Analysing the Relationship of Fiscal Indicators and Economic Growth: A Study of Brics Economies with Special Reference to India

Abstract

Initially, the current study investigated the empirical relationship between public revenue, government spending, and economic growth in BRICS countries. This study evaluates the BRICS economies' economic growth from 2000-01 to 2020-21. The study sought to identify the most successful drivers of economic growth in BRICS countries, as well as existing fiscal metrics such as health and education expenditure. The findings suggest that increased government health spending will result in higher real GDP. The BRICS countries' education spending has to be addressed. PDA results reveals that the fixed effect model is more appropriate for BRICS than the cross-section random effect model, using GDP growth rate and GDP-PPP as endogenous variables. In other words, for BRICS, the time-variant effect is negligible, while intercountry variance in variables is significant. The findings also indicate a greater reliance on current health and education. It is time for BRICS to focus on these in order to boost economic growth. The key policy implication is that there is no better way to defend the BRICS countries' fiscal systems than to invest in their healthcare and education systems. The findings show that BRICS countries will function better if more resources are transferred from government revenue collection and allocated to public sector investment. The current study examines the relationship between economic growth, government spending, and public revenue in seventeen Indian states from 1990-91 to 2020-21. The link between important fiscal policy variables and economic growth was examined using a panel data technique, the Generalized Method of Moments (GMM), and fully modified Ordinary Least Squares (FMOLS & DOLS) estimates. In this study, the effects of non-tax revenue, development plan spending, tax revenue, and development non-plan expenditure were evaluated on (i) the net state domestic product (NSDP) and (ii) the NSDP per capita. The results show that the selected fiscal factors are significantly connected. The results imply that rapid expansion of the fiscal sector is necessary to drive economic growth in India and advance the actual development of the economies of these states. The current study also looked into the empirical relationship between public revenue, government spending, and economic growth in India. The findings indicate a need to concentrate on tax collections. The government should increase capital project development expenditures since doing so will accelerate net state domestic product growth and the economy