Ministry of Finance – What Does it Do?
Ministry of Finance, which is also known as finance ministry, is the central body of the government of India responsible for allocating funds in the country. It also supervises the expenditure, disbursal and distribution of finance.
This body plays a very important role in the economic and fiscal policy of the country. It has to formulate a plan that would enable the economy to grow faster and develop at the same time. They have to ensure that there is enough finance in the economy for further growth. Therefore, it is essential for the country to keep this ministry well informed about the economic activities of the economy.
The ministry of finance has the responsibility to: Develop and track proper policies and plans that guide short and medium-term expenditure management. Prepare and submit the annual national budget. Formulate and review, evaluate and approve projects and policies in consultation with various Ministries and institutions. Make the necessary recommendations to the Finance Minister for necessary measures. Assess and manage all financial resources in the economy.
Ministry of Finance Importance
There are different departments and branches under the ministry of finance. These include: Finance, Revenue and Statistics; Monetary Policy; Monetary Analysis; Credit Policy; Asset Pricing; Fiscal Policy; Financial Planning and Budgeting; Corporate Finance; Corporate Affairs; Corporate Finance and Insurance; Credit Rating Services; Investment Policy; International Trade; International Monetary Policies; International Bankruptcy Policy; Insurance Policy; Securities Markets; Trade and Industry Policy. The responsibility of the finance ministry includes planning and implementing the strategy to promote financial health in the country. All the policies that come from this ministry are enforced by law.
Since the Finance Ministry is responsible for ensuring a steady flow of finance in the economy, it is crucial for the country to have a stable financial system. This means that the country should have a system that would facilitate easy and quick transfers of funds to and from the economy. In addition, there must be enough fiscal intermediaries to ensure a smooth exchange of credits and debits. between banks and financial institutions.
The ministry of finance also makes sure that monetary policy is in balance and that interest rates are low and inflation is kept to a minimum. so that the country can sustain the normal lifestyle of its people. The government tries to maintain a favorable exchange rate by keeping the exchange rate of the dollar at a high level.
Other major functions of this ministry includes promoting economic growth of the country through economic growth in sectors such as the manufacturing, transport, services and other fields. The aim of the ministry is to provide an environment that would make the country an attractive investment destination. For this, the finance ministry appoints financial experts to ensure that the country gets all the financial resources and assistance that it requires.
The importance of this ministry cannot be undermined in today’s global economy because of its role in stimulating economic growth. It is important for the country to maintain a sound balance of payments.
A balanced fiscal system is important for the country to sustain economic growth. In order to achieve a balanced fiscal system, the finance ministry has to take a number of steps including: raising the level of taxation and ensuring compliance with the tax laws, controlling spending, and controlling inflation. The finance ministry also monitors the country’s trade deficit. so as to maintain and improve the competitiveness of the economy. to attract the right kind of foreign investment into the country.
The budgeted expenditure for the ministry of finance is $5.3 billion every year. The ministry of finance has a very ambitious budget. Therefore, the country’s fiscal policy must be kept in consideration during the planning stages of the budget.
A balance between taxes and expenditures must be maintained in order to achieve the goal of a healthy economy and a sound country’s fiscal policy. The finance ministry of finance is also the main coordinating body for all financial policies in the country. to maintain good relations with the international community. The budget is always discussed in the cabinet meeting of the country.
The ministry of finance also acts as a mediator between creditors and debtors to help the debtor in paying off his debts. The ministry of finance tries to convince creditors to settle for a deal that will benefit both the debtor and the creditor. This ministry ensures that all the regulations of debt settlement are complied with and maintained. in order to promote better business conditions for the economy.