AN ANALYTICAL STUDY ON THE IMPACT OF PUBLIC EXPENDITURE ON GFCF AND GDP: IN SPECIAL REFERENCE OF RAJASTHAN

This research paper seeks to explore the significant role of public developmental expenditure in influencing key economic indicators, specifically Gross Fixed Capital Formation (GFCF) and Gross State Domestic Product (GSDP), within the state of Rajasthan. The study focuses on a ten-year period, providing a thorough examination of how government spending patterns impact the state’s investment environment and overall economic output. By employing trend analysis and regression techniques, the research presents a clear relationship between developmental expenditure and the chosen dependent variables. The trend analysis reveals a steady and continuous rise in developmental spending, paralleled by substantial growth in both GFCF and GSDP over the studied timeframe. Regression analysis further supports this relationship, showcasing a high level of statistical significance and a positive correlation between the independent and dependent variables. The regression findings confirm that an increase in developmental expenditure contributes directly to the expansion of capital assets and the enhancement of economic output in Rajasthan.This study highlights the importance of strategic public expenditure in fostering productive investment and stimulating sustainable economic growth at the state level. The results demonstrate that when financial resources are effectively allocated towards developmental purposes, they create a ripple effect that positively influences capital formation and gross domestic output. The study not only provides empirical evidence of these linkages but also offers practical insights for policymakers on the importance of maintaining and optimizing developmental spending. In conclusion, the research establishes a strong and meaningful connection between public developmental expenditure and economic growth indicators. It emphasizes the need for focused fiscal policies that prioritize developmental activities as a means to achieve long-term economic prosperity for Rajasthan. The findings hold considerable relevance for fiscal planning and can guide future economic strategies aimed at regional development and inclusive growth.