Fiscal Policy is the use of government spending and taxation to influence the economy. It is one of the two primary tools for macroeconomic management—the other being monetary policy (managed by central banks).
In simple terms, fiscal policy is
how a government decides to earn money (taxes) and spend money (expenditure) to
achieve specific goals like economic growth, full employment, and price
stability.
In Nepal, Fiscal Policy is the primary economic instrument used by the Government of Nepal (GoN) to manage the national economy through the annual Federal Budget. It operates via three main channels: government expenditure (G), revenue collection through taxation (T), and public borrowing.
