Study reveals India's fiscal deficit impacts current account balance dynamics
The study looked at how India's government spending and trade balance are connected. They used data from 1996 to 2016 and found that when the government spends more than it earns, the trade balance also worsens. This means that a high government deficit can lead to a higher trade deficit. The results suggest that to keep both deficits low, India needs to manage its spending and trade carefully.