The Impact Of Fiscal Deficit On Economic Growth

1377 words - 6 pages

Objectives
The main objective of the study is to find out the impact of fiscal deficit on economic growth
Secondary objectives are:
- To find out the trend in Fiscal deficit and Economic growth
- To find out the relationship between Fiscal deficit and Economic growth.
- To find out the mean difference between the levels of Economic growth across the time period
- To find out the mean difference between the levels of Fiscal deficits across the time period

H1: There is a significant impact of Fiscal deficit on the Economic growth
H2: There is significant relationship between Fiscal deficit and Economic growth
H3: There is a significant mean difference between the levels of economic growth across the time periods
H4: There is a significant mean difference between the levels of fiscal deficit across the time periods

Methodology
Data collection
Secondary data which are collected from the Reserve bank of India reports of India have been utilized in this study. Further, textbooks, journals, magazines in the economic perspective were utilized for this study.
Sample
This study was conducted in India perspective, especially on the fiscal deficit and economic growth. Data on the fiscal deficit and economic growth from the year 1970 to 2010 were collected for the study purpose.
Data analysis method
Various statistical methods have been employed to compare the data. Descriptive statistics used to test the sample characteristics. Time series analysis was also carried out to identify the trends over the last forty years. Inferential statistics involves in drawing conclusions about a population based only on sample data. It includes regression analysis, Correlation analysis and independent sample one-way ANOVAs (f-test). Regression analysis is used to find out the significant impact of fiscal deficit on economic growth. Correlation analysis is used to find out the significant relationship between fiscal deficit and economic growth. And also, f-test is used to identify the significant mean difference between the levels of fiscal deficit and economic growth across the periods of time.

Tools used: IBM SPSS statics 20, excel

Design of the variables: Operationalization and Measurement of Variables

Results and Interpretation
Descriptive Statistics
Descriptive statistics were carried out to verify the sample characteristics. In a way, Mean, and Standard deviation are used to describe the variables and the output is shown in the Table- 02.

Table No 2: Descriptive Statistics

Variable Range Mean SD Co-variance
Economic Growth 15.4 5.753659 0.451665 8.364049
Fiscal Deficit 5.6 5.302683 0.216449 1.92085

Based on the Descriptive analysis, the Indian economy has achieved the 6 percentage growth level approximately for recent four decades. Due to that, we should have responsibility to believe whether these achievements are in the effective or not. When we...

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