Published Paper Details:

In the recent past, several attempts by the RBI to control inflation through tight monetary policy have ended up slowing the growth process, thereby provoking prolonged discussion among academics and policymakers about the efficacy of monetary policy in India. Against this backdrop, the present study attempts to estimate the causal relationship between monetary policy and its final objectives; i.e., growth, and controlling inflation in India. In view of the fact that output gap is one of the determinants of future inflation, an attempt has also been made to study the causal relationship between output gap and inflation. Furthermore, any attempt to control inflation affects output with the same or even greater magnitude than inflation, thereby damaging the growth process. The relationship between output gap and inflation was found to be positive, as reported in earlier studies for India. Furthermore, the output gap causes inflation only in the short-to medium-run. he economy of India is that the seventh-largest-economy in the world measured by nominal Gross Domestic Product & the third largest by Purchasing Power Parity (PPP) and therefore the outlook for short term growth is additionally good as per the International monetary fund, the Indian economy is the "bright spot" within the global landscape. India additionally topped the world Bank growth outlook for 2015-2016 for the first time with the economy growth 7.6% (expected grown is 8.0+in 2016-2017). "Fiscal policy is that a part of government policy that is concerned with Raising Revenue through Taxation". It is directly affects the monetary resources power within the hands of the general public. In economics and political science, fiscal policy is the use of government revenue collection (mainly taxes) & expenditure (spending) to influence the economy. Once the government changes the amount of taxation & government disbursement, it influences aggregate demand of economic activity. The fiscal policy will be accustomed stabilize the economy over the course of the fluctuation. Tax policy, expenditure policy, investment or disinvestment methods and debt or surplus management is that the core basis of the fiscal policy. In underdeveloped countries the importance of economic policy is extremely high.