Abstract:
The present study examines the role of various components of pub-
lic expenditures on economic growth in India during the period
from 1980 to 2013. The study used ARDL approach to examine
the long run and the short run dynamic relationship. The VECM
based Granger causality test is utilized to check the direction of
causality. The results reveal that there exists a long run cointegrat-
ing relationship between economic growth, developmental expen-
diture, fiscal deficit and gross private investment. The ARDL es-
timates show significant positive long run impact of development
expenditure on economic growth. However, the non development
expenditure and revenue expenditure reveal insignificant impact on
economic growth. The causality test estimates indicate short and
long run unidirectional causality running from development expen-
diture and fiscal deficit to economic growth in India