How does India's fiscal deficit effect the common man ?
India’s **fiscal deficit**—the gap between the government’s total spending and its revenues (excluding borrowings)—has direct and indirect consequences for the common man. Here’s how it impacts daily life, savings, and the broader economy: --- ### **1. Higher Taxes & Reduced Subsidies** - **Why?** To bridge the deficit, the government may: - **Increase taxes** (e.g., higher GST, income tax slabs, or fuel taxes). - *Example*: A 1% rise in GST on essentials (like packaged food) directly increases household expenses. - **Cut subsidies** (e.g., LPG, fertilizers, food grains under PDS). - *Example*: A ₹50/kg reduction in urea subsidy raises farmers’ input costs, leading to costlier vegetables. **Impact**: Reduced disposable income for middle- and lower-income families. --- ### **2. Inflation & Cost of Living** - **Borrowing-Driven Spending**: - The government borro...