AN ANALYTICAL STUDY OF GROSS FISCAL DEFICIT OF INDIA

Abstract

Fiscal deficit is the major considerable element on economic growth as well as country’s purchasing power. The better control on deficits may warrant the stability in growth as well as effective control on inflationary pressure. The paper is primarily aims to review the trend and patterns of fiscal deficit (Gross) of Central Govt. the period extended for this was 1995 – 96 to 2018 – 19. The period is classified into 3 phases. Phase-One 1995-96 to 2002-03 post liberalization period but before implementation of FRBM Act. Second phase two from 2003-04 to 2010-11 a period between post implementation of FRBM Act and economy recovery post global financial crisis. While phase three post global financial crises. The relationship between the quarterly deficits of three periods has been identified for all four quarters. The aim was to check variation in quarterly data of period over period is significant or not using single Factor ANOVA. It is observed that three quarters have no significant difference while when the data is tested for annual deficits the variation was found significantly different. The major recommendable aspect is that funds borrowed shall be effectively utilized for funding capital expenditure as against the financing fiscal deficit.