Explain the fiscal measures to control inflation?



Some of the important fiscal measures to control inflation are as follows:

1.       Reduction in Public expenditure: -Government expenditure should be reduced to control inflation.

2.       Increase in taxes: -Government increases level of taxes and imposes new taxes. It leads to fall in the consumption expenditure.

3.       Surplus budget: -The government has to adopt surplus budget in order to control inflation.

4.       Public borrowings: -the government borrows money from market, private individuals and firms. It takes away the excess purchasing power of the people. It reduces demand and hence prices come down.


5.       Over Valuation: -It discourages exports and increases availability of goods and services in a country.