What are the reasons behind the consistent fiscal deficit in India? Do you think there are advantages in operating with a fiscal deficit for developing countries like India? (Answer in 150 words)

Reasons behind consistent fiscal deficit (1) Weighing: Focusing on social sector spending to pull a vast majority of people out of poverty. Example: Upskilling on Right to education and MGNREGA (2) Improper tax/revenue collection due to tax evasion and lack of effective implementation of tax laws. (3) Economic slowdown further decreasing GDP figure of 6.4% in FY25 expected to above 8% in FY24. (4) Increased spending as economic stimulus due to slowdown. Example: Deficit rose to 9.2% during 2020-21 due to COVID Advantages of fiscal deficit in emerging markets: (1) Equitable distribution of resources, meeting welfare goals. Example: Tax money used to fund Pradhan Mantri Abhiyaan (2) Economic stimulus capability in case of economic downturn. Example: Success of Aatmanirbhar Abhiyaan package is uncerainty economy. (3) Economic stimuli capacity in case of economic downturn. Example: Success of Aatmanirbhar Abhiyaan package in uncertanity economy. Hence fiscal deficit with intrepid must be dealt responsibly according NK Singh Committee