Fiscal Stress in India an Investigation into Budget Deficit and Reformoriented Solutions

India’s budget deficit has been a recurring economic challenge over the past few years, reflecting the imbalance between government revenue and expenditure. This research analyzes the primary reasons behind India’s fiscal deficit from 2021 to 2025, focusing on factors such as rising government spending on welfare schemes, subsidies, and infrastructure, alongside limited growth in tax and non-tax revenues. The study also explores India’s key income sources, including direct and indirect taxes, public sector enterprises, and non-debt capital receipts. Furthermore, it evaluates strategies to enhance national income and reduce the deficit through improved tax compliance, promotion of exports, privatization of loss-making enterprises, diversification of income sources, and digitalization of financial systems. By examining data from the Union Budget, Economic Survey, and reports from financial institutions, this research provides insights into sustainable fiscal management and policy measures required for long-term economic stability in India.