Year: 2022 | Month: June | Volume 8 | Issue 1
Defence Expenditure & Human Development: Nexus revisited, a case study of India
DOI:10.30954/2454-4132.1.2022.3
Abstract:
In the literature, there are a few studies that analyze the relationship between defence expenditure and human development in India. This study proposed to address the relationship by incorporating annual time series data from 1991 to 2019. The autoregressive distributed lag (ARDL) bound testing co-integration approach confirms the valid long-run relationship between defence expenditure and human development in India. The study finds that defence expenditure and human development are interlinked. However, the nature of the linkage is not uniform over time. It is observed that defence expenditure negatively affects human development in the short run. This is possible because, in the short run, due to budgetary constraints, there is a tradeoff between defence expenditure and developmental expenditure. An increase in defence expenditure at the cost of developmental expenditure will put pressure on unemployment and poverty, which will deteriorate the condition of the human development index of the country, but defence expenditure, affects human development positively in the long-run. Thus, policymakers should focus on this option to regulate the peace and harmony of the country by enplaning the vision, while alternating the vision and stretching on the defensive mechanism will put the nation in a black hole in the short-run.
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