Effects of Economic Reform on Fiscal Stability in India

Abstract

Fiscal discipline is a state of an ideal balance between revenue and expenditure of a Government. The study of financial position of the Central Government assumes greater importance to forecast the ability of it to raise expenditures, to assess its expenses and to focus light on its fiscal front. So deficit plays pivotal role in the Indian economy. By understanding efforts were made in solving the ill-effects of deficit. One among them is the Financial Responsibility and Budget Management Act 2004, which took measures to reduce fiscal deficit less than 3% and boost the economic growth of nation. Martin Feldstein (2004) pointed out that high level of fiscal deficit for not only sharp increase in the debt- GDP ratio, but also affects savings and growth. In this background researcher tried to analyse the trend and growth rate of fiscal deficits in India over a decade i.e, 2013-2023.