Volume : 2, Issue : 2, February - 2013

An Empirical Analysis of Effect of Per Capita Income on Government Expenditure in Gujarat State of India

Dr. S. A. Saiyed

Abstract :

This paper tries to find out that how per capita income determines government expenditure in the Gujarat State of India during a period of 1990–91 to 2004–05. Cross–sectional relationship is expected between year–wise per capita income and year–wise government expenditure in the Gujarat State of India, for the study period 1990–91 to 2004–05. The relation between cross–sectional per capita income and year–wise number of government expenditure in the Gujarat State of India is estimated by a two variable regression model analysis. Cross–sectional analysis of data showed significant causal relationship between year–wise number of per capita income and government expenditure. Increase in per capita income in Gujarat State of India has increased government expenditure.