The Impact of Fiscal Deficit on Economic Growth in India: An Economic Analysis

Sanjeev Kumar

doi:10.26703/jct.v14i2.112

Authors

Dr. Sanjeev Kumar Assistant Professor, Department of Economics, University of Lucknow, Lucknow-226007 https://orcid.org/0000-0002-3401-4799

DOI:

https://doi.org/10.26703/jct.v14i2.112

Keywords:

Fiscal Deficit, Economic Growth, Economic Analysis, India

Abstract

The present paper examines the trends of fiscal deficit and economic growth in India from 1980-81 to 2017-18 and also analyses the impact of fiscal deficit on Indian economic growth by using regression model. The impact of fiscal deficit has always been a subject of intense debate. Some academician emphasized that fiscal deficit as a growth promoting tool due to increase in government expenditure, while others emphasize that the fiscal disciple as the most important for strengthening macroeconomic fundamentals of the economy. The regression result of the paper indicates that there is negative and significant impact of fiscal deficit on the economic growth of India. The research paper suggested that fiscal deficit within limit is good for economic growth and the government fund should be spent on beneficial projects. It is also suggested that sustainable economic growth and steady reduction in fiscal deficit can be achieved through fiscal policy reforms in India.
Classification-JEL : C58

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References

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