ECONOMIC DEVELOPMENT & RESOURCE ALLOCATION IN INDIAùTHE IMPACT OF DEFENSE SPENDING ON ECONOMIC & SOCIAL DEVELOPMENT IN INDIA
The proposed study will examine economic development and the allocation of resources in India. The methodology that will be followed in the conduct of this study is described and explained in this chapter.
The principal focus in the proposed study will be on the macroeconomic effects of spending on national defense on economic growth and social development in India. The time frame of the proposed study will be the inclusive 30-year period 1969-1998.
One of the more controversial issues in public policy analysis concerns the question of the effects of spending on defense spending on a country's economic and social development. Proponents of high levels of defense spending claim that significant economic benefits derive from such expenditures. It is inferred that, as a consequence of economic benefits associated with spending on national defense, social benefits also accrue to the country. Opponents emphasize that any economic benefits derived from high levels of spending on national defense are short-term in character, at best, and that, over the long-term, such expenditures retard economic development. The detractors of high levels of defense spending claim further that retarded economic development, in turn, leads to retarded social development (Mintz & Stevenson, 1995).
Between the two camps are researchers who provide comfort to the proponents of high levels of defense spending, without actually supporting the practice. A study performed under the auspices of the Defense Budget Project, as an example, concluded that "defense spending is not sufficient to explain the performance of the U.S. economy à ," and that defense spending "does not seem to have the compelling power in statistical comparisons made with other nations whose economies have performed better than that of the United States...