Fiscal policy is related to the government revenue and expenditure. It is also known as budgetary  policy.  A budget is the annual financial statement of the government  in which estimated expenditure planned for the next  years (period) and estimated revenues to be raised through taxes and other sources  which  increasing  the revenue.                 The government expenditure may include public expenditure such as development of public enterprises formation of infrastructure such as transportation, bridges hospitals etc and other social welfare work like as education, on the other had government revenue progress include taxation policy of government which the main source of income of the government , and fiscal policy  is the implementation of these programs.



According to Arthur Smithies:- “Fiscal policy is the policy under which the government use its expenditure and revenue programme to produce desirable effects and avoid undesirable effects on the national income.


Thus it refer to the government policy of changing its taxation and public expenditure programmes intended its achieve certain predetermined goals.   Taxation a measurement of transferring fund from private sector to public sector and public expenditure.  On the other hand increases the flow of funds in the economy this policy is assumed on the powerful  instrument of ECONOMIC STABALIZATION.

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