An Exploration of the Relationship Between Public Infrastructure and Economic Growth in Northeast India: A Panel Data Approach

Abstract

In this article, we have used a panel data approach to explore the relationship between public infrastructure and economic growth in Northeast India using data from all eight states from 2004–05 to 2018–19. The findings reveal that all public infrastructures do not contribute productively to economic growth. Certain infrastructure sectors, such as agriculture-related and healthcare-related infrastructure, affect the growth prospects of the northeastern region of India. One plausible reason could be the current level of some public infrastructure, which is not developed sufficiently enough. Therefore, India must address the infrastructural gap in its northeastern region in order to leverage the region’s trade potential and establish it as the country’s growth engine. To meet the infrastructure demand with limited fiscal space, the government needs to foster an environment that encourages public–private partnerships in infrastructure. Sharing benefits with private participation could be another way to attract private investment in the infrastructure sector of the region. JEL Codes: C23, H54, O47, R53