๐What is a fiscal deficit? Analyze the implications of a high fiscal deficit on the Indian economy. Suggest measures to control it.
๐ GS Paper 3 – Indian Economy ❓ Question: "What is a fiscal deficit? Analyze the implications of a high fiscal deficit on the Indian economy. Suggest measures to control it." "เคฐाเคเคोเคทीเคฏ เคाเคा เค्เคฏा เคนोเคคा เคนै? เคญाเคฐเคคीเคฏ เค
เคฐ्เคฅเคต्เคฏเคตเคธ्เคฅा เคชเคฐ เคเค्เค เคฐाเคเคोเคทीเคฏ เคाเคे เคे เคช्เคฐเคญाเคตों เคा เคตिเคถ्เคฒेเคทเคฃ เคीเคिเค। เคเคธे เคจिเคฏंเคค्เคฐिเคค เคเคฐเคจे เคे เคเคชाเคฏ เคธुเคाเคเค।" ✍️ Answer in English (UPSC Mains Format) Introduction Fiscal deficit refers to the difference between the government’s total expenditure and its total revenue (excluding borrowings). It reflects the extent to which the government is spending beyond its means and is an important indicator of macroeconomic health. Formula: Fiscal Deficit = Total Expenditure – (Revenue Receipts + Non-Debt Capital Receipts) Body 1. Implications of High Fiscal Deficit Inflationary Pressure : Excessive borrowing can lead to increased money supply and inflation. Crowding Out of Private Investment : Government borrowing raises interest rates, reducing private secto...