BANGALORE MANAGEMENT

ACADEMY

QAF ASSIGNMENT NO. 2

USE OF STATISTICAL TOOL FOR ANALYSIS OF DATA

SUBMITTEDTO

MR. MOHANASUNDARAM

SUBMITTED BY

PETHE SARANG SUNILBLR0907033052

QAF ASSIGNMENT NO. 2

USE OF STATISTICAL TOOLS FOR ANALYSIS OF DATA

In the present study I am using combined budgetary transactions of centre and states in rural

development and roads & bridges as data; the data is taken from year 1998 to 2007. I am

using mean and median for measure of central tendencies. We are using standard deviation

and correlation coefficient for measure of dispersion. We are using scatter diagram and bar

diagram for diagrammatic representation.

The mean value of expenditure in rural development is Rs. 26973.732 crores while the mean

value of expenditure in roads and bridges is Rs. 27962.092 crores. This shows that the

average expenditure in roads and bridges is greater than that of rural development. The

median value for expenditure in rural development is Rs. 24725.42 crores while the median

value of expenditure in roads and development is Rs. 22296.265 crores.

Then we have found the correlation coefficient, the correlation coefficient is found out to be

0.9759. The scatter diagram is also drawn, from the correlation coefficient and scatter

diagram we find that expenditure in rural development and roads & bridges is perfectly

positively correlated. This shows that the expenditure in rural development and roads &

bridges is highly correlated.

I have then used bar diagram to show the expenditure in rural development and roads &

bridges from 1998 to 2007. From this bar diagram we can see that the expenditure in rural

development is more than roads & bridges for first seven years. For the next three years the

expenditure on roads & bridges is more. This shows that from year 1998 to 2004, the

government has spent more on rural development and development of rural areas was the

main objective. In later years more spending was done of building roads and bridges.

In the inferential statistics part, we are using testing of hypothesis to find out whether the

budgetary transaction on rural development is superior to roads and bridges. I have used here

difference in mean and t test as the sample size is less than 30. The calculation is shown in

annexure. I have found that budgetary expenditure on rural development is not superior to

roads and development.

PETHE SARANG SUNIL BLR0907033052 Page 2

QAF ASSIGNMENT NO. 2

FORMULAE & CALCULATIONS

Here consider,

Rural development =X and Roads and bridges=Y

Measure of central tendency and dispersion.

Solution: = 26973.732 AND = 27962.092

Solution: Median value of X = 24725.42 and Median value of Y = 22296.265

Solution: 12245.6114 and 15474.763

Solution: r = 0.9759 this shows that expenditure on rural development and roads &

bridges are perfectly positively correlated.

PETHE SARANG SUNIL BLR0907033052 Page 3

QAF ASSIGNMENT NO. 2

Diagrammatic representation

1 2 3 4 5 6 7 8 9 100

10000

20000

30000

40000

50000

60000

RURAL DEVELOPMENTROADS AND BRIDGES

Budgetary expenditure on rural development and roads & bridges

10000 20000 30000 40000 50000 600000

10000

20000

30000

40000

50000

60000

ROADS AND BRIDGES

ROADS AND BRIDGES

Scatter diagram representation

PETHE SARANG SUNIL BLR0907033052 Page 4

QAF ASSIGNMENT NO. 2

Testing of hypothesis

Here I am going to test following hypothesis “is budgetary expenditure on rural development

superior than roads and bridges”

So here the null hypothesis is as follows,

H0: budgetary expenditure on rural development is not superior to roads and bridges

Alternate hypothesis will be,

H1: budgetary expenditure on rural development is superior to road and bridges.

Here as the sample size is less than 30 i.e. n < 30 so I am using ‘t’ test for difference in

mean.

Solution: S = 13953.

Here = 12245.6114, = 15474.763, = 10

= 26973.732 and = 27962.092

Therefore, = 0.1584

= 2.552

Now, as > we accept H0.

PETHE SARANG SUNIL BLR0907033052 Page 5

QAF ASSIGNMENT NO. 2

Thus our hypothesis we accept null hypothesis. This shows that budgetary expenditure on

rural development is not superior to expenditure on roads and bridges.

PETHE SARANG SUNIL BLR0907033052 Page 6

QAF ASSIGNMENT NO. 2

ANNEXURE

DATA

YEAR

RURAL

DEVELOPMENT

ROADS AND

BRIDGES

1998 15474.91 10990.87

1999 16129.81 15086.74

2000 14728.89 19373.51

2001 17981.46 19351.68

2002 23111.59 22054.79

2003 26339.25 22537.74

2004 26522.84 23932.84

2005 36767.78 38539.16

2006 44416.38 50881.64

2007 48264.41 56871.95

Source: finmin.nic.in

PETHE SARANG SUNIL BLR0907033052 Page 7