Expectations And The New Government

India’s economy is booming! With large decreases in poverty, increases in literacy and GDP, India is continuing to make its way out of the third world and into the first. India is predicted to surpass even China in growth by 2050. A competitive private capital market has instilled Indians with a low cost high quality mentality and has resulted in some of the highest return rates for any country. India has been averaging 6% growth compared to China’s 9.5% with half the investments. India capital efficiency is one of its strongest economic benefits.

An indication of the overall impact of fiscal policy (FP) on the state of the economy is the fiscal outcome. The three possible outcomes include a fiscal surplus (positive balance where government expenditure exceeds revenue), fiscal deficit (a negative balance where government revenue exceeds expenditure), and fiscal balance (a zero balance where total government revenue equals expenditure). The main aim of fiscal policy is to achieve fiscal balance, on average, over the course of the economic cycle. The Howard Government targeted a fiscal surplus of 1% of GDP, whereas the current Rudd Government has raised this target to 1.5% of GDP,

The Indian economy following the 1991 crisis swiftly moved away from central planning economy towards market-based economy with the government having less intervention and control. As a result, companies were operating in what is called emerging

From 2003-2004 to 2006-2007, annual Real Growth Rate increases from 8.4% to 9.7%. Because of the summer’s credit-market crisis, the Indian GDP Growth decrease to 9.0% from 2007 to 2008 and Indian government estimates GDP Growth for 2008-2009 is 7.1%. The decrease of GDP ascribes the global financial crisis which affects India primarily through trade and capital outflows (The World Bank, 2008:16). On trade, exports are possible to weaken and make its contribution to GDP growth may be drop sharply. However, during

This ambitious agenda, aims to reduce federal spending and balance the budget within 10 years.

policies had led to a budget surplus and had shrunken the federal deficit to its lowest level

This will be beneficial in the long term because private sector will increase investment in capital goods, which is an injection into the circular flow of income and will also lead to a shift of the LRAS to the right. Secondly, the extent to which, if at all, cuts in public spending are unavoidable given the size of the budget deficit, so I feel that the government addressing this through cuts on public expenditure is a positive. Although, I do believe to some that significant cuts in some areas may lead to disruption and there may be some alternates such as increasing taxation and their relative merits.

The UK coalition government started their fiscal consolidation (concentrates on reducing government deficits and debt accumulation, i.e. national debt) towards the end of 2010 when the Labour government’s fiscal stimulus package was abandoned. The first act by the newly appointed coalition government was to cut spending and to increase indirect taxes, which involved increasing the main rate of VAT from 17.5% to 20% from the beginning of 2011. However, increasing tax and reducing government spending have advantages and disadvantages.

In the novel, Brave New World the government has an interesting way of ruling its citizens as they destroys all historical events and experiences such as love, friendships, freedom reproduction, way of learning and other personal interconnections as the world controller Mustapha Mond says, “you all remember, I suppose, that beautiful and inspiring saying of Our Ford’s: History is Bunk” (Huxley 34). The World State treats all its citizens as children by giving them quick satisfaction when contradicting their responsibility. The director gives every citizen a specific social function before they are created and put into one of the five castes which forces the citizens to use a drug like soma repeatedly and to be interested in strong sexual desires,

India’s economy is one that appears to be on the brink of a major recession. Their central bank has made bad choices over the last number of years. This has lead to a low growth within the country and a high inflation rate. They changed their political leadership to someone who was more open to change and reform, but this has not come about. India reformed its tax system, which they believed would be the key to success in the country. This in fact caused the opposite. The economy slowed down sharply. They banned the sale of cows in India due to religions reason and this stopped the growth of agriculture as this was a huge export for the country. India has about 12 million new young people enter its job market each year and finding jobs for this vast quality of people is a hinderance for the country and yet another driving factor for lower growth. India expects the initial impact of their tax reform to be over and now they will see a stabilization of their economy. It is believed their economy will now grow in small increments due to this stabilization.

Expansionary fiscal policy results in a reduction of taxes and increased government spending and therefore increasing the demand level in an economy. The institution of expansionary fiscal policy raises disposable income through reduction of taxes in the economy and this improves the rate of consumption. Therefore, tax reduction is an appropriate expansionary fiscal policy that can be deployed to help an economy that could be undergoing a recession (DeLong & Summers, 2012). Consequently, tax reduction could be a vital government tool for increasing the Gross Domestic Product. Low taxes encourage individuals to work hard and thus boosting the county’s GDP.

The tax policy that have been implemented need to be financed in order to ensure stability in the country. It is evident if the tax cut is made to be permanent, there is need to ensure that government spending is reduced significantly in the market. An example is 2014 whereby the government has to reduce the social

The standard for terminal growth is normally GDP, or 3%. Given the maturity of this

It is expressed as either a budget deficit (whereby expenditure is greater than revenue), budget surplus (whereby revenue is greater than expenditure) or a balanced budget (whereby revenue and expenditure are equal).The fiscal outcome is estimated to have a 33.0 billion deficit (-2.0% of GDP) a decrease from the 2014-15 forecast of 39.4 billion deficit (-2.5% of GDP). The 2015-16 budget is forecasted to have an underlying cash balance of -35.1 billion (-2.1% of GDP), this is also a decrease from the 2014-15 budget underlying cash balance forecast of -41.1 billion (-2.6% of GDP) and thus while being a deficit the budget is mildly contractionary. This shows the government is aiming to reduce the deficit and move from fiscal expansion towards fiscal consolidation and reach a possible budget surplus by

In terms acceleration of economic growth is based on the measurement of GDP, MALAYSIA HAS recorded a growth of 5.1% last year. Although it is lower than 7.2% in 2010, but it was so roaring in the context of a difficult global economic environment and uncertainty. In contrast, global economic growth has dropped from 5.2% in 2010 to 3.8% in 2011 while the economy of the developed countries like USA, Germany, UK, France and Japan also recorded weak growth of respectively 1.5%, 2.7%, 1.1 %, 1.7% and -0.5% in the same year; far lower than Malaysia's achievements. Following a satisfactory GDP growth was assisted by the Federal government revenue increased by RM13.2 billion in 2011 through increased collection of IRB estimate of RM109.7 billion compared with RM96.5 billion the government has managed to reduce its fiscal deficit to 5.0% compared projection of 5.4%. This means that the GOVERNMENT has successfully steered the nation's economy as well as the control and management of public funds wisely in the past 3 years in a row when managed to bring down the fiscal deficit from 7.0% in 2009 to 5.6% (2010) and 5.0% in the past year in a expanding economy.