FULL EMPLOYMENT it simply means that man power is ready to work at a prevailing wage rate without any dispute. PRICE STABILITY another objective is price stability when price rises i.e. inflation exists in an economy, fiscal policy aims at decrease in demand and aggregate expenditure and tax rate is also raised. extra purchasing power of people goes into hands of general public and demand decreases because of excess supply, prices automatically go down because of fear of stocks.

TAXTION POLICY every government earn through taxes. Taxes are very important and major source of government revenues. the effects of taxes on demand depends upon taxation multiplier GOVERNMENT EXPENDITURE public expenditure bears an important effect on aggregate demand. if government expenditure increases, aggregate demand increases and vice versa. These are two types. =for attainment of goods and services. =public expenditure for pension, education, health etc. it is also known as transfer expenses.

=Fiscal policy has played a very important role in raising the rate of capital formation in country in private as well as public sector. =It has mobilized resources through taxes, savings, public debt etc. =Tax concession, cash subsidies exemption in taxes have been given as incentives to private sectors unit set up in backward areas and export oriented units. =Various incentives have been given to raise the rate of savings in households and corporate sectors.

+ Tax system was not so much elastic to earn more revenue because of huge tax evasion. + Although each and every part is not awarded in terms of money, but still a major part of economy of UDC’s like India is not monetized. In the part fiscal policy remains unaffected. + Because of non availability of reliable and accurate data, the area of fiscal policy is not judged properly. + Due to illiteracy + Fiscal policy affected in few sectors of the economy.

1) Improving tax administration to raise larger revenues. 2)Reducing subsidies 3) Downsizing of government 4) Privatization 5) Reprioritize plan schemes 6) Changes to the agricultural taxation 7) Check on black money 8) Public sector performance to be improved.

Inland Revenue Income Tax (gross of tax credits) Income Tax Credits Corporation Tax Windfall Tax Petroleum Revenue Tax Capital Gains Tax Inheritance Tax Stamp Duties NICs Total Inland Revenue Government Income ( billion)

Government Income –