Article Information

Authors GEETHA. J. R.
Article Type Research Article
Language English
Journal North Asian International Research Journal of Social Science & Humanities
ISSN 2454-9827
Volume 12
Issue 8
Pages 29-44
Publication Year 2026
Publication Date August 01, 2026
DOI URL https://doiglobal.org/10.2026/NAIRJCSSH.012

Abstract

Fiscal deficit and public debt are central issues in macroeconomic management, particularly in developing economies where governments face the dual responsibility of promoting growth and maintaining fiscal sustainability. In India, public expenditure plays an important role in infrastructure development, social welfare, health, education, rural development, and economic stabilisation. However, persistent fiscal deficits can lead to rising public debt, higher interest obligations, crowding out of private investment, inflationary pressures, and reduced fiscal flexibility. This paper examines the causes, trends, and consequences of fiscal deficit and public debt in India, with particular emphasis on their relationship with economic growth and macroeconomic stability. The study adopts a descriptive and analytical approach based on secondary sources including government reports, Reserve Bank of India publications, international databases, and academic literature. The paper argues that fiscal deficits are not necessarily harmful when they finance productive public investment, but persistent deficits used primarily for current expenditure may create long-term sustainability problems. The study concludes that India requires a growth-oriented fiscal consolidation strategy focused on expenditure quality, tax efficiency, debt management, transparency, and prioritisation of capital formation.

Keywords

Fiscal Deficit Public Debt Economic Growth Fiscal Policy Macroeconomic

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DOI: 10.2026/NAIRJCSSH.012

References

1. Barro, R. J. (1974). Are government bonds net wealth? Journal of Political Economy, 82(6), 1095–1117.
2. Blanchard, O. (2021). Macroeconomics. Pearson.
3. Government of India. (Various years). Economic Survey. Ministry of Finance.
4. Government of India. (Various years). Union Budget Documents. Ministry of Finance.
5. International Monetary Fund. (Various years). Fiscal Monitor. IMF.

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Recommended Citation

GEETHA. J. R. (2026). FISCAL DEFICIT AND PUBLIC DEBT IN INDIA: IMPLICATIONS FOR ECONOMIC GROWTH AND MACROECONOMIC STABILITY. North Asian International Research Journal of Social Science & Humanities. DOI: https://doiglobal.org/10.2026/NAIRJCSSH.012

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