Education and Economic Growth in India

The paper focuses on the expenditure on education as determinant on economic growth. The study examine the relationship between education and economic growth in total number of states as a whole , Non special category states, special category states and North eastern states separately. We have considered Net State Domestic Product at Factor cost on constant prices (NSDP) and Per-capita Net State Domestic Product at Factor cost ( PerNSDP)on constant price as proxy for economic growth. Using the panel least square with fixed and random effect NSDP and Per NSDP has regressed separately on Expenditure on education and Expenditure on education as a percentage of aggregate expenditure. The result of the study shows that expenditure on education is positively influencing the growth of the economy. But Expenditure on education as a percentage of aggregate expenditure is negatively influencing the economic growth in case of total states as a whole and Non special category states. However it is not showing significance for northeastern states