The Impact Of Fiscal Deficit On Economic Growth

1377 words - 6 pages

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

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.
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...

Find Another Essay On The Impact of Fiscal Deficit on Economic Growth

The Impact of the Central Bank and Long run Economic Growth on the Economy

1129 words - 5 pages Introduction To what extent is the central bank responsible for stabilizing the economy? Is LREC really vital to economic growth? In this assignment I will look deeper into these questions. This is important because economic stability depends on it, and without giving this topic thought thousands of households could be facing another looming recession. In this essay I will evaluate the three questions given with regards to the central bank and

Composition of Fiscal Instruments Affects Economic Growth in Brazil

970 words - 4 pages Findings This analysis of the results provides good evidence that the composition of fiscal instruments affects economic growth to a certain level. Interestingly, the findings show effects of capital spending on growth to exceed those of GCE in both regressions 4.1 and 4.2, which is in line with commonly held, views. Capital spending has a positive and significant coefficient with the best output elasticity of 0.502. Supporting Luiz R. De Mello

American Fiscal Policies and Economic Growth

2050 words - 9 pages American fiscal policies and economic growth Fiscal policy refers to the use of taxation and expenditure to impact on the economy of any country. Specifically, an economy of a country relies on the major instruments of fiscal policy which entails government expenditure on the various sectors of the economy and changes in the taxation system. As a result of the changes that the government can make on the two components for example through the

Impact of Foreign Remittances on Economic Growth and Poverty Reduction in Pakistan

2476 words - 10 pages -December FY13), State Bank of Pakistan statistics stated. OBJECTIVE OF THE STUDY: • To analyze the impact of remittances on poverty and economic growth. • To recommend a policy to improve for economic growth through foreign remittances. • To recommend a policy to eliminate poverty through foreign remittances. HYPOTHESIS: Hypothesis 1: Ho: There is no impact of foreign remittances on poverty reduction. H1: There is impact

Corruption and its Impact on Economic Growth and Development

10433 words - 42 pages negative impact on economic growth.PopulationPopulation growth has an important impact on the rate of growth of an economy. Its relationship with growth is generally negative. As population increases the income of an economy has to be divided among a greater number of people thus leading to a lower GNP per capita and a lower standard of living.Dummies for type of government.The nature and degree of government control over the operations of the

Additional factors which might be considered when examining the impact of Foreign Direct Investment on economic growth. Using Brazil as a case study

3224 words - 13 pages link to several dependant variables which will influence the successful impact of FDI on the economy. This paper accepts this premise and develops the theory further, by suggesting there are additional factors or 'characteristics' of FDI which will facilitate the needed strategic links to the dependant variables. Ignoring these characteristics may lead to the strategic links not eventuating and therefore, the resulting benefits on economic growth

Impact of Fiscal Policy on the Pharmaceuticals Industry

737 words - 3 pages Fiscal policy, Gross Domestic Product, Economics and Classical view of Economics and their overall impact on the likes of a company like Wyeth, a Pharmaceutical Company, and building upon such a correlation is what this article is all about. Fiscal Policy is the other half of the two-legged approach of the government to maintain stability within an economy while trying to maintain the sanctity of things and trying to achieve the targets

The effect of income inequality on economic growth

1479 words - 6 pages become the secret to growth. However, education is hardly accessible to everyone unless a society has a relatively even income distribution 2.Literature The issue I chose to deal with is quite controversial heaving in mind the different opinions of the economist in terms of the effect of the inequality on the economic growth. There have been plentiful arguments on all sides; that inequality does weaken economic growth, that inequality actually

The Desirability of Economic Growth

935 words - 4 pages balance of payments could begin to worsen. If exports suffer and imports penetrate the country - then unemployment may increase in these sectors. ( Evaluation: a country will not necessarily lose its competitiveness straight away. It may take some time before the inflation differential between itself and its trading partners starts to make a difference - so we must be realistic !! ) 2. Fast economic growth, irrespective of the impact on

The Fiscal Policy and its Impact on the GDP

1500 words - 6 pages health of the nation. The United States employs the fiscal policy to monitor and make deliberate changes to escalate or slow down the country’s economy. The fiscal policy process occurs via changing government expenditures and taxes that have a direct impact on the nation’s Gross Domestic Product (GDP). Tax Payers Debt, deficits, and surpluses related to the government budget have a direct impact on tax payers in the U.S. Payment for the

Effects of Corruption on Economic Growth

517 words - 2 pages parameter of economic growth which are taken on percentage or an average basis are entirely differentTo begin with, in the presence of corruption, businessmen are often made aware that an up-front bribe is required before an enterprise can be started and that afterwards corrupt officials may lay claim to part of the proceeds from the investment. Businessmen therefore interpret corruption as a species of tax--though of a particularly pernicious

Similar Essays

The Impact Of China's Modern Foreign Policies On Economic Growth

1113 words - 4 pages The Impact of China's Modern Foreign Policies on Economic Growth Recent Chinese economic policies have shot the country into the world economy at full speed. As testimony of this, China's gross domestic product has risen to seventh in the world, and its economy is growing at over nine percent per year (econ-gen 1). Starting in 1979, the Chinese have implemented numerous economic and political tactics to open the Chinese marketplace to

He Role Of Economic Geography In Economic Development And The Impact Of Ict On Economic Growth

2233 words - 9 pages countries are armed with good communications. On the contrary, some writers believe that geography still matters a great deal for economic interaction and for the spatial distribution of income.To discuss, I will concentrate on the role of economic geography in economic development and the impact of ICT on economic growth. From the existing inequality of economic development, we can see distance still matters in terms of economic transactions and

The Impact Of Early Presidential Foreign And Economic Policies On The Growth Of The Nation

524 words - 2 pages Monroe went into his presidency, it was during the Era of Good Feelings. All the good came to an end when the economic depression brought on by the Panic of 1819 hit the same year during his administration.The charter for the Bank of United States ran out and the economy suffered. Congress passed a protective tariff because of Britain's plan to put Americans out of business. The tariff greatly raised taxes on imports. Henry Clay wanted to promote

The Impact Of The Central Bank And Long Run Economic Growth On The Economy

2173 words - 9 pages for a government to recognise that changes in revenue and expenditure can have an alternative impact on the government revenue & budget, however it may have different effects on economic growth in the long run. This shows true in the example of japan, whilst the £3.4bn stimulus package cost the government greatly it helped to boost japan out of a recession. By doing this, the Japanese government were ignoring the short-term growth of the economy