---
title: "What is the difference between fiscal policy and monetary policy?"  
description: "What is the difference between fiscal policy and monetary policy?"  
author: "Benjamin Reid"  
published: 2026-11-13  
updated: 2026-11-13  
canonical: https://answers.mindstick.com/qa/120019/what-is-the-difference-between-fiscal-policy-and-monetary-policy  
category: "general knowledge"  
tags: ["fiscal policy vs monetary policy", "rbi", "government budget", "economy"]  
reading_time: 1 minute  

---

# What is the difference between fiscal policy and monetary policy?



## Answers

### Answer by Wahid Haidari

Both are used to manage the economy, but by different authorities.

- **Fiscal policy** is controlled by the government. It involves decisions on taxes and public spending, announced mainly through the Union Budget.
- **Monetary policy** is controlled by the central bank, the RBI in India. It involves managing interest rates, such as the repo rate, and the supply of money to control inflation and support growth.

In India, a six-member Monetary Policy Committee, headed by the RBI Governor, sets the repo rate, with the goal of keeping consumer inflation around 4 percent.


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Original Source: https://answers.mindstick.com/qa/120019/what-is-the-difference-between-fiscal-policy-and-monetary-policy

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