The Effect of Fiscal Deficit on Wpi in India

In: Business and Management

Submitted By swarupp
Words 3686
Pages 15


Submitted by, Group 7 – Sec A
Ankit Rout (U111007)
Chinmaya Swain (U111017)
Kavindra Sharma (U111027)
Nikhil Lukose (U111037)
Samik Bhattacharjee (U111047)
Swarup Kumar Mishra (U111057)


We would like to express our whole-hearted gratitude to all those who have helped with the report or have been associated with the report in any way and made it a worth-while experience.

We are greatly indebted to our batch mates and our seniors for having shared their invaluable thoughts and opinions that went a long way in helping us gather information and analyse issues for the report.

And, a special mention of Professor Latha Ravindran, whom we cannot thank enough for having given us the opportunity and her total support for working on this project and completing our report.

Thank you.

For the last several years the GDP of India has been growing rapidly. The real GDP growth of India averaged 8.5% in the five years ending March 2010. But at the same time food price inflation and consumer price inflation too have been on the increasing curve. The relationship between fiscal deficit and inflation which is measured by WPI in India is an important issue in macroeconomics study. The main purpose of the study is to analyze the relationship between budget deficit and Whole Sale Price Index. The fiscal deficit influences demand and thereby inflation management of any country. So any increase in fiscal deficit will impact the management of inflation and WPI.
Fiscal deficit
It is government's total expenditures minus the total revenue that it generates (excluding money from borrowings). Deficit is different from debt, which is an accumulation of yearly deficits. The total borrowing requirement…...

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