Volume and Composition of Public Expenditure on Subsidies : Subsidizing Social and Economic Services in Odisha

In any welfare state subsidies are provided to maintain income support for a minimum subsistence level by providing basic necessity to the low income groups. The aim is to stimulate economic growth by sectoral development for safeguard of domestic supply and provision of accessing basic living conditions. Government intervention is usually motivated people socially and economically that involve the reduction of poverty, enhancing employment, economic growth and providing infrastructures access. This study focuses on disaggregated level of government expenditures on subsidies in social services and economic services. This research paper attempts to examine the volume and composition of government subsidies on the welfare of the society of Odisha over the period 2002-03 to 2016-17. The paper focuses on the volume and functional composition of total government expenditure on subsidy and its proportion of GSDP, subsidy in social and economic services sector in odisha. It measures the significance of growth performance of the state’s public expenditure on subsidy by using Semi log model of Regression analysis. Given such a scenario, the study has conformed to the alternative hypothesis that government subsidy expenditure on different services in Odisha are in the differential growth rate of Odisha state finances over the study period