Public Expenditure and its Impact on Per Capita Income in Indian States

Abstract

This paper examines the composition of public expenditure and its impact on per capita net state domestic product on some major Indian states. In general, growth means rise of per capita net state domestic product (nsdp) over time. Revenue expenditure is considered to be less productive than capital expenditure. Per capita net state domestic product in some states in India is very high and in some states it is low. The panel regression based on major states in India shows that revenue expenditure has less effect on growth. On the other hand, capital expenditure has significant and positive impact on growth of per capita net state domestic product (nsdp).