The public sector has become increasingly important in the modern market economies of today. According to Adolph Wagner (1959), at any given time public expenditures reflect the requirements ofthe prevailing economic situation in a country.Changes in these expenditures signals structural changes in the national economy. Wagner based this on the income elaslicities of demand for services provided by the government, and the encroachment of the public sector on the private sector in the course of economic development. The focus of this study is on both of these considerations. An empirical study on the income eiasticies of demand for public goods in India is conducted for the 1955-1983 post-independence period. The second consideration follows the income elasticity test thus completing an empirical test of Wagner 's Law.
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