1. Why is the knowledge of Fiscal Policy important to a
Retail Banker and it’s impacts on sales pitch. Substantiate
with an Investment option.
Faculty name - Vishwanathan
center – Hyderabad
Batch No – hyd01aa0213
Participant name
Participant ID
S.KARTHIK GOUD
E30031000148
T.PRAVEEN
E30031000114
SANDEEP
E30031000119
ANURAG
E30031000113

2. INDEX
1
Fiscal Policy
2
Objectives
3
Functions
4
Types of Fiscal Policies
5
Limitations
6
Factors affecting fiscal policy
7
Fiscal Deficit
8
Why it is important to a Retail Banker
9
Impacts on sales pitch & examples
10
Current trend on Fiscal policy

3. Introduction
Definition :Fiscal Policy refers to a policy under which
government uses it’s expenditure and revenue programs
to produce desirable effects on national
income, production and employment

4. Fiscal can be explained as Financial ,so a policy in
relation to finance and something similar to monetary
policy
 Now a Monetary policy is formed by RBI and the
Fiscal policy is formed by central government
The main aim of the policy is to see the three facets of
financial system are healthy i.e. public debt, public
revenue, public expenditure

5. Objectives
 Economic growth
 Full Employment
 Reducing inequalities of income and wealth
 Controlling inflation
 Price stability

6. Functions
• Allocation
• Distribution
• Stabilization
• Development

7. Types of Fiscal policy
Expansionary Fiscal Policy
 An increase in government expenditure for
goods and services
 A decrease in taxes
 Some combination of two
Contractionary Fiscal Policy
 A decrease in government expenditure
for goods and services
 An increase in taxes

8. Expansionary fiscal policy

9. Contractionary fiscal policy

10. Difference between fiscal policy and
monetary policy

11. Limitations
•
•
•
•
Lack of adequate data
Time lag
Budget deficit
Small proportion of population in taxable
income groups

12. Factors affecting fiscal policy
 Tax policies
 Government subsidies
 Government borrowings, lending's &
investments

13. Fiscal Deficit
 The expenses that the government incurs is
always more than the income it makes, this
difference or deficit is known as “ Fiscal Deficit”
 It is expressed as a percentage of GDP
 The financing of this deficit is known as
“Deficit Financing”

14. Why it is important to a Retail Banker ?
It will help a retail banker in determining:• Selection of Investment product.
• Market behavior.
• Product yield / Returns.
• Risk diversification.

15. EXAMPLES ?

16. COMPANY LAST CHANGE OPEN
NAME
PRICE (%)
National
Highways
Authority
of India
999.50
Canara-rob Debt
equity-tax fund
saver fund
0.26%
0.25
997.00
0.39
HIGH YEILDING FD”S
HIGH
999.50
LOW
VOLUMEFACE
VALUE
992.00
12081
17.74
Interest Rates
ICRA
CRISI
L
FITCH
CARE
1 YEAR
2 YEAR
3 YEAR
MAAA
FAAA
N/A
N/A
8.90%
9.05%
9.15 %
1,000

17. Current trend on Fiscal Policy
 Deficit level in india is better than many democratic
countries
 Government plans to bring down Fiscal deficit to 3 % of
GDP by 2016-17
Present fiscal deficit 6.1 % of GDP
Fiscal deficit of 5.3 % in my view is doable – FINANACE
MINISTER
Fiscal deficit target of 5.3 % hard to achieve – MOODY
High fiscal deficit is a threat for sovereign rating