AN ANALYTICAL STUDY OF FISCAL CONSOLIDATION IN INDIA

The success of fiscal consolidation in India highlights the importance of this approach for sustainable improvement of government finances leveraging revenue and expenditure reforms and debt-mix adjustment process. The study investigates the intricacies of policy consolidation in India with focus on the underlying structural, macroeconomic and institutional dimensions. The research findings listed several hurdles such as fiscal discipline, budget deficits, public debt, and space for productive public investments. The authors emphasize the need to find the right equilibrium between strengthening investor confidence, aiding in long-term economic growth, curtailing fiscal imbalances, and stimulating broad-based growth within the context of fiscal sustainability. A paper examining the policy challenges around improving fiscal balances, the paper assesses ways to reducing deficits, stabilising debt-to-GDP ratios and achieving fiscal sustainability. It discusses challenges in achieving macro stability, efficiency in the use of resources, sustainable debt levels and economic sustainability, in the Indian economic environment. In addition, the research highlights how important it is to have an agile policy-making capacity to respond to economic challenges and deploy counter-cyclical policies that help to facilitate economic recovery and build resilience. The narrative in India thus suggests that fiscal consolidation, although necessary for fiscal discipline and economic stability — and a precursor for sustainable growth — is difficult to achieve and needs the benefit of doubt to protect the health and immunity of the Indian economy. KEY WORDS: Fiscal consolidation, structural , institutional, economic policy.