Taxation as an Instrument of Fiscal Policy in India

Taxation is a fundamental tool for fiscal policy, which is the use of government spending and to influence the economy. Governments use taxation as a means to achieve various economic and social objectives such as generating revenue which are used to fund public services and government activities, income redistribution as a social welfare program, and also to address environmental concerns by discouraging activities that contribute resource depletion. Taxation has also been used as a tool to combat inflation. The article examines the careful balance between achieving economic objectives, promoting fairness, and addressing social and environmental concerns. Through a comprehensive analysis, this article aims to contribute to the understanding of the intricate dynamics between taxation and fiscal policy, offering insights that are relevant to policymakers, legal practitioners, and scholars in the field of taxation law.