Does Demography Matters in Growth of Government Expenditure? A Case Study of Jammu and Kashmir (India) With Co-Integration Approach
Does Demography Matters in Growth of Government Expenditure? A Case Study of Jammu and Kashmir (India) With Co-Integration Approach

Summary/Abstract: The paper investigates the behavior of demographic dimension on the growth of aggregate Government expenditure in the state of Jammu and Kashmir (India) in long and short run. Demographic dimensions, anywhere, are related to different aspects of population which pushes the government expenditure to higher level. The state of Jammu and Kashmir is not the exception, the increasing trend in different aspects of population, rising needs and aspirations of the growing population forces the government to increase expenditure on that count, which result in increase in aggregate government expenditure. Using multivariate co-integration technique followed by VAR model on annual time series data for the period 1984-2013, the study found that demographic dimensions do not have long run association with government expenditure. The demographic variables affect government expenditure only in short run. Our study found that population above 65 and rate of urbanization are significant demographic factors which produce positive change in government expenditure while increase in total population is insignificant to produce change in government expenditure.

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