Impact Factor
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Volume 12 Issue 07
July 2026
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Abstract
This Study Investigates The Impact Of Government Expenditure On Economic Growth In India, Using Annual Data From1980 To 2022. The Study Employs The Autoregressive Distributed Lag (ARDL) Model To Examine The Long-run And Short-run Relationships Between Government Expenditure And Economic Growth. The Results Indicate That Government Expenditure Has A Positive And Significant Impact On Economic Growth In The Long Run. Specifically, A 1percentage Increase In Government Expenditure Leads To A 0.23persentage Increase In Economic Growth. However, The Shortrun Relationship Is Found To Be Negative, Suggesting That Government Expenditure Can Have Acrowding-out Effect On Private Investment In The Short Term. The Study Also Finds That The Impact Of Government Expenditure On Economic Growth Varies Across Different Sectors, With The Highest Impact Observed In The Infrastructure Sector. The Findings Of This Study Have Important Implications For Policymakers In India, Highlighting The Need To Prioritize Government Expenditure In Strategic Sectors To Promote Sustainable Economic Growth.
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Paper ID
IJSARTV11I4103381
Publication Date
April 28, 2025
Research Area
Economics