India's fiscal deficit has gone up by 23% to Rs. 3.80 lakh Cr. in the first eleven months of this fiscal mainly because of the overruns due to the stimulus measures taken by the government during the slowdown last year.
Lets look back to the history , when in 1930 there was the great depression in the world economy at that time Keynes came up with a solution in his great piece of work "The General Theory" that if at the times of recession government provide investments then it helps in increase in demand and overcoming from the situation of recession , same thing can be seen here but now we can also see the drawbacks of the same coming up in the form of Inflation, fiscal deficit and many more .
To deal with such situation now government is coming up with various measures such as in the budget 2011, the government has raised excise duty by 2% to 10% and enhanced tax rates on other products making consumer goods like cars etc, apart from this there are disinvestment polices as well.
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