The primary objective of fiscal policy in India is to promote economic growth by increasing aggregate demand and stimulating investment.

Government spending is an instrument of fiscal policy because it can be used to increase or decrease aggregate demand.

Government spending increases aggregate demand by increasing the amount of money in circulation.

Taxation decreases aggregate demand by reducing the amount of money in circulation.

Expansionary fiscal policy increases aggregate demand by increasing government spending or reducing taxes, while contractionary fiscal policy decreases aggregate demand by decreasing government spending or increasing taxes.

The main objectives of fiscal policy in India are to promote economic growth and development, to control inflation, to reduce unemployment, and to achieve social justice.

Interest rates are not an instrument of fiscal policy because they are determined by the central bank, not the government.

Fiscal policy can stimulate or contract the economy, affect the distribution of income, affect the level of employment, and affect the rate of inflation.

The challenges of fiscal policy in India include the large size of the government budget deficit, the high level of public debt, and the need to balance the objectives of economic growth, inflation control, and social justice.

The prospects for fiscal policy in India are positive because the government is committed to reducing the budget deficit and public debt, implementing reforms to improve the efficiency of public spending, and working to improve the tax system.

The Reserve Bank of India advises the government on fiscal policy, implements the government's fiscal policy, and monitors the impact of fiscal policy on the economy.

The main instruments of fiscal policy in India are government expenditure, taxation, and public debt.

Fiscal policy can affect aggregate demand, the distribution of income, the level of employment, and the rate of inflation.

The challenges of fiscal policy in India include the large size of the government budget deficit, the high level of public debt, and the need to balance the objectives of economic growth, inflation control, and social justice.

The prospects for fiscal policy in India are positive because the government is committed to reducing the budget deficit and public debt, implementing reforms to improve the efficiency of public spending, and working to improve the tax system.