Introduction In economics, the fiscal multiplier is the ratio between the change in GDP due to the change in public spending. When this multiplier exceeds one, the enhanced effect on GDP is called the multiplier effect. The mechanism that can give rise to a multiplier effect is that an initial incremental amount of spending can lead to an increase in consumption, a further increase in income and then a further increase in consumption, etc., resulting in an increase overall GDP greater than the increase in public spending. .An increase in government spending or a reduction in net taxes is always aimed at increasing aggregate production (Y). The main goal is to stimulate the economy, but this can lead to many problems such as inflation, budget deficit due to the debt needed to finance the deficit. Before finding out what are the best options to stimulate any economy, we must first understand the concept of multiplier. In the following report we first tried to clarify the concept of multiplier, then we continued to explain various theoretical aspects of taxation. multiplier, public spending multiplier and planned investment multiplier. So we tried to compare the change in expenditure and change in GDP in the Indian economy by providing data extracted from a secondary source. After analyzing the data and theory, we have provided our conclusion that cutting climate taxes is better to stimulate the Indian economy. is growth or public spending? This report explains the major macroeconomic debates of current times. It seeks to explore the debate within fiscal policy itself between tax cuts and government spending. We have tried to explain the topic through some theories and through some data collected from the Indian economy... middle of paper... the recipients of these tax cuts may not spend the money. However, the tax cut could increase the wealth of the beneficiaries, but they may not spend money due to the low marginal propensity to consume. The recipient of the tax cut may decide to save the extra amount of money instead of spending it. Without spending there will be no income generated, so this may not simulate the growth of the entire economy. In our opinion, government spending is better than tax cuts. Government spending increases employment and income of the country's population, although tax cuts only increase the wealth of people who may not spend the extra money they earn and help the economy grow. References: http:// www.indiastat.com/default.aspxhttp://econospeak.blogspot.in/2009/12/fiscal-stimulus-spending-increases-v.htmlhttp://en.wikipedia.org/wiki/ Fiscal_multiplier