Fiscal policy is playing an important role on the economic and social front of a country. Traditionally, fiscal policy in concerned with the determination of state income and expenditure policy. But with the passage of time, the importance of fiscal policy has been increasing continuously for attaining rapid economic Accordingly, it has included public borrowing’ and deficit financing as a part of fiscal policy of the country. An effective fiscal policy is composed of policy decisions relating to entire financial structure of the government including tax revenue, public expenditures, loans, transfers, debt management, budgetary deficit, etc. The policy also tries to attain proper balance between these aforesaid units so as to achieve the best possible results in terms of economic goals. Harvey and Joanson, M., defined fiscal policy as “changes in government expenditure and taxation designed to influence the pattern and level of activity.”