Tradeoff among Defense, Environment and Development Expenditure: Evidence from India

Abstract

This paper is set out to find the relationship, if any, between Defense spending, Economic development spending and environment spending for India, and to discuss the policy implications of the empirical results. Since India has one of the largest defense budgets within the Asian countries as well as Quadrilateral Security Dialogue (Quad). The Quad is a strategic forum of informal nature. It comprises four nations, namely – India, Australia, USA and Japan. One of the primary objectives of the Quad is to work for a free, open, prosperous and inclusive Indo-Pacific region. This question has important implications for India’s future economic well-being and political stability. Taking into account the difficulties present in previous military expenditure studies, an econometric model was specified and empirically tested using Indian data for 2010-2020. Results suggested that there is a positive linkage between military expenditure and economic development, but the relationship between military expenditure and environment cannot be concluded. The part of the empirical study tested the defense-development relationship for India using expenditures on health and education as development proxies. The empirical findings suggested that there are tradeoffs between military expenditures and development expenditure. However, there seems to be a positive relationship between military expenditures and education but has no clear picture for environmental spending compared to both defense expenditure and development expenditure.