Fiscal Discipline refers to a state open in ideal balance between revenue and expenditure of the government. It calls for the necessary check on the expenditure in view of the limited revenues of the government.
Lack of fiscal discipline often causes excess expenditure. It lead to inflationary spiral: a situation when wages catch prices and prices catch wages. High cost of production starts hurting the process of investment. Reduction in investment causes Unemployment. The economy sinks into a low level of equilibrium trap.