  The advancement in the field of statistical methodologies to economic data
has paved its path towards the dire need for designing efficient military
management policies. India is ranked as the third largest country in terms of
military spender for the year 2019. Therefore, this study aims at utilizing the
Box-Jenkins ARIMA model for time series forecasting of the military expenditure
of India in forthcoming times. The model was generated on the SIPRI dataset of
Indian military expenditure of 60 years from the year 1960 to 2019. The trend
was analysed for the generation of the model that best fitted the forecasting.
The study highlights the minimum AIC value and involves ADF testing (Augmented
Dickey-Fuller) to transform expenditure data into stationary form for model
generation. It also focused on plotting the residual error distribution for
efficient forecasting. This research proposed an ARIMA (0,1,6) model for
optimal forecasting of military expenditure of India with an accuracy of 95.7%.
The model, thus, acts as a Moving Average (MA) model and predicts the
steady-state exponential growth of 36.94% in military expenditure of India by
2024.
