India and Fiscal Austerity



The global financial crisis and the “Great Recession“ of 2007-9 catalyzed a remarkable consensus across all major countries for remedial action in the form of strongly expansionary fiscal and monetary policies. However, by 2010, in industrial countries, the consensus in favor of strong fiscal stimulus had been rent by growing calls for fiscal prudence and austerity. In India, where fiscal austerity has been notable by its absence over the last thirty years, the narrative runs somewhat differently. Fiscal deficits have generally been high, though they have not engendered high growth. Indeed the two periods of fastest growth, 1992-97 and 2003-08, were both associated with significant fiscal consolidation. And the resurgence of high deficits after 2008 has contributed to the recent slowdown in investment and growth. Hence, the ongoing industrial nation debates on austerity versus stimulus may have little practical relevance for India’s current fiscal priorities.


Gross Domestic Product Fiscal Policy Real Interest Rate Great Recession Current Account Deficit 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.


  1. Acharya S (2006) Essays on macroeconomic policy and growth in India. Oxford University Press, New DelhiGoogle Scholar
  2. Acharya S (2010) Macroeconomic performance and policies, 2000–2008. In: Acharya S, Mohan R (eds) India’s economy: performance and challenges. Oxford University Press, New DelhiGoogle Scholar
  3. Acharya S (2012a) India after the global crisis. Orient Blackswan, New DelhiGoogle Scholar
  4. Acharya S (2012b) India and the global crisis. In: Bergsten CF, Henning R (eds) Global economics in extraordinary times. Peterson Institute for International Economics, Washington DCGoogle Scholar
  5. Ahluwalia MS (2002) Economic reforms in India since 1991: has gradualism worked? J Econ Perspect 16(3):67–88CrossRefGoogle Scholar
  6. Joshi V, Little IMD (1996) India’s economic reforms, 1991–2001. Oxford University Press, New DelhiGoogle Scholar
  7. Panagariya A (2008) India: The emerging giant. Oxford University Press, New YorkGoogle Scholar

Copyright information

© Springer India 2014

Authors and Affiliations

  1. 1.Indian Council for Research on International Economic Relation (ICRIER)New DelhiIndia

Personalised recommendations