An Empirical Investigation of Public Expenditure on Education and Economic Growth in Gujarat

Abstract

Public expenditure plays a vital role in the growth and development of a nation, and public expenditure on education considered as a most contingent factor of growth in the economy. This paper aims to know the relationship between public expenditure on education and Gross State Domestic Product (GSDP) in Gujarat for the period 1998-2017 by using ARDL Model. The trend analysis of public expenditure on education shows that spending on education is moving in an upward direction at a constant rate. The OLS regression analysis reveals that public expenditure on education is contributing 67% changes in GSDP. Further, the result shows there is a positive short-run relationship between public expenditure on education and GSDP which give a fruitful result in the long run.