The Role of Infrastructure in the Long-Term Growth of Indian States: A Panel Data Analysis: 23526
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https://doi.org/10.35716/IJED-23526
Author: Maninder Kaur and Neena Malhotra
Author Address: Guru Nanak Dev University, Amritsar-143005 (Punjab)
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 exert 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.
Keywords
Capital formation, economic
development, gross enrolment ratio, income
growth, infrastructure.
JEL Codes
E22, H54, I25,
O11, O47.