Evaluating the Efficiency of Public Expenditure across Indian States

Abstract

This study evaluates the efficiency of public expenditure across Indian states, focusing on how capital, revenue, and social sector expenditure impact economic performance, measured by Gross State Domestic Product (GSDP) and Per Capita GSDP. Using secondary data from EPWRF, RBI, and other sources covering 2001-2023, and applying Data Envelopment Analysis (DEA), the study identifies significant variations in efficiency. States like Maharashtra, Haryana, and Tamil Nadu demonstrate high efficiency, reflecting strong investments in infrastructure and social sectors. In contrast, states like Bihar, Madhya Pradesh, and Uttar Pradesh show lower efficiency due to governance challenges and inefficient resource allocation. The study recommends improving governance, resource allocation, and inter-state collaboration to enhance public expenditure efficiency and achieve sustainable economic growth across states.