The study aimed to estimate and understand the multiplier effect of public spending in the social sector and the implications of the growth of the tertiary sector for sustained economic growth in Karnataka. It recognised that while academic studies primarily focused on long-term social outcomes like educational attainment and health status, investment in human capital also had significant growth-enhancing effects.
The research proposed a methodological framework to estimate these multiplier effects, considering how varying levels of investment and recurrent expenditure in social sectors could contribute to economic expansion over different time lags. It also highlighted the evolution of the tertiary sector in Karnataka, which had begun to dominate the state's GDP, necessitating an understanding of its implications for the primary and secondary sectors.
The outcomes included providing a knowledge base for policymakers to grasp the macroeconomic implications of government expenditure in social sectors, which could inform related policy decisions.
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