Fiscal Deficit and Public Debt in India-The Recent Trends and Implications

An excess of the annual budgeted expenditure of the government over the total non-debt revenue that it expects to raise during the year shows a fiscal deficit in the budget. Such a deficit in the budget is financed through public borrowing, either internally or externally, deficit financing, giving rise to an accumulation of public debt in the country. This paper is an attempt at analyzing the trends in the volume of fiscal deficit and public debt in India during the period 2000–01 to 2016–17 and at highlighting their implications. The analysis is confined to the study of the fiscal deficit and public debt of the central Government of India and does not consider the budgetary deficits and public debt incurred by the state governments in the country.