GDP-MILEX
Description
India is a country that has survived several upheavals. To achieve stability, peace, and prosperity, the nation's leaders have long sought to strike a balance between funding a powerful military and a growing economy. This article investigates and clarifies the relationship between India's military spending and economic growth from 1960 to 2021. This research examines the short- and long-run equilibrium link between military expenditures and economic development in India using the Gregory Hansen cointegration test, allowing for structural breaks, and the ARDL bounds test approach. The findings show a favorable association between military spending and economic growth in India across the research period in the short run. It also finds a short and long-term bidirectional causal relationship between military expenditure (MILEX) and gross domestic product (GDP), verifying the Wagnerian and Keynesian hypotheses in the defense sector. For the Indian government, this conclusion has significant policy ramifications because it supports the shift of resources to the military by demonstrating that it has not had a detrimental effect on economic growth.