High fiscal deficit in India can lead to higher interest rates, which can crowd out private investment. A study analyzed data from 1980 to 2014 and found that fiscal deficit and interest rates are positively related in the long run. Money supply and inflation, on the other hand, have a negative impact on interest rates. In the short term, inflation influences interest rates. The study suggests that India needs to focus on fiscal consolidation to control high deficits and interest rates, moving away from market borrowing towards tax revenue.