Inflation is the rate at which the general level of prices for goods and services is rising from one period to another. Inflation reduces purchasing power by reducing the quantity of goods that can be acquired for the same income. Inflation is measured using inflation price indices such as the Wholesale Price Index (WPI) and Consumer Price Index (CPI).

In a nutshell, it is the financial plan of the government. The government uses the different types of revenues (mainly taxes-direct & indirect) and expenditures as fiscal tools to achieve different objectives. The main objectives are high economic growth, price stability, favorable balance of trade and payment, equitable distribution of income and wealth, proper allocation of resources, balanced and stable economic growth and so on.

Source of income for Government: The main sources of income for the government are tax and non-tax revenue. Taxes include Income tax, corporation tax and indirect taxes while the non-tax revenue comes from public sector units like income from railways or Public sector banks etc.

Expenditure of Government: The government spending can be classified as revenue and capital expenditure. Revenue expenditure includes payment of salaries to government employees, payment to ministers etc. Capital expenditure, leads to the formation of assets in the economy like building of roads, bridges, schools etc.

Current account deficit is a measurement of a country's trade where the value of the goods and services it imports exceeds the value of the goods and services it exports. The current account is essentially a calculation of a country's foreign transactions and, along with the capital account, is a component of a country's balance of payment.