Does Defense Expenditure Drive Economic Growth? “An Empirical Study of Bharat”

There have been limited studies which investigate the dynamic relationship between defence expenditure and economic growth. The purpose of the present paper is to attempt to investigate the linkage between defence expenditure and economic growth in Bharat.

The study is based on annual data spans over the period 1981 to 2019. Standard econometric tools like the Unit root test, Auto-Regressive distributed lag model have been used to analyze the data and to draw inferences.

The study finds that defence expenditure and economic growth are interlinked in Bharat. It is pragmatics that defence expenditure affects economic growth positively in the short-run as well in the long run. Moreover, Granger causality outcomes revealed that there is a one-way inter-linked between defence spending and economic activities.