Fiscal Discipline and Its Relationship with Economic Growth in India: Evidence-based Policy Analysis
| Published date | 01 December 2023 |
| DOI | http://doi.org/10.1177/00195561231166851 |
| Author | Satyanarayana Murthy Dogga,Princy Tak,Jeevan Kumar Cheruku |
| Date | 01 December 2023 |
| Subject Matter | Articles |
Fiscal Discipline and
Its Relationship with
Economic Growth in
India: Evidence-based
Policy Analysis
Satyanarayana Murthy Dogga1, Princy Tak2 and
Jeevan Kumar Cheruku3
Abstract
This study attempts to make an empirical analysis to evaluate the procedural pro-
gress of India in terms of public policy parameters. The study constructs a com-
posite Fiscal Performance Index (FPI) for the period 1990–2018. The reported
values show that the FPI has been significantly increasing over the last two-three
decades. However, it is clearly evident that the fiscal discipline was slightly poor
during the period 1998–1999 to 2003–2004. Since 2003–2004, there has been a
consistent increasing trend in the fiscal discipline till 2007–2008 global financial
crisis. The constructed index was further utilised to establish its relation with
economic growth. The causal relationship from FPI to GDP growth is evident
in the long run. The study suggests that, as a federal nation, the Central govern-
ment should encourage governments at all levels to promote fiscal discipline by
formulating macroeconomic policies in line with the Fiscal Responsibility and
Budget Management Act, 2003.
Keywords
Economic growth, fiscal policy, fiscal sustainability, Fiscal Responsibility and
Budget Management (FRBM) Act, 2003
Article
Indian Journal of Public
Administration
69(4) 753–765, 2023
© 2023 IIPA
Article reuse guidelines:
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DOI: 10.1177/00195561231166851
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1 Department of Economics, Central University of Rajasthan, Bandarsindri, Kishangarh, Ajmer,
Rajasthan, India.
2 Department of Extension Education, Regional Institute of Education, Ajmer, Rajasthan, India.
3 Department of Public Policy, Law and Governance, Central University of Rajasthan, Bandarsindri,
Kishangarh, Ajmer, Rajasthan, India.
Corresponding author:
Princy Tak, Department of Extension Education, Regional Institute of Education, Ajmer, Rajasthan
305004, India.
E-mail: princytak2@gmail.com
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