Public Expenditure towards Economic Growth: A Multivariate Analysis on Sikkim State Budget

Abstract

The study's major focus is on Sikkim's state budget, and it employs PCA to identify the government's largest investments in several areas, which are then used as variables in the study. Government expenditure is one of the most crucial aspects to consider that helps in increasing the rate of economic growth. Hence, it is very essential to look into the relation between spending by the Government and economic growth of Sikkim for the year 2010-2011 to 2019-2020. The study have made use of various statistical tools for testing and interpreting variables-Administrative services(AS),Education, Sports, Art and Culture(EDSAC),Health and Family Welfare(HFW), Agriculture and Allied activities(AA),Industrial and Minerals(IM), Transportation(TR),Tourism(TOU) and Irrigation and Flood control(IFC).The Regression analysis shows that all the variables-AS, EDSAC, HFW, IFC, AA, IM, TR and TOU are having insignificant relationship with GSDP. This proves that all the expenditure made by government in these sectors is not able to contribute in the economic growth of Sikkim.