The effects of government expenditure on sustainable economic growth in India: assessment of the circular economy

Government expenditure is linked to the economic growth and is the driving force of the every country. In the post liberalization era, India has been exposed to the dynamics of the world economy due to which India has witnessed a significant impact of Government spending on its economic growth. The objective of this paper is to investigate the effects of the Central Government spending on the growth of the Indian economy over a period, from 2006 to 2016. The online data disclosures of the various ministries have been the major source of secondary data. Co-integration analysis is adopted to evaluate the effect of individual sectorial spending on the economic growth and gross domestic product. The economic spending is classified into 5 sectors namely: General Services, Social Services, Economic Services, Grants in Aid & Contribution and Public debt & Loans for analysis, as disclosed by the sources. The analysis gives us an idea of the various sectors which have a positive impact and the sectors which have a negative impact. The results would play an instrumental role in exploring the sectors in which the government should invest more, thereby contributing to an enhancement in the country's growth.