The Role of Infrastructure in the Long-Term Growth of Indian States: A Panel Data Analysis
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Author: Maninder Kaur and Neena Malhotra
Author Address: Assistant Professor, School of Social Sciences and Former Professor-cum-Head, Punjab School of Economics, Guru Nanak Dev University, Amritsar-143005 (Punjab)
Keywords: Capital formation, economic development, gross enrolment ratio, income growth, infrastructure.
JEL Codes: E22, H54, I25, O11, O47.
Abstract
Infrastructure is a prerequisite for the development of any economy. In recent years, the role of infrastructure in accelerating economic growth has been widely debated. This study investigated the long-term determinants of economic growth across 16 major Indian states from 1990-91 to 2018-19. The analysis employed ten independent variables, comprising physical, social, and financial indicators along with their respective composite indices, to study their impact on the income levels of selected states of India. Accordingly, fixed- and random-effects panel data regression models were employed to identify the infrastructure determinants of long-term income across Indian states. The panel regression results indicated that physical, social, and financial infrastructure indices exerted a positive and significant impact on income growth across selected Indian states. With respect to individual indicators, gross capital formation, telephones, infant mortality rate, and gross enrolment ratio in schooling were found to be major determinants of state development, as measured by per capita net state domestic product.
Description
Indian J Econ Dev, 2026, 22(2), 261-270
https://doi.org/10.35716/IJED-23526