BANGALORE

MANAGEMENT
ACADEMY
QAF ASSIGNMENT
NO. 2
USE OF STATISTICAL TOOL FOR
ANALYSIS OF DATA

SUBMITTED
TO

MR. MOHANASUNDARAM

SUBMITTED
BY

PETHE SARANG SUNIL

BLR0907033052
 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.

FORMULAE & CALCULATIONS

PETHE SARANG SUNIL BLR0907033052 Page 2

 QAF ASSIGNMENT NO. 2

Here consider,

Rural development =X and Roads and bridges=Y

Measure of central tendency and dispersion.

mean =
∑X
N

Solution: = 26973.732 AND = 27962.092

X Y

n n
( )value + ( + 1)value
median = 2 2
2

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

σ= ∑(X − X ) 2

Solution: 12245.6114 and 15474.763

σx = σy =

r=
∑ ( X − X )(Y − Y )
∑ ( X − X ) ∑ (Y − Y )
2 2

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

Budgetary expenditure on rural development and roads & bridges

Scatter diagram representation

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.

X1 − X 2
t=
1 1
S −
n1 n2

PETHE SARANG SUNIL BLR0907033052 Page 4

 QAF ASSIGNMENT NO. 2

(n1 − 1) s12 + (n2 − 1) s2 2

S=
n1 + n2 − 2

Solution: S = 13953.

Here = 12245.6114, = 15474.763, = 10

s1 s2 n1 = n2

= 26973.732 and = 27962.092

X1 X2

Therefore, = 0.1584
tcal

ttab = tn1 +n 2 − 2df

= 2.552
ttab

Now, as > we accept H0.

ttab tcal

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 5

 QAF ASSIGNMENT NO. 2

ANNEXURE

DATA

YEA RURAL ROADS AND

R DEVELOPMENT 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 6