Fiscal Multipliers for India

Sukanya Bose () and N R Bhanumurthy

Working Papers from National Institute of Public Finance and Policy

Abstract: This paper attempts to present a framework for the estimation of fiscal multipliers for the Indian economy in the structural macroeconomic modelling tradition. Empirical estimates of short-run multipliers are obtained by giving shocks to a range of fiscal instruments - expenditures and taxes. As per our estimates, the values of capital expenditure multiplier, transfer payments multiplier and other revenue expenditure multiplier are 2.45, 0.98, and 0.99, respectively, while the tax multipliers are in the range of -1. Expenditure multipliers were also obtained in the presence of fiscal consolidation targets. These estimates again point to the strong multiplier effect of capital expenditure on output, and underscore the need to prioritize capital expenditure.

Pages: 23
Date: 2013-09
New Economics Papers: this item is included in nep-pbe and nep-pub
Note: Working Paper 125, 2013
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Citations: View citations in EconPapers (4)

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Journal Article: Fiscal Multipliers for India (2015)
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