This study investigated the cyclicality of fiscal policy in India at the Centre, State, and combined Centre - State level by employing three alternative methods. The period of analysis extended from 1970-71 to 2013-14. In general, the study finds pro-cyclicality behavior of expenditure in case of India. Revenue expenditure, primary revenue expenditure, capital outlay, and total expenditure were found to be pro-cyclical at the Centre and combined Centre - State level. Capital outlay was found to have more pro-cyclicality as compared to other expenditure categories both at the Centre and combined Centre - State level. However, at the State level, capital outlay was not found to have any cyclical relation with output.

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