LIMITATIONS OF FISCAL POLICY

1)SIZE OF FISCAL MEASURES:
THE BUDGET IS NOT A MERE STATEMENT OF REVENUES AND RECEIPTS OF THE GOVERNMENT.IT EXPLAINS AND SHAPES THE ECONOMIC STRUCTURE OF A COUNTRY.WHEN THE BUDGET FORMS THE SMALL PART OF THE NATIONAL INCOME IN DEVELOPING ECONOMIES,FISCAL POLICY CANNOT HAVE A DESIRED IMPACT ON THE ECONOMIC DEVELOPMENT.DIRECT TAXATION AT TIMES BECOME A INSTRUMENT OF LIMITED APPLICABILITY,AS THE MAJORITY OF THE PEOPLE ARE NOT COVERED BY IT.FURTHER,WHEN THE TOTAL TAX REVENUE FORMS A SMALLER PORTION OF NATIONAL INCOME,FISCAL MEASURES WILL NOT STEP UP THE SAGGING ECONOMY REQUIRING MASSIVE HELP.
2)FISCAL POLICY AS INEFFECTIVE AND ANTI-CYCLICAL MEASURE:
FISCAL MEASURES-BOTH THE LOOSENING FISCAL POLICY AND TIGHTENING FISCAL POLICY-WILL NOT STIMULATE SPEEDY ECONOMIC GROWTH OF A COUNTRY,WHEN THE DIFFERENT SECTORS OF THE ECONOMY ARE NOT CLOSELY INTERGRATED WITH ONE ANOTHER.ACTIONS TAKEN BY THE GOVERNMENT MAY NOT ALWAYS HAVE THE SAND EFFECT ON ALL THE SECTORS.
3)ADMINISTRATIVE DELAY:
FISCAL POLICY MAY INTRODUCE DELAY AND UNCERTAINTIES ARISING FROM ADMINISTRATIVE BOTTLENECKS. THEREFORE THE FISCAL POLICY FAILS TO BE A POWERFUL AND A USEFUL STABILIZATION POLICY.
OTHER LIMITATIONS:
LARGE SCALE UNDEREMPLOYMENT,LACK OF COORDINATION FROM THE PUBLIC AND LOW TAX BASE ARE THE OTHER LIMITATIONS OF FISCAL POLICY.