Analysing the Relationship Between Public Infrastructures and Economic Growth in Assam

Abstract

This article evaluates the relationship between economic growth and public infrastructures in Assam using the panel dynamic ordinary least square estimation technique and the Dumitrescu–Hurlin panel causality test for the period of 1999–2000 to 2017–18. Empirical findings suggest that there is a long-term relationship between economic growth and public infrastructure indicators, except health infrastructure. One plausible reason for an insignificant relationship between health infrastructure and economic growth may be the insufficient availability of health infrastructure. However, all other public infrastructures have significant influence on achieving high and sustainable economic growth in Assam. In the short run, no public infrastructure has been found to have a significant impact on economic growth except for village electrification. Again, unidirectional causality from economic growth to public infrastructures (except road infrastructure) is acting as a hurdle in the path of the rapid expansion of public infrastructures in Assam. However, evidence of bi-directional causality between economic growth and road infrastructure suggests for extensive government intervention in road infrastructure development to achieve higher sustainable economic growth as well as balanced development across the state of Assam.