The correct answer is A. To increase liquidity in economy.
Fiscal policy is the use of government revenue collection (taxation) and expenditure (spending) to influence the economy. In the context of India, the main objectives of fiscal policy are to:
- Promote economic growth
- Maintain price stability
- Reduce inequality
- Promote employment opportunities
Increasing liquidity in the economy is not one of the main objectives of fiscal policy. Liquidity refers to the ease with which an asset can be converted into cash. Increasing liquidity can be achieved by lowering interest rates or by increasing the money supply. However, these measures are not always appropriate or effective in achieving the other objectives of fiscal policy. For example, lowering interest rates may stimulate economic growth, but it may also lead to inflation. Increasing the money supply may also stimulate economic growth, but it may also lead to inflation or financial instability.
Therefore, increasing liquidity in the economy is not a primary objective of fiscal policy. The main objectives of fiscal policy are to promote economic growth, maintain price stability, reduce inequality, and promote employment opportunities.