Efficacy of Educational Spending in India:an Ardl Approach

Education is the fundamental cornerstone in the economic and social development of any nation. It is argued as one of the basic factors which vindicates the gap between developed and underdeveloped nations. India, being a developing country, exhibits fragile spending hovering around 3 to 4 percent of total expenditure. Besides, centre as well as states jointly spent on an average 3 percent of Gross Domestic Product (GDP) during 2014-15 to 2018-19 (Economic Survey 2019-20). However, National Education Policy (NEP) 2020 recommends 6 percent of Gross Domestic Product (GDP) to be spent on education. The linkage between public spending and educational outcomes has been explored very well in the literature. However, such efforts are found mainly focussed towards developed countries. Pertinently, among the developing countries very sparse studies have been conducted in India. This paper plugs the gap by investigating the nexus between public spending and educational outcomes in the Indian context. The study concluded with the findings that spending does not prove fruitful in improving the gross enrollment rate at various levels both in the short run as well as long run.