This study analyzes how human development is shaped in the presence of fiscal deficit. Thus there is a link between fiscal deficit and human development. It may be positive, negative or neutral. Various theories like Neoclassical, Keynesian and Ricardian Equivalence describe the kind of relationship that occurs between fiscal deficit and human development. Human development is defined as “Multidimensional achievement and an aggregate of attainment level of some basic human functionings” (Suescan, 2007). It is multi dimensional because it encompasses not just income but other achievements like education and quality of life. One of the proxies to gauge human development is the Human Development Index (HDI). It was developed by UNDP in 1990.HDI is a quantitative approach and is able to differentiate between standard of living and income which is not possible in case of GDP per capita. Supervisor:- Dr. Nazia Bibi