# Language: English Purpose of Study: Regional disparities and inequality continue to be a feature of Indian economy even after seven decades of independence. Many of its social indicators need much improvement. Some states are particularly more backward with large proportions of their population being officially poor while some others are comparatively in better position. Such inter-regional disparities have compounded policy challenges of the governments in the poorer states. Against this background, the present study aims to study the dimension of inter-regional disparity for select less advanced states in India. Methodology: A double log model was used in this study to analyze government expenditure's impact on development projects or schemes. Health-wise, less advanced states, viz. Bihar and Odisha are chosen for this purpose. The study uses the actual data on government expenditure in the social sector, mainly on health. The data on a per capita basis is used for each state to analyze the impact of the per capita government's expenditure on select social indicators. The analysis is done separately for both states. # INTRODUCTION In a developing country like India where significant part of population are poorer and living under miserable conditions and have to struggle daily for their livelihood, so it is not possible for them to access health care, education and other social services at their own. So, it becomes the duty of the government to provide effective social services at a very reasonable cost. According to (Gupta, 2002), "Health care services have high level of externalities rather than curative services, a minimum package of these services provided by the government would reduce mortality rates". Since, governments in developing countries always have scarcity of funds, so it is necessary to ensure that the funds are used effectively and the desired results are attained at social front. So, it is also important to check the effectiveness of government expenditure on the improvement of social indicators. Further, government's spending is also important to uplift the living standards of the poorer people in the society. As Gera, in her studies also found that government investments in education, health and in the provision of infrastructure can have direct effect on moving household out of poverty (Gera, 2007). Further, Ranjan and Sharma (2008) examined the effect of government development expenditure on economic growth and they discovered a significant positive of government expenditure on economic growth. A study found, educational attainment at basic levels (secondary level) and low infant mortality rates have been shown to have a positive effect on economic growth also (Barro and Lee, 1993). Studies on both developed and developing countries have indicated that sufficient amount of government spending on education and health improves human development and lessens poverty burden as well (Barro and Lee, 1997;Swaroop, 1996). However, it is also necessary to mention that the solely the increase in public spending is not sufficient but the quality of expenditure with good public policies also required. As stated, a government could increase the public spending by a large amount but this does not ensure that it would have desired result on economic and social development as the quality of this spending also matters (Bussato and Brunori, 2011). Despite the importance of government spending and its role on improvement of social sector, there are not sufficient number of studies have been done in India to evaluate the impact of government spending on social indicators. Thus, present study is an attempt to evaluate the impact of government spending on some selected social indicators and further it will also make a significant contribution to the present literature. As the number of social indicators are very large, so it is not feasible to assess every indicator given the time and data constraint. Hence, the study has selected four indicators i.e., Infant Mortality Rate (IMR), death rate, birth rate and total fertility rate as indicators of health. The study has chosen Bihar and Odisha states. The following social indicators have been selected for the present study. Anderson al.et (2000), revealed that the USA spent more on health care as compare to other countries. USA spent 14% of GDP on health care in 1998 while OECD median was8% of GDP and results also suggested that Americans enjoys better health care system than other OECD countries. Shenggen Fan et al. (2002) 2012) revealed that government expenditure on health has a significant positive effect on health status while, expenditure on education has no significant impact on either primary or secondary school enrolment. Maitra, B., and C.K. Mukhopadhyay (2012) shown that impact of education and health spending on growth is not an instantaneous but with gestation lags. Initially, expenditure on education and health improves human capital which manifests itself in the form of economic growth. Further, it is found that the gestation lag of education spending was longer than that of health-care spending. Sava? Çevik, M. & Okan Ta?ar (2013) found that government health spending has significant impact on under-5 child mortality rate and on infant mortality rate. Study also concludes that composition of government health expenditure also matters not only the size of expenditure. Tae Kuen Kim and Shannon R. Lane (2013) shown a negative relationship between public the health expenditure and the infant mortality rate (IMR), while positive association between public health expenditure and life expectancy is found. Thus, the study concludes that expanding public health expenditure improves overall health condition. Bhakta, R. (2014) shown that public expenditure on Supplementary Nutritional Program has positive impact on health status of children which also has indirect positive impact on education. Study also concludes that public expenditure on elementary education has direct impact on the enrolment rate. Virupakshapp a D Mulagund (2015) suggested that public health expenditure in India have increasing trend during this period. Further, study concludes that public health expenditure has positive impact on health indicators i.e, it resulted in fall in maternal mortality rate (MMR), infant mortality rate (IMR), fall in total fertility rate (TFR) and improves life expectancy. Wong Sing Yun and Remali Yusoff (2015) indicated there is a unidirectional causal relationship from GDP to education expenditure and from GDP to health care expenditure. Thus, study concludes that GDP affect both the education and health care expenditure. However, reverse causal relationship is not found between them. K. P. K. S. # Infant Mortality Rate (IMR): II. LIT E R AT U R E R E V IE W Gerard F. # III. OBJECTIVE(S) OF STUDY 1. To evaluate the impact of government expenditure on selected social indicators in less advanced Indian states. 2. To suggest policy implications for better utilization of public expenditure on social sectors. # III. METHODOLOGY For the purpose of determining the impact of government's expenditure on social indicators, the study has applied log-log or double-log model. In case of Log-log models, the coefficients are used to determine the relative impact of independent variable(s) on relative impact of dependent variable. Here, the independent variable is government expenditure and the social indicator(s) chosen are the dependent variables. The coefficients in a log-log model represent the elasticity of dependent variable with respect to independent variable. Therefore, log-log model presents the empirical interpretation in elasticity term i.e., percentage change in dependent variable due to one percent change in explanatory variable. Log-log model is represented as: In Yi= In ?1 + ?2 In X i + ui (1) Where In= Natural log (i.e., log to the base e, and where e = 2.718) Equation ( 1) is thus: In Yi = ? + ?2 In Xi + ui The coefficients are estimated by OLS regression. Six equations will be fitted/estimated for each selected state. The if the value of explanatory variable is increased by 1 percent, then the value of dependent variable decreases by 0.10 per cent. From the analysis table we can see the R-squared value is 0.9556 which tells 95.56 percent of variation in dependent variable birth rate is explained by independent variable. The p-value is 0.0000 being less than the significant level of 5% percent which shows that the explanatory variable is statistically significant and, therefore, the null hypothesis that the coefficient of explanatory variable is zero will be rejected. It means we can say that the per capita public health expenditure on health has impact on birth rate. Table 3 provides the results regarding the impact of government's expenditure on health on infant mortality rate (IMR). Here, infant mortality rate is a dependent variable. The squared-R is 0.97 which tells that around 97 percent of the variation in dependent variable is explained by the independent variable. As we can see that the p-value is 0.0000 being less than the significant level of 5% percent which shows that the explanatory variable is statistically significant and, therefore, the null hypothesis that the coefficient of explanatory variable is zero will be rejected. Apart from this, the negative symbol with explanatory variable shows that there is negative relationship between the dependent variable and explanatory one. The explanatory coefficient value is -0.336 which indicates that 1 percent increase in per capita may lead to 0.336 percent fall in IMR. 4.8d provides the results of analysis between per capita health expenditure and total fertility rate (TFR). Here, the total fertility rate is dependent variable while the per capita expenditure on health is independent variable. From the table we can see that the coefficient has a negative sign with value of -0.14 which tells there is an inverse relationship between health expenditure and the TFR i.e., an increase in per capita health expenditure results in 0.14 percent fall in TFR. The R-squared value is 0.911 which tells 91.1 percent of variation in dependent variable TFR is explained by independent variable per capita expenditure on health. The p-value is 0.0000 which is appearing against the explanatory variable is statistically significant because the p-value being less than the significance level of 5 percent (0.05), hence the null hypothesis of that, the explanatory variable is statistically insignificant and being rejected. Table 6 gives the results relating to the impact of government's expenditure on health on death rate in Bihar. Here the death rate is dependent variable. From the table we can see that the per capita health expenditure coefficient has a negative sign which tells there is an inverse relationship between health expenditure and the death rate i.e., an increase in government expenditure on health causes fall in death rate. The coefficient has -0.081 value which means 1 percent increase in per capita health expenditure causes 0.081 percent fall in death rate. The R-squared value is 0.6031 which tells 60.31 percent of variation in dependent variable death rate is explained by independent variable. Further, we can see that the p-value is 0.0007 which is appearing against the explanatory variable is statistically significant because the p-value is being less than the significance level of 5 percent (0.05), hence the null hypothesis of that the explanatory variable is statistically insignificant and being rejected here also. The results of this study are consistent across all variables considered for the study. Our principal conclusion can be summarized as per capita government expenditure on health helps to reduce infant mortality rate, birth rate, death rate and total fertility rate in Bihar and Odisha states. These results indicate that the government should increase its budgetary allocations on health and family welfare as well. These results are also important in considering the fact that there should be the commitment of more funds health. Although only commitment of funds to social sector is not sufficient, better utilization of funds right direction in effective manner is most important. Thus, it is also essential for the government to look after the efficiency and transparency of its budgetary allocations to ensure that these funds are fully utilized (Yun and Yusoff, 2015). Thus, analysis of this study can pave way in determining the optimal mix of It indicates that increase in government spending results in fall in IMR, Birth Rate, Death Rate and TFR. Therefore, the government should further increase its expenditure in health and family welfare. However, merely increasing the allocation of funds to the social sector is not sufficient, effective utilization of funds also necessary. Thus, it is also essential for the government to look after the efficiency and transparency of its budgetary allocations to ensure that these funds are fully utilized. Therefore, policy-makers should address other important factors also apart from allocating public expenditure like the effectiveness of the government schemes in health and family welfare, and proper implementation of such schemes. # VI. DATA ANALYSIS AND RESULTS INTERPRETATION # VIII. CONCLUSION From various studies, it can be intuitively explained by the fact that because of extreme poverty and deprivation in India the welfare of the society can be increased by greater involvement of government. At the policy level, the present study recommends that public expenditure should increase further to have a balanced and improved human development of the concerned states. So, an increase in social sector expenditure should also be considered as one of the priorities to promote efficiency in growth and development. Hence, sufficient amount of government funds is recommended to provide support to policies and programs necessary to achieve welfare, growth and development of these states in particular, and the country in general. Therefore, the study is an attempt to analyze the relationship between the public spending on health sector and the selected health indicators in Bihar and Odisha. The study has used the state -level data for the selected states to estimate the direct and indirect effects of government's expenditure on social indicators. The findings clearly indicate that government expenditure does have impact on selected social indicators. The results of the study shows that per capita expenditure on health is inversely related with all the four selected health indicators i.e., increase in per capita expenditure leads to fall in Birth Rate, Death Rate, Infant Mortality Rate (IMR) and Total Fertility Rate (TFR) in both states, however, the amount of decrease will depend on their respective coefficient values. Total Fertility Rate (TFR): It is defined asaverage number of children that would be bornto a woman if she experiences the currentfertility pattern throughout her reproductivespan (15-49 years). In 2021, TFR was 2.3 in Indiai.e., 2.3 births per woman.Death Rate: The average annual number ofdeaths during a year per 1,000 Population atmidyear; also known as crude death rate. Deathrate in 2021 was 7.3 deaths/ 1000 Population inIndia.Birth Rate: The average annual number of birthsduring a year per 1,000 persons in thepopulation. In 2021, birth rate was 19 births/1000 population at midyear; also known as crudebirth rate. covered this drawback by considering NERwhich is the net of Gross Enrolment Ratio (GER)and dropout rates.Study further concludes that there is aunidirectional causality from economic growth togovernmentexpenditureand governmentexpenditure to economic growth. Sineviciene, L.(2015), Results show that there is an inverserelationship between economic development andgovernment's expenditureon public order andsafety, and economic affairs. While, positiverelationship is found between economicdevelopment and government's expenditure onsocial protection and health. Study furtherconcludes that government should pay moreattention to the needs which ensure sustainabledevelopment in the long-run. Mittal, P. (2016),shown that there is a direct relationship betweenthe social sector spending and humandevelopment index (HDI) of the Indian states. So,study recommends that the public expenditureshould increase further to achieve balanced andimproved human development in India. Solihin,A., et al. (2017), shown that government spendingin education sector is relatively inefficient.Further, it states that government's expenditurefor education has no significant impact oneducation index. This implies governmentexpenditure for education sector is not effective inimproving education index. Jiranyakul, K. (2007)results of Granger causality test reveal theunidirectionalcausalityfromgovernmentexpenditure to economic growth. Similarly, theresults of least square method with laggedvariables also show that there is a positive impactof government expenditure on economic growth.In doing the above, the present study seeks to fillup some research gaps found in the literature.The study has used government's expenditure onper capita basis while most of the studies havetaken the overall government's expenditure intheir analysis (Yun and Yusoff, (2015), Mello andPisu, (2009), Kim and Lane, (2013) and others).Further, mostly studies have considered grossenrolment rates as output Lopes, (2002),Baldacci, Guin-Siu and De Mello (2003),Craigwell, Lowe and Bynoe, (2012); however,enrolments do not reflect actual output as it doesnot exclude the drop outs. Present study has© 2023 Great ] Britain Journals Press| Volume 23 Issue|Compilation 1.015 29 1VariableCoefficientStd. Errort-StatisticProb.Constant2.4861590.03436372.350680.0000ln_ Per Capita Health-0.1001820.005986-16.736660.0000ExpenditureR-squared0.955649Adjusted R-squared0.952237S.E. of regression0.014214Sum squared residual0.002627Log likelihood43.59160F-statistic280.1159Prob(F-statistic)0.000000 1 provides the results of analysis showing impact of per capita health expenditure on birth rate for state of Odisha for the period 2001 to 2022. Here, the birth rate is dependent variable while the per capita expenditure on health is independent variable. From the table we can see that the explanatory variable's coefficient has a negative sign which tells there is an inverse relationship between health expenditure and the birth rate i.e., an increase in government expenditure on health causes fall in birth rate. Further, coefficient has -0.10 values which mean London Journal of Research in Management and Business 2VariableCoefficientStd. Errort-StatisticProb.Constant1.5261880.04845231.498690.0000ln_ Per Capita Health-0.1173430.008440-13.902930.0000ExpenditureR-squared0.936982Adjusted R-squared0.932135S.E. of regression0.020043Sum squared residual0.005222Log likelihood38.43740F-statistic193.2915Prob(F-statistic)0.000000Table 2 provides the results of analysis betweenpercent fall in death rate. The R-squared value isper capita health expenditure and the death rate.0.936 which tells 93.6 percent of variation inHere, the death rate is dependent variable whiledependent variable is explained by independentthe per capita expenditure on health isvariable. As we can see that the p-value is 0.0000independent variable. From the table we can seewhich is appearing against the explanatorythat the coefficient has a negative sign which tellsvariable is statistically significant because thethere is an inverse relationship between healthp-value being less than the significance level of 5expenditure and the death rate. The explanatorypercent (0.05), hence the null hypothesis of that,coefficient value is -0.11 which means an increasetheexplanatoryvariableisstatisticallyin per capita health expenditure causes 0.11insignificant and being rejected. 3VariableCoefficientStd. Errort-StatisticProb.Constant2.2672390.07792929.093650.0000ln_ Per Capita Health-0.3362190.013575-24.767890.0000ExpenditureR-squared0.979248Adjusted R-squared0.977652S.E. of regression0.032236Sum squared residual0.013509Log likelihood31.30917F-statistic613.4486Prob(F-statistic)0.000000© 2023 Great ] Britain Journals Press| Volume 23 Issue|Compilation 1.015 31 4VariableCoefficientStd. Errort-StatisticProb.Constant0.0208120.0727610.2860290.7794ln_ Per Capita Health-0.1470030.012675-11.598280.0000ExpenditureR-squared0.911876Adjusted R-squared0.905098S.E. of regression0.030098Sum squared residual0.011777Log likelihood32.33842F-statistic134.5201Prob(F-statistic)0.000000Table 5VariableCoefficientStd. Errort-StatisticProb.Constant3.0663620.06034150.817550.0000ln_ Per Capita Health-0.0472100.009447-4.9975670.0002ExpenditureR-squared0.657676Adjusted R-squared0.631343S.E. of regression0.031945Sum squared residual0.013266Log likelihood31.44520F-statistic24.97568Prob(F-statistic)0.000244 6VariableCoefficientStd. Errort-StatisticProb.Constant1.4664970.11664312.572470.0000ln_ Per Capita Health-0.0811640.018261-4.4446280.0007ExpenditureR-squared0.603111Adjusted R-squared0.572581S.E. of regression0.061753Sum squared residual0.049574Log likelihood21.55844F-statistic19.75472Prob(F-statistic)0.000661 7VariableCoefficientStd. Errort-StatisticProb.Constant3.1178150.21791014.307790.0000ln_ Per Capita Health-0.1322020.034115-3.8752170.0019ExpenditureR-squared0.536001Adjusted R-squared0.500309S.E. of regression0.115365Sum squared residual0.173018© 2023 Great ] Britain Journals Press| Volume 23 Issue|Compilation 1.015 33 8VariableCoefficientStd. Errort-StatisticProb.Constant0.7693320.1423795.4034110.0001ln_ Per Capita Health-0.0912690.022290-4.0945990.0013ExpenditureR-squared0.563256Adjusted R-squared0.529661S.E. of regression0.075377Sum squared residual0.073863Log likelihood18.56790F-statistic16.76574Prob(F-statistic)0.001266Table 8 provides the results of analysis betweenper capita health expenditure and total fertilityrate (TFR) in Bihar. Here, the total fertility rate isdependent variable while the per capitaexpenditure on health is independent variable.From the table we can see that the coefficient hasa negative sign with value of -0.091 which tellsthere is an inverse relationship between healthexpenditure and the TFR i.e., an increase in percapita health expenditure results in 0.091 percentfall in TFR. The R-squared value is 0.5632 whichtells 56.32 percent of variation in dependentvariable TFR is explained by independent variableexpenditure on health. The p-value is 0.0013which is appearing against the explanatoryvariable is statistically significant because thep-value being less than the significance level of 5percent (0.05), hence the null hypothesis of thattheexplanatoryvariableisstatisticallyinsignificant and being rejected. VII.FINDINGS AND SUGGESTIONS? One percent increase in per capita governmenthealth expenditure decreases IMR by 0.13percent, Death Rate by 0.08 percent, BirthRate by 0.047 percent and TFR by 0.09percent in Bihar state.? And, in Odisha, one percent increase in percapitagovernmenthealthexpendituredecreases IMR by 0.33 percent, Death Rate by0.11 percent, Birth Rate by 0.10 percent andTFR by 0.14 percent.? At 5 percent level of significance, p-valuesindicate that government expenditure hassignificant impact on the selected socialindicators.government's expenditure and good governance.34| Volume 23 Issue7|Compilation 1.0© 2023 Great ] Britain Journals Press Impact of Government Expenditure on Selected Health Indicators: A Study on Bihar and Odisha © 2023 Great ] Britain Journals Press Impact of Government Expenditure on Selected Health Indicators: A Study on Bihar and Odisha ## Expenditure and Economic Growth A Case Impact of Government Expenditure on Selected Health Indicators: A Study on Bihar and Odisha * Health Spending and Outcomes: Trends In OECD Countries GFAnderson JHurst PSHussey MJee-Hughes 10.1377/hlthaff.19.3.150 Health Affairs 19 3 2000. 1960-1998 * More on the effectiveness of public spending on health care and education: a covariance structure model EBaldacci MTGuin-Siu LMello De 10.1377/hlthaff.19.3.150 Journal of International Development 15 6 2003 * The Effect of Public Health Expenditure on Infant Mortality: Evidence from a Panel of Indian States ABarenberg Basu CSoylu 10.1002/jid.1025 2015 * Can Labor Regulation Hinder Economic Performance? 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