Indian Economy / Fiscal System
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Fiscal system of any country is nothing but the comprehensive structure of Government's revenues and expenditures and the organizational framework within which the Government agencies gather and disburse such funds.
There are four components in fiscal system namely, Taxation, Public Debt, Deficit Financing and Public Expenditure.
It is nothing but filling up the gap between the revenue and the expenditure by borrowing from RBI through the Treasury Bills, which are being
auctioned by Reserve Bank Of India.
At present, they are having 91 days, 182 days and 364 days of maturity. It is one of the easy source of
money and has shown alarming growth trend. It will cause inflation.
It is the expenditure that is made by the Government. Expenditure incurred on infrastructure, basic industries and irrigation projects is desirable.
Non-plan expenditures like interest payments, administrative expenses, subsidies, etc. have been on the rise which looks a cause of concern.
The important objectives of FRBM Act are