IMPACT OF FISCAL DEFICIT ON ECONOMIC GROWTH: AN EMPIRICAL STUDY OF INDIAN ECONOMY

This study has been undertaken so as to establish the impact of fiscal deficit on the growth of gross domestic product. In order to achieve the objective of the study, the researcher has taken a reference period of fifteen years from 1999-2000-20013-2014. The researcher has employed linear regression model and Pearson?s correlation model. The findings of the study through linear regression model confirm that the independent variable (Fiscal Deficit)is significant in causing a change in the dependent variable (Gross Domestic Product).Besides, the results of Pearson?s correlation model also affirm a negative relationship between the variables under study at 0.05 level of significance. The findings of the study corroborates with the findings of Mohammad et.al. (2010), Vincent et.al. (2012), Gemme (2001), Hernes and Censink (2001) and Candan (1983) as all these studies also established a negative relationship between fiscal deficit and gross domestic product.