Linkage between social sector’s spending and HDI: study on individual as well as panel data of Indian states

ABSTRACT

Spending upon different social sectors from the government’s exchequer has been one of the priority agendas of any country or province since it affects growth and human development. In this juncture, this study investigates the linkages between social sector’s spending and HDI in individual as well as panel of states in India for the period 1995–2016. Using cointegration, causality and error correction mechanism for the individual and panel of states, the study observes that there are long-run relations between the two for a small number of states but no one produces error correction results. Most of the states in the North Eastern Region produce bilateral causality between two. Further, the panel data results through VECM show that both the indicators have long-run associations but errors are not again corrected. However, all the past values of the two indicators make a cause to each other in the panel framework.

KEYWORDS:

• HDI
• social sector
• cointegration
• Granger causality
• VECM

JEL Classifications:

• H5
• H72
• O15
• C22

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Notes on contributors

Ramesh Chandra Das

Ramesh Chandra Das is currently Associate Professor of Economics at Vidyasagar University, West Bengal, India with 20 years of teaching experience in undergraduate and post graduate levels. He has obtained Masters, MPhil and PhD Degree in Economics from the University of Calcutta. Dr Das has contributed several research papers to national and international journals with reputations and published several books with international publishers.

Chhanda Mandal

Chhanda Mandal is Assistant Professor of Economics, Muralidhar Girls' College, Kolkata, India. She obtained her MA degree from Delhi School of Economics and worked as a research associate in Delhi School of Economics, for RBI project ‘Exchange Rate Policy and Modeling in India’.

Arun Kumar Patra

Arun Kumar Patra is currently an Associate Professor of Commerce at Katwa College, WB, India with 28 years of teaching. He has obtained his Graduate, Masters and MPhil degree from the University of Burdwan and PhD from Magadh University, India.