AKTU Monetary and Fiscal Policy (BMBF402) Syllabus PDF – MBA (Banking & Financial Services) 4th Semester

Course Objectives

1. Provide an overview of key monetary and fiscal policy concepts, frameworks, and techniques.
2. Explain the role of fiscal policy in achieving macroeconomic stability, equity, efficiency, and sustainable economic growth.
3. analyse the major components, instruments, and best practices of monetary and fiscal policies.
4. Develop an understanding of the role of central banking and monetary institutions, particularly in emerging economies.
5. Evaluate the impact of monetary and fiscal policy decisions on economic performance, financial stability, and inclusive growth.

Course Content

Module I: Monetary Policy and Macroeconomic Environment Management (6 Hours)

Monetary Policy and Macroeconomic Environment Management; Concept and Importance of Monetary Policy;

Objectives of Monetary Policy: Price Stability, Employment Generation, Exchange Rate Stability, Balanced Economic Growth and Financial Stability. Conflict among Monetary Policy Objectives: Growth versus Inflation; Role of Monetary Policy in Economic Development; Inflation Management; Monetary Policy Transmission Mechanism; Role of Central Bank in Macroeconomic Management. Case Studies: Monetary policy responses during inflationary pressures and economic slowdown.

Module II: RBI’s Monetary Policy Committee and Monetary Policy Instruments (10 Hours)

Formation of Monetary Policy Committee (MPC): Purpose, Functions, Constitution and Decision-Making Process;

Instruments of Monetary Policy: Concept, Mechanism and Effectiveness of: Bank Rate, Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), Repo Rate, Reverse Repo Rate, Marginal Standing Facility (MSF) Rate; Review of Monetary Policy Framework of the Reserve Bank of India during the last five years; Recent Monetary Policy Changes announced by RBI. Role of Central Banking in Emerging Economies; Digital Currency and Changing Role of Central Banks. Case Studies: RBI monetary policy decisions and their impact on inflation, growth and financial markets.

Module III: Public Finance and Recent Macroeconomic Trends (8 Hours)

Public Finance: Meaning, Scope and Importance; Role of Government in the Economy. Government Intervention:

Public Goods, Externalities and Asymmetric Information. Fiscal Policy and Long-Term Economic Growth; Fiscal Policy and Equity; Fiscal Policy and Macroeconomic Stability. Interaction between Monetary Policy and Fiscal Policy; Fiscal- Monetary Coordination. Recent Global and Regional Macroeconomic Trends; Impact of Global Economic Events on Domestic Policy Framework. Case Studies: Global financial crises, pandemic response, and economic recovery policies.

Module IV: Fiscal Frameworks, Policies and Economic Impact (10 Hours)

Fiscal Policy: Meaning, Objectives and Components. Government Expenditure in India: Capital Expenditure, Revenue Expenditure, Plan and Non-Plan Expenditure Fiscal Indicators: Fiscal Deficit, Primary Deficit, Revenue Deficit; Impact of Fiscal Deficits on Economic Growth and Stability; Government Receipts: Capital Receipts, Revenue Receipts, Tax Revenue Non-Tax Revenue; Budget Estimates, Revised Estimates and Actual Estimates; Modern Budgeting Practices:

Zero-Based Budgeting, Gender Budgeting; Fiscal Devolution and Centre-State Financial Relations; Role of Finance Commission; Case Studies: Union Budget analysis and fiscal policy reforms in India.

Module V: Fiscal Policy Sustainability and Inclusive Growth (6 Hours)

Fiscal Sustainability: Concept and Importance; Public Debt Management; Debt Tolerance and Fiscal Space.

Fiscal Sustainability Analysis: Debt Projections, Fiscal Risks, Debt Sustainability Across Countries and Over Time Fiscal Space: Concept, Optimal and Safe Debt Levels; Relationship between Interest Rates and Public Debt.

Fiscal Policy and Inclusive Growth: Poverty Reduction, Employment Generation, Social Sector Development Sustainable Economic Growth; Case Studies: Sustainable fiscal practices and inclusive development strategies.

Activities a. Analysis of RBI Monetary Policy Committee reports and policy decisions. b. Presentations on inflation, interest rates, and monetary policy tools. c. Analysis of Union Budget documents and fiscal indicators. d. Group discussion on monetary policy challenges in emerging economies. e. Comparative analysis of fiscal and monetary policies of different countries. f. Data interpretation exercises using macroeconomic indicators. g. Assignment on recent economic reforms and policy measures.

Suggested Readings

1. D’Souza, E.; Macroeconomics; Pearson Education.
2. Froyen, R.; Macroeconomics; Pearson Education.
3. Mankiw, N. G.; Macroeconomics; Worth Publishers.
4. Abel, A. & Bernanke, B.; Macroeconomics; Pearson Education.
5. Dornbusch, R., Fischer, S. & Startz, R.; Macroeconomics; McGraw-Hill.
6. Mishkin, F. S.; The Economics of Money, Banking and Financial Markets; Pearson Education.
7. Blanchard, O.; Macroeconomics; Pearson Education.
8. Reserve Bank of India; Monetary Policy Reports and Annual Reports.
9. Ministry of Finance, Government of India; Economic Survey and Union Budget Documents.

Course Outcomes