Fiscal deficit is very harmful for an economy,
so government always tries to reduce the massive deficit
and the one process is to earn high tax revenue and other
process is to less expenditure but in developing or
underdeveloped country, it is very tough to cut the
expenditure but government can earn more tax revenue
from industries if the industries can earn more profit.
Here the big push model will be applied. This model
asserts that the big push will be imposed in a country
and the investment on modern sector will grow up and
they will be profitable and government can earn more
tax by increasing tax base not raising the tax rate and
due to more modern sector the unemployment problem
will be reduced and as a result the expenditure will be
lowered and fiscal deficit will be reduced for long run
and here I will consider three equilibria and one is bad,
nd is good and last is very good and after modernising
industries the equilibrium will shift consecutively and
fiscal deficit will reduce.
Keywords : Fiscal Deficit; Big Push; Tax Revenue; Modern Sector.