Which one of the following is NOT generally regarded as a main objective of fiscal policy in India?

Introduction / Context:
Fiscal policy refers to the use of government taxation and expenditure to influence the level of economic activity, distribution of income and allocation of resources. In the Indian context, fiscal policy has been used to pursue growth, employment, equity and stability. However, some macroeconomic tasks are primarily associated with monetary policy rather than fiscal policy. This question asks you to identify which option does not belong to the core set of fiscal policy objectives.

Given Data / Assumptions:
- The four options mention liquidity, price stability, reduction of inequality and promotion of employment.
- Fiscal policy tools include taxes, public spending and public borrowing.
- Monetary policy tools are handled by the central bank and directly affect liquidity and money supply.

Concept / Approach:
Fiscal policy aims at achieving a number of broad goals: rapid and inclusive economic growth, increased employment opportunities, reduction of poverty and inequality, and overall macroeconomic stability including reasonable control over inflation. However, the specific task of directly increasing or reducing liquidity in the economy by changing money supply and interest rates is typically carried out through monetary policy. Therefore, while fiscal policy can have indirect effects on liquidity, it is not primarily designed or described as a tool to manage liquidity through money supply.

Step-by-Step Solution:
Step 1: Evaluate option B. Promoting price stability is indeed an objective that both fiscal and monetary policy support. A responsible fiscal stance helps avoid excessive deficits that could fuel inflation.Step 2: Evaluate option C. Minimising inequalities of income and wealth is a classic fiscal policy objective, achieved through progressive taxation and redistributive public expenditure.Step 3: Evaluate option D. Promoting employment opportunities and growth is also a central aim of fiscal policy through development spending, infrastructure investment and social schemes.Step 4: Evaluate option A. Increasing liquidity in the economy through manipulating money supply is fundamentally the domain of monetary policy, using tools like open market operations and reserve requirements. It is not normally listed as a main objective of fiscal policy.

Verification / Alternative check:
To verify, you can compare standard lists of objectives. Fiscal policy is often summarised as a tool for resource mobilisation, allocation, stabilisation and redistribution. Monetary policy is summarised as a tool to control money supply, credit and inflation. The phrase increasing liquidity in the economy through money supply clearly points to monetary policy rather than fiscal policy.

Why Other Options Are Wrong:
Option B is wrong as an answer because price stability is an important fiscal concern; large deficits can destabilise prices, so fiscal prudence is aimed partly at stability. Option C is wrong because fiscal instruments are specifically used to reduce inequality. Option D is wrong because employment and growth are central goals of public expenditure policy.

Common Pitfalls:
Candidates often confuse tools with objectives and mix up fiscal and monetary responsibilities. Seeing the phrase liquidity may prompt them to think automatically of economic policy in general without distinguishing between fiscal and monetary policy. The key is to remember that while both policies influence the economy, only monetary policy directly manages the quantity of money and liquidity as its main instrument.

Final Answer:
The item that is not a main objective of fiscal policy in India is To increase liquidity in the economy through money supply.