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Is Urbanisation Sans Infrastructure A Myth? Evidence From India

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  • Rochna Arora
  • Baljit Kaur

Abstract

This study examines the determinants of urbanisation in Indian states with special emphasis on infrastructure and infrastructure investment, using data on 17 Indian states for 1991 to 2017. The fixed effects regression model shows that physical infrastructure is an important determinant in high income states, while social infrastructure is important in high-income and low-income states (where the magnitude is negative). Electricity consumption and teledensity positively affect urbanisation in high- and low-income states, while the infant mortality rate in high-income states and the enrolment ratio in low-income states affect urbanisation negatively. The supply-led inverted-U hypothesis of infrastructure-investment-led urbanisation is only disproven for middle-income states while applying strongly in all other cases, particularly low-income states. Hence, the impact of infrastructure on urbanisation differs across states not only by type of infrastructure but also by the state’s income category.

Suggested Citation

  • Rochna Arora & Baljit Kaur, 2022. "Is Urbanisation Sans Infrastructure A Myth? Evidence From India," Economic Annals, Faculty of Economics and Business, University of Belgrade, vol. 67(232), pages 81-104, January –.
    • Handle: RePEc:beo:journl:v:67:y:2022:i:232:p:81-104
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • O18 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Urban, Rural, Regional, and Transportation Analysis; Housing; Infrastructure
    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth

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