Fiscal Policy

Fiscal Policy: Concept

Governmental financial policies and operations, concerning the raising and disbursement of funds, influence the economic behaviors and activities, and so the national income, employment, income distribution, price situation, international trade, etc. This realization has led to make deliberate adjustments in governmental income and expenditure policies and programs to attain the economic objectives. Such an adjustments is called the fiscal policy. So fiscal policy is concerned with the adjustments in the operation of the treasury to solve and attain economic problems and objectives.

Planning Programming Budgeting System (PPBS)

Planning Programming Budgeting System: Background

The traditional budgeting system (i.e. the Line-Item and Incremental) has been unsuitable and ineffective in the effective utilization of limited governmental resources as well as in the context of planning. There are some shortcomings or weaknesses of the traditional budgeting system as follows:
  1. emphasize on the objectives of control and accountability rather than allocation of limited resources on programmes and projects;
  2. provides information on the objects of expenditures, not the objectives of expenditure;
  3. does not help in analyzing and assessment of the impact of budget on the economy;
  4. emphasize on the incremental approach without due consideration of the necessity;
  5. emphasize on the financial performance rather than the physical;
  6. does not relate the current expenditure with the future budgetary repercussions