To achieve sustainable economic growth of a country balanced budget is not only important but necessary. This research aims at investigating the true impact of the budget deficit on the economic growth of the country. The sample taken for the current study comprises of time-series considering period of 1978-2009. Regression analysis is conducted to ascertain the impact of BD on the GDP, and explored a negative impact of budget deficit on the economic growth. Some policies are suggested for the government to avoid certain levels of the budget deficit to achieve desired level of growth.