Estimating the Contribution of Infrastructure in Regional Productivity Growth in India

Abstract

There does not seem to be a consensus on the importance of infrastructure investments in the process of economic development. With persistent regional disparities, and increasing regional identities, there is a need to determine the drivers of regional growth. Contribution of infrastructure to regional productivity growth is analyzed in this paper. Empirical analysis using data from 25 states in India for the past two decades suggests that composition of infrastructure investment is important in facilitating economic growth. Empirical results also highlight that investments in economic infrastructure have the closest linkage with regional productivity growth.