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 the supply of goods to meet demand surge caused by rapid economic growth.
- It is an intense affirmative action of the Government to boost economic activity in the country.
- It is the 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.
- It is an extreme affirmative action by the government to pursue its policy of financial inclusion.
Explanation
Option (b) is correct
- A fiscal stimulus refers to government measures, typically involving increased public spending and/or tax cuts, aimed at boosting economic activity during a slowdown or recession. It increases demand, creates jobs, and encourages investment. Common fiscal stimulus measures include infrastructure spending, direct cash transfers, tax reductions, and subsidies.
- While it can indirectly support financial inclusion, its primary goal is economic revival.
