Effect of police expenditure on crime rate in India
Authors: Anthony Balu , Appavu Udhayakumar 
Published: October 2024

Purpose
This study aims to examine the relationship between law enforcement expenditures, economic indicators and various crime rates in India using data from the National Crime Records Bureau (NCRB) spanning from 2001 to 2021.

Design/methodology/approach
The study uses data sourced from the NCRB covering violent crimes, property crimes, economic crimes and total crimes under the Indian Penal Code across 27 states and 2 union territories in India. Crime rates per 100,000 people are calculated using projected population figures from the 2001 and 2011 censuses, adjusting for census periods and growth rates. Economic variables such as per capita real gross state domestic product (GSDP) and total police expenditure are obtained from state government sources, adjusted to constant prices. Pooled ordinary least squares analysis is conducted to explore the relationships between crime rates, conviction rate, economic factors and police expenditure over the three-time points: 2001, 2011 and 2021.

Findings
The study reveals a complex relationship between police expenditure and crime rates across different categories in India. Increased police expenditure is positively associated with higher reporting rates for violent and economic crimes, suggesting that enhanced law enforcement resources may improve crime detection and reporting. However, contrary to some expectations, higher police spending does not necessarily lead to a reduction in overall crime rates. Economic prosperity, measured by per capita GSDP, is found to reduce violent crime rates but is associated with an increase in property and economic crimes, likely due to the greater opportunities for such crimes in wealthier regions.

Research limitations/implications
The study’s reliance on state-level aggregate data and NCRB crime statistics, which are based on reported incidents, might not fully capture the true extent of criminal activity, particularly in regions with underreporting issues. In addition, the use of projected population data beyond 2001 and 2011 introduces some uncertainty into the analysis. Future research should explore district-level data to better understand regional variations in crime and incorporate social, cultural and innovative policing strategies to provide a more comprehensive analysis.

Practical implications
Policymakers should recognize the nuanced impacts of police expenditure and economic prosperity on crime rates. While increased law enforcement resources may enhance crime reporting, they do not guarantee a reduction in overall crime rates. Economic growth, while beneficial in reducing violent crimes, may inadvertently increase property and economic crimes due to greater opportunities for criminal activity. These insights suggest the need for targeted interventions that consider both economic factors and law enforcement strategies in crime prevention efforts.

Originality/value
This study contributes to the ongoing debate about the effectiveness of police expenditure in reducing crime by highlighting its limited impact on overall crime rates in India. The findings underscore the importance of understanding the diverse effects of economic prosperity on different crime types, offering valuable insights for policymakers aiming to design evidence-based crime prevention strategies that account for socioeconomic disparities and regional contexts.