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Infrastructure Investment and the Indian Economy

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  • Atrayee Ghosh Roy

Abstract

The purpose of this paper is to investigate the growth effect of physical infrastructure investment in India. Using time-series data for the 1980-2014 period, this paper attempts to empirically test whether India’s inefficient executions of infrastructure investment projects can impede its impressive economic growth potential. A simultaneous equation model is developed to address the problem of a bi-directional relationship between physical infrastructure investment and economic growth. The results find that the contribution of physical infrastructure investment to national economic growth is negative and statistically significant. Furthermore, the results also indicate that physical infrastructure investment in India is not keeping pace with its rapid economic growth.

Suggested Citation

  • Atrayee Ghosh Roy, 2018. "Infrastructure Investment and the Indian Economy," Bulletin of Applied Economics, Risk Market Journals, vol. 5(1), pages 29-38.
    • Handle: RePEc:rmk:rmkbae:v:5:y:2018:i:1:p:29-38
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Infrastructure investment; economic growth; simultaneity; stationary;
    All these keywords.

    JEL classification:

    • H50 - Public Economics - - National Government Expenditures and Related Policies - - - General
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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