Impact of Fiscal Policy on Economic Growth and Public Welfare

Abstract

Fiscal policy is a crucial macroeconomic tool used by governments to influence economic growth and improve public welfare through taxation, public expenditure, and budgetary management. It plays a central role in stabilizing the economy, redistributing income, and promoting inclusive development. In countries like India, fiscal policy is instrumental in addressing challenges such as poverty, unemployment, and infrastructure gaps. the impact of fiscal policy on economic growth and public welfare by analyzing the role of government spending and taxation. Expansionary fiscal policy, characterized by increased public expenditure and reduced taxes, can stimulate economic activity, boost demand, and create employment opportunities during periods of economic slowdown. Conversely, contractionary fiscal policy is used to control inflation and reduce fiscal deficits by limiting spending and increasing taxes.  the importance of efficient allocation of public resources in sectors such as education, healthcare, and infrastructure, which directly contribute to human development and social welfare. Well-designed fiscal policies can reduce income inequality, enhance access to essential services, and improve living standards.