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Fiscal Policy Issues for India after the Global Financial Crisis (2008–2010)


  • Rajiv Kumar


  • Alamuru Soumya


The need for fiscal consolidation and sustainability is one of the key macroeconomic issues confronting Indian economy. This paper attempts to understand India’s current fiscal situation, its likely future development, and its impact on the economy in the context of a weak global recovery from the current crisis. The impact of the global crisis has been transmitted to the Indian economy through three distinct channels, namely: the financial sector, exports, and exchange rates. The other significant channel of impact is the slump in business and consumer confidence leading to decrease in investment and consumption demand. The Indian government, to boost the demand, has announced several stimulus packages. [ADBI Working Paper No. 249]

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  • Rajiv Kumar & Alamuru Soumya, 2010. "Fiscal Policy Issues for India after the Global Financial Crisis (2008–2010)," Working Papers id:2912, eSocialSciences.
  • Handle: RePEc:ess:wpaper:id:2912 Note: Institutional Papers

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    References listed on IDEAS

    1. Elmendorf, Douglas W. & Gregory Mankiw, N., 1999. "Government debt," Handbook of Macroeconomics,in: J. B. Taylor & M. Woodford (ed.), Handbook of Macroeconomics, edition 1, volume 1, chapter 25, pages 1615-1669 Elsevier.
    2. Singh, Nirvikar & Srinivasan, T. N., 2004. "Fiscal Policy in India: Lessons and Priorities," Santa Cruz Center for International Economics, Working Paper Series qt67t3p20w, Center for International Economics, UC Santa Cruz.
    3. Carmen M. Reinhart & Kenneth S. Rogoff & Miguel A. Savastano, 2003. "Debt Intolerance," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(1), pages 1-74.
    4. Paolo Mauro & Mark A Horton & Manmohan S. Kumar, 2009. "The State of Public Finances; A Cross-Country Fiscal Monitor," IMF Staff Position Notes 2009/21, International Monetary Fund.
    5. Laurence Ball & N. Gregory Mankiw, 1995. "Relative-Price Changes as Aggregate Supply Shocks," The Quarterly Journal of Economics, Oxford University Press, vol. 110(1), pages 161-193.
    6. Hamilton, James D & Flavin, Marjorie A, 1986. "On the Limitations of Government Borrowing: A Framework for EmpiricalTesting," American Economic Review, American Economic Association, vol. 76(4), pages 808-819, September.
    7. World Bank, 2009. "Global Economic Prospects 2009 : Commodities at the Crossroads," World Bank Publications, The World Bank, number 2581.
    8. T. N. Srinivasan & Suresh D. Tendulkar, 2003. "Reintegrating India with the World Economy," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 98.
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    Cited by:

    1. Kevin S. Nell, 2015. "The Complementary Nature Between Technological Progress and Capital Accumulation in India's Long-Run Growth Transitions," Metroeconomica, Wiley Blackwell, vol. 66(4), pages 565-605, November.
    2. Supriyo De, 2012. "Fiscal Policy in India: Trends and Trajectory," Working Papers id:4751, eSocialSciences.

    More about this item


    fiscal consolidation; sustainability; macroeconomic; global crisis; financial sector; exports; GDP; government; demand;

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