The Triangulation Dynamics Between Education, Health And Economic Growth In India

Abstract

The fact that India's spending growth on education and heath outpaced its GDP growth, but the outlay on these sectors is still lags behind that of other BRIC nations as observed in the past seven years, motivated us to perform a research study in order to understand the triangular dynamics between expenditure on education and health, and real economic growth in the country. India may be achieving less-than-desired growth in infrastructure, but the growth in social infrastructure such as education, and health has outstripped GDP growth between 2003-04 and 2010-11 as observed by rating agency CRISIL. Thus, the primary objective of this paper is to relate health and education indicators of human capital, and to identify how they can contribute to enhance economic growth of India. It is in this context we have employed Toda-Yamamoto causality test procedure on relevant data sets over the period spanning from 1985-86 to 2014-15, and found that health spending and real economic growth cause each other. But expenditure on education has only unidirectional relationship with real economic growth. Further, it has been found that expenditure on education causes expansion in health-care spending, but not the other way around. Such a finding is significant for planners, policy makers, researchers and academician as well.