Welfare Expenditure and Economic Growth in India (An Inter-State Analysis of Welfare Economy)

Abstract

Welfare expenditure plays a critical role in shaping economic development in a federal economy like India. It includes government spending on health, education, social security, rural development, and poverty alleviation programs. In India, both the Union and State Governments contribute significantly, but states account for a major share of implementation and spending.

In FY 2024–25, welfare expenditure has become a key policy tool for inclusive growth, especially after the pandemic-induced socio-economic disruptions. However, the relationship between welfare spending and economic growth varies significantly across states due to differences in governance, fiscal capacity, and development priorities.