Abstract

The paper attempts to examine the trend and pattern of educational expenditure in India and to investigate the linkage between the GDP and education expenditure. Mainly Secondary data from various sources are collected (61 years of data) i.e. from 1951 to 2012 to investigate the trend and pattern of educational expenditure in India. The educational expenditure analyses are based on Econometric methods as well as the  Statistical methods. Line graph is used to show the trend of education expenditure. Education has a great social importance especially in the modern, complex industrialized society and it plays its continuous role in all spheres of life. The educational expenditure as a percentage of GDP is very less in India but in USA it is 5.7 percentages, in France it is 5.6 percentages, in South Africa it is 5.3 percentages. However it is found from the analysis that education expenditure has a direct and positive impact on GDP. But in India, the expenditure on education in relation to GDP continues to be much below the desired level. India’s spending on education is only 4.1 percent of its GDP. When other developed countries are spending more on education, India is lagging behind the social sector expenditure particularly on education. Therefore, the Central government and the State government have to spend more on education to increase our GDP. The funding arrangements in all level of education need to be reformed. The expenditure on education should increase over the years and there should be an increasing in the expenditure on education by the states with a view to increase the share of the state governments in achieving the target of expenditure on education as 6 percent of its GDP (According to Kothari Commission). So, by spending on education Indian economy can expect to grow.

Key Words: Education, Expenditure, GDP, Linkage, Pattern, Trend,