MACRO ECONOMIC

2. Presented by:
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ZIA UL HAQUE
HINA ILYAS
SUNDAS ZAHRA
HAMMAD QAYYUM
MEHWISH MAQSOOD

3. INTRODUCTION
• The term fiscal policy refers to the
expenditure a government undertakes to
provide goods and services and to the way in
which the government finances these
expenditures.

4. What is a Fiscal Policy?
According to Samuelson,
• Fiscal Policy is concerned with all those
arrangements which are adopted by the
Government to collect the revenue and make
the expenditures so that economic stability
could be attained/maintained without
inflation and deflation´

5. Objectives
• Mobilization of resources
• Acceleration of Economic growth
• Minimizes the inequalities of income and
wealth
• Increase the Employment opportunities
• Price stability

6. Objectives
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Balanced regional development
Reducing the deficit in the balance of payment
Increasing National income
Foreign exchange earnings

7. Tools
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Budgetary surplus
Government expenditure
Taxation-Direct and indirect
Public debt
Deficit financing

8. Budgetary surplus
• A budget is a detailed plan of operations for
some specific future periods

9. Government expenditure
• It includes:
-Government spending on the purchase of
goods and services
-payments of wages and salaries of
government servants
-public investments
-transfer payments

10. Taxation
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Meaning : Non quid pro quo transfer of
private income to public coffers by means of
taxes.
Classified into
1. Direct taxes- Corporate tax, Div. Distribution
Tax, Personal Income Tax, Fringe Benefit
taxes, Banking Cash Transaction Tax
2. Indirect taxes- Central Sales Tax, Customs,
Service Tax, excise duty.

11. Public debts
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Internal borrowings
1. Borrowings from the public by means of treasury
bills and govt. bonds
2. Borrowings from the central bank (monetized
deficit financing)
• External borrowings
1. foreign investments
2. international organizations like World Bank
& IMF
3. market borrowings

12. Role of Fiscal policy in economic
development of PAKISTAN
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Capital formation
Increase the rate of investment
Encourage socially optimal investment
Economic stability
Counteract inflation
Flow of investment to socially desirable
channels
• Checks imbalance in various sectors
• Reduce inequality of income and wealth

13. •THANK YOU!