Volume : 1, Issue : 7, December - 2012

Bi–Directional Causal Relationship Between Economic Growth and Growth of Public Expenditure in India

Dr. S. A. Saiyed

Abstract :

This paper tries to investigate Bi–directional causal relationship between Economic Growth and Growth of Public Expenditure in India during the Post Economic Reforms period from 1992 to 2012. First, impact of Economic Growth on Public Expenditure is investigated and then influence of Public Expenditure on Economic Growth is examined during 1992 to 2012. Here in this study cross–sectional relationship is estimated between year–wise National Income (GDP) and Public Expenditure in India, for the study years 1992 to 2012. Cross–sectional analysis of data from 21 years during 1992 to 2012 of India showed significant Bi–directional causal relationship between year–wise number of National Income (GDP) and Public Expenditure.