Management Notes

Reference Notes for Management

Revenue Structure in Nepal – Taxes, Grants, Non Tax Revenue, Miscellaneous Revenue & Cash Balance | Public Economics

Revenue Structure in Nepal

Revenue Structure in Nepal   A. Taxes       1) Taxes on Income , Profits, and Capital Gains a) Payable by Individuals and Sole Traders Individual or Sole Traders Remuneration Tax Capital Gain- Individuals b) Payable by Enterprises and Corporations Company profit Tax paid by Government Corporation Companies, Public Limited Companies, Private Limited Companies and … Read more

Fiscal Policy – Concept, Objectives, Importance of Fiscal Policy | Public Economics

Fiscal Policy

Concept of Fiscal Policy

A fiscal policy controls the government’s expenditures and receipts. It is the government’s budgetary policy. It operates through changes in government expenditures, taxation and public borrowing. A compensatory fiscal policy is when government expenditures and receipts are manipulated to achieve national objectives, such as high employment, price stability, economic growth, and balance of payments equilibrium.The government’s expenditures and revenues are used to produce desirable effects while avoiding negative effects on national income, employment, and production.
A government’s fiscal policy involves taxation, expenditures, and other financial operations to achieve certain national goals.The government uses this tool to regulate or modify the economic affairs of an economy.

The fiscal policy of a government includes measures of public expenditures, public revenues, and public debt or borrowing. Fiscal policy is concerned with the aggregate effect of government expenditure and taxation on income, production, and employment. An exercise where the government controls the public budget in order to achieve predetermined macroeconomic goals. Functional finance is an application of the principle of fiscal policy in the modern world. By adjusting the fiscal measures, inflation or deflation can be controlled, i.e. according to the changing conditions of the economy.Taxation and expenditure policies of a government, which together comprise its budget. Fiscal policy is government spending that influences macroeconomic conditions. The effect of these policies is to control the economy by influencing tax rates, interest rates, and spending.

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Foreign Aid – Concept ,Trend, Composition, Major Issues and Challenges in Nepal | Public Economics

Foreign Aid

Concept of Foreign Aid

The concept of foreign aid involves the transfer of real resources from governments or public institutions in developed countries to governments of less developed countries (LDCs) in the third world. There are many types of flows of foreign resources, and it is important to identify them. There are generally two broad categories of foreign capital flows – official and private.

There are two types of official capital flows:

  • Bilateral and
  • Multilateral

Governments of donor countries provide capital to governments of recipient countries through official bilateral flows. A multilateral capital flow is one that originates from multilateral organizations such as the World Bank, the United Nations, and the IMF. The two types of official flow can be in the form of grants, loans, or grant-like contributions. Since grants represent a net addition to the resources for development, they should be considered as the best kind of foreign aid. World Bank, for example, gives loans at lower interest rates than those on the capital markets. In cases where loans are granted to the LDCs at a concessionary rate for very long periods, such as 40-50 years, the inflow of foreign resources is characterized as foreign aid, although foreign private investments are not exactly foreign aid because they are made on commercial terms.

Over the years, the degree of reliance on foreign assistance has increased for many developing countries. It is unfortunate that many times the growth in aid flows has not been matched by adequate administrative capacity to manage them. Fiscal economists can be affected by this in several ways. Development assistance aims to relieve poverty, boost investment and increase the growth rate of GNP among developing countries.

Foreign aid, however, has not always been able to achieve these objectives since the motives of donors for giving aid and recipients for accepting it often conflict with the economic objectives of foreign aid. Over long periods of time, there has never been any historical evidence that donor countries provided their support without receiving some form of recompense (political, economic, military).

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