Which one of the following statements appropriately describes the “fiscal stimulus”?

It is a massive investment by the Government in the manufacturing sector to ensure that the supply of goods meets the demand surge caused by rapid economic growth.

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It is an intense affirmative action of the Government to boost economic activity in the country.

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It is Government’s intensive action on financial institutions to ensure disbursement of loans to agriculture and allied sectors to promote greater food production and contain food inflation.

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It is an extreme affirmative action by the Government to pursue its policy of financial inclusion.

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Solution

The correct option is B
It is an intense affirmative action of the Government to boost economic activity in the country.

Fiscal stimulus is a measure taken by the government to boost spending and the growth of the economy.

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Q. The government initiated a variety of policies in new economic policy which fall under three headings:
(i) Liberalisation
(ii) Privatisation
(iii) Globalisation

Liberalisation means removing all unnecessary controls and restrictions like permits, licences, quotas, etc. imposed by the government. Liberalisation concept were introduced for the following reasons:
(i) To unlock the economic potential of the country by encouraging the private sector and multinational corporations to invest and expand.
(ii) To encourage the private sector to take an active part in the development process.
(iii) To reduce the role of the public sector in the future industrial development.
(iv) To introduce more competition into the economy with the aim of increasing efficiency.

The economic reforms under liberalisation taken by the government include the following:
(i) Industrial Sector Reforms
(ii) Financial Sector Reforms
(iii) Tax Reforms
(iv) Foreign Exchange Reforms
(v) Trade and Investment Policy Reforms

Industrial Sector Reforms
The new policy abolished the requirement of obtaining a licence for all industries except alcohol, cigarettes, hazardous chemicals, industrial explosives, electronics, aerospace, and drugs and pharmaceuticals. Licence is no longer required to set up new units or to expand the existing one.

Under the new industrial policy, the number of industries reserved only for the public sector was reduced from 17 to only 3.
It is only (i) Defense equipment (ii) Atomic energy generation (iii) Railway transport.Read the following statements - Assertion (A) and Reason (R) and choose the correct answer from the following:
Assertion (A)- Liberalisation concept to encourage the private sector to take active part in the development process.
Reasons (R) - Industrial Sector Reforms and Financial Sector Reforms were taken by the government under liberalisation.

[0.80 marks]

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Which one of the following statements appropriately describes the “fiscal stimulus”?

The correct option is B It is an intense affirmative action of the Government to boost economic activity in the country. Fiscal stimulus is a measure taken by the government to boost spending and the growth of the economy.

The correct option is B
It is an intense affirmative action of the Government to boost economic activity in the country.

Fiscal stimulus is a measure taken by the government to boost spending and the growth of the economy.