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УДК 336.5:330.35(540)
Vinayagam Ashwin, student of the International Medical Institute, Kursk State Medical University, Kursk, Russia
Email: [email protected]
THE IMPACT OF GOVERNMENT EXPENDITURE ON ECONOMIC
GROWTH IN INDIA
Abstract: the article describes how various government expenditures impact the economic growth of India. Infrastructre development, education, healthcare and welfare expenditures are discussed.
Keywords: government expenditure, economic growth
Винаягам Ашвин, студент Международного медицинского института Курского государственного медицинского университета, Курск, Россия. E
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a ВЛИЯНИЕ ГОСУДАРСТВЕННЫХ РАСХОДОВ НА ЭКОНОМИЧЕСКИЙ i РОСТ В ИНДИИ
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d Аннотация: в статье описывается, как государственные расходы влияют на экономический рост Индии. Исследуются расходы на развитие инфраструктуры, образования, здравоохранения и социального обеспечения.
a Ключевые слова: государственные расходы, экономический рост p
a Government expenditure plays a crucial role in shaping the economic outlook of a country. In the context of India, the impact of government spending on economic growth has been a topic of substantial debate and research. As one of the world's largest
ISSN: 2414-0309 1
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and fastest-growing economies, understanding the relationship between government expenditure and economic growth in India is essential for policymakers, economists, and citizens alike. Government expenditure encompasses a wide range of areas, including infrastructure development, education, healthcare, defense, welfare programs, and public administration. The allocation of funds in each of these areas has significant implications for economic growth and development. Understanding how government spending influences economic growth in India requires a careful examination of the various channels through which it operates.
One of the most significant ways in which government expenditure can impact economic growth is through infrastructure development. Investments in roads, bridges, ports, and other essential infrastructure not only create jobs and stimulate demand but also lay the foundation for sustained economic development. In India, improving infrastructure has been a key priority for the government, especially in the areas of transportation, energy, and digital connectivity. Increased government spending on infrastructure projects can lead to enhanced productivity, reduced transportation costs, and improved access to markets, all of which are essential for economic growth. Moreover, infrastructure development can attract private investment, fuel industrial growth, and facilitate the efficient movement of goods and services. Therefore, sustained government expenditure in this area can have a multiplier effect on the economy, leading to higher levels of investment, production, and employment [1].
Government expenditure on education and healthcare is another critical area that can significantly influence economic growth. Investing in human capital through education and healthcare programs can lead to a more skilled and healthy workforce, ultimately boosting productivity and overall economic output. In India, initiatives such as the National Health Mission and the Sarva Shiksha Abhiyan demonstrate the government's commitment to improving the quality of education and healthcare services [2]. By allocating resources to education, the government can increase access to quality schooling, enhance skills training, and promote innovation and research. Similarly, investments in healthcare can lead to a healthier population, reduced medical
expenses, and increased labor force participation. A well-educated and healthy workforce is essential for driving economic growth and ensuring long-term prosperity.
Government expenditure on welfare programs, such as subsidies, social security, and poverty alleviation schemes, also plays a significant role in shaping economic growth. While critics argue that excessive welfare spending can lead to inefficiency and fiscal burden, targeted welfare programs can help reduce inequality, enhance social mobility, and stimulate consumption, thereby positively impacting economic growth. In India, the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) and the Public Distribution System (PDS) are examples of welfare programs aimed at poverty reduction and food security. By providing income support and access to essential commodities, these programs can help boost the purchasing power of low-income households and drive consumer demand, thereby stimulating economic activity [3].
Apart from specific areas of expenditure, overall government spending has broader implications for macroeconomic stability and growth. Fiscal policy, which encompasses government spending and taxation, can be used to influence aggregate demand and stabilize the economy. In India, prudent fiscal management and effective allocation of resources are integral to ensuring macroeconomic stability and sustainable growth. Excessive government spending, if not accompanied by adequate revenue generation, can lead to inflationary pressures and fiscal imbalances. On the other hand, inadequate government expenditure may hinder public investment, infrastructure development, and social welfare, ultimately impeding long-term economic growth. Therefore, striking the right balance in government expenditure is essential for promoting economic growth while maintaining fiscal discipline [1].
While government expenditure can have a positive impact on economic growth, there are several challenges that need to be addressed. These include issues such as inefficient allocation of funds, leakages, corruption, and bureaucratic hurdles, which can hamper the effectiveness of government spending. Additionally, the growing burden of public debt and the need for revenue mobilization pose substantial challenges
to sustaining high levels of government expenditure. To maximize the impact of government expenditure on economic growth, it is crucial to enhance transparency, accountability, and efficiency in public spending. Embracing technology and digital governance can help streamline processes, reduce leakages, and improve the delivery of public services. Moreover, fostering a conducive environment for private sector participation and investment is essential for leveraging government expenditure to catalyse economic growth [2].
In conclusion, government expenditure plays a pivotal role in shaping the economic growth trajectory of India. Through strategic allocation of resources in areas such as infrastructure development, education, healthcare, and welfare programs, the government can not only stimulate economic activity and enhance productivity but also promote inclusive and sustainable growth. By addressing the challenges associated with public spending and leveraging opportunities for efficient utilization of funds, India can harness the full potential of government expenditure to propel its economic development
References
1. Chart on government expenditure https://www.clearias.com/budget-2023/
2. Sarva Shiksha Abhiyan https://dsel.education.gov.in/sites/default/files/2019-05/Manual_Planning_and_Apprisal.pdf
3. Mahatma Gandhi National rural employment guarantee act https://simdega.nic.in/en/scheme/mahatma-gandhi-national-rural-employment-guarantee-act-mgnrega/
