fiscal policy to be more reliable than the monetary p?
Fiscal Policies are economic policies made by the Government of a Country. Whereas the Monetry Policies are those economic policies decided by the Central Bank. In India, Fiscal policy decision authority lies with GOI and Monetry policies with RBI. In a mixed economy like India, where neither 100% capitalization nor complete public control exists, there is always a divide on who regulates better. Some talk in favour of Privatisation while some insist Public Sector Predominance is a key to successful economy. Now coming to your question as to why Fiscal Policies are considered superior, that is because, 75% of Indian Population resides in Rural areas. This majority population considers Privatisation as a root cause of socio-economical in-equality. For them Central Bank is also a part of this section of sophisticated sector which promotes Capitalism. Hence the common belief in India among the rural masses goes against the Central Bank thereby reposing greater confidence on the Government
