An Empirical Analysis of Social Sector Expenditure and Economic Growth in India: An ARDL Approach
DOI:
https://doi.org/10.17010/aijer/2024/v13i2/173504Keywords:
economic growth
, social sector expenditure, medical and public health, autoregressive distributed lagged (ARDL), sports and culture.JEL Classification Codes
, E62, H51, H52, H53, O4Paper Submission Date
, July 25, 2023, Paper sent back for Revision, February 15, 2024, Paper Acceptance Date, March 5, 2024Abstract
Purpose : The current analysis examined the relationships between spending in India’s social sector and economic growth between 1990–1991 and 2019–2020.
Methodology : This study is based upon secondary data and includes different sections such as descriptive, unit root, cointegration, bounds tests, and autoregressive distributed lagged (ARDL) model. The variables amalgamated in the study are economic growth ; education; sports, medical, and public health ; urban development; art and culture ; social security and welfare; and gross fixed capital formation (GFCF). Analysis was conducted by using EViews 10 software.
Findings : The findings of the analysis demonstrated a significant long-term correlation between social sector spending and India’s economic growth. The results demonstrated that, over time, the factors of GFCF, sports, education, and public and medical health — all had a beneficial impact on economic growth. However, in the short and long terms, social security, welfare, and urban development had a detrimental impact on economic growth.
Practical Implications : The results offered policymakers useful takeaways, highlighting the necessity of giving investments in industries like healthcare and education priority while addressing the detrimental effects of urban development and social security on economic growth. Future studies could examine the underlying causal processes of the associations that have been identified and evaluate the efficacy of particular policy measures in fostering sustainable economic development.
Originality : The study is novel because it is used to conduct a thorough analysis of the relationship between social sector spending and economic growth in India. The research added to the body of knowledge on development economics by providing in-depth insights into the dynamics of this relationship and an ARDL approach by combining a variety of social sector components and control variables.
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