Fiscal Deficit & its Impact on Economic Growth
Pratyush Kumar1, Maariyah Ghaswala2, Chrisanne Gomes3, Mohammed Aadil Khan4, Vidit Kohli5, Ansh Maheshwari6
1Pratyush Kumar, Department of Technology Management (Finance), Mukesh Patel School of Technology Management and Engineering, NMIMS University, Mumbai (Maharashtra), India.
2Maariyah Ghaswala, Department of Technology Management (Finance), Mukesh Patel School of Technology Management and Engineering, NMIMS University, Mumbai (Maharashtra), India.
3Chrisanne Gomes, Department of Technology Management (Finance), Mukesh Patel School of Technology Management and Engineering, NMIMS University, Mumbai (Maharashtra), India.
4Mohammed Aadil Khan, Department of Technology Management (Finance), Mukesh Patel School of Technology Management and Engineering, NMIMS University, Mumbai (Maharashtra), India.
5Vidit Kohli, Department of Technology Management (Finance), Mukesh Patel School of Technology Management and Engineering, NMIMS University, Mumbai (Maharashtra), India.
6Ansh Maheshwari, Department of Technology Management (Finance), Mukesh Patel School of Technology Management and Engineering, NMIMS University, Mumbai (Maharashtra), India.
Manuscript Received on 20 January 2025 | First Revised Manuscript Received on 12 July 2025 | Second Revised Manuscript Received on 12 August 2025 | Manuscript Accepted on 15 August 2025 | Manuscript published on 30 August 2025 | PP: 21-30 | Volume-11 Issue-12 August 2025 | Retrieval Number: 100.1/ijmh.F178511060225 | DOI: 10.35940/ijmh.F1785.11120825
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© The Authors. Blue Eyes Intelligence Engineering and Sciences Publication (BEIESP). This is an open access article under the CC-BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/)
Abstract: The paper examines the fiscal deficit in India, its components, and historical trends across both pre- and postliberalisation eras. It explores the dual role of fiscal deficits as tools for economic growth and potential barriers to financial stability. Positive impacts include economic stimulus, job creation, and infrastructure development, while negative aspects involve inflation, debt sustainability, and crowding out of private investments. The analysis encompasses key drivers, including government spending, subsidies, and tax policies, as well as the impact of external shocks such as the COVID-19 pandemic. Our findings conclude with policy recommendations for sustainable fiscal management and future research directions.
Keywords: Historical Trends, Fiscal Management, Economic Stimulus, Job Creation.
Scope of the Article: Economy