Public Debt and Economic Growth of India: An ARDL Approach
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Author: Pritam Ranjan Sahu and Deepak Kumar Behera
Author Address: Research Scholar, and Associate Professor, Department of Humanities and Social Science, National Institute of Technology, Patna-800 005 (Bihar)
Keywords: Government borrowing, gross domestic product, gross fixed capital formation.
JEL Codes: E62, H27, H63, H81.
Abstract
This paper deals with the short and long-run relationship between public debt and economic growth for 1991-2020 by employing the autoregressive distributed lag (ARDL) model in India. It was found that there was a significant negative impact of internal and total public debt on the GDP of India. However, the external debt of India was not impacted the GDP in the short run. In the long run, there was no such relationship with GDP. The bound test of the long-run coefficient also did not find any significant long-run relationship among the variables. This study recommended that government should avoid unnecessary debt and take steps to maintain economic stability by minimizing the debt.
Description
Indian Journal of Economics and Development
Volume 18 No. 4, 2022, 915-921
DOI: https://doi.org/10.35716/IJED/22140
NAAS Score: 5.15 (2022)
Indexed in Clarivate Analytics (ESCI) of WoS
Indexed in Scopus (SJR: 0.18)
UGC Approved (UGC-Care List Group II)