Difference between fiscal policy and monetary policy

Fiscal policy is the policy relating to government revenues from taxes and expenditure on various projects. Monetary Policy, on the other hand, is mainly concerned with the flow of money in the economy.

1. Fiscal policy is the tool used by the government in which it uses its tax
   revenue and expenditure policies to affect the economy whereas monetary policy is the tool used by the central bank to regulate the money supply in the economy.
2. Fiscal policy is administered by Ministry of Finance whereas monetary policy is administered by the central bank.
3. Fiscal policy changes every year whereas the change in monetary policy depends on the economic status of the nation.
4. Fiscal policy is related to Government Revenue & Expenditure whereas monetary policy is related to Banks & Credit Control
5. Fiscal policy focuses on economic growth whereas monetary policy focuses on economic stability.
6. The policy instruments of Fiscal policy are Tax rates and government spending whereas the policy instruments of monetary policy are Interest rates and credit ratios.
7. Fiscal policy has political influence whereas monetary policy does not have political influence.

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