Impact of financial factors on economic growth : Evidence from India

Abstract

To investigate the effects of financial issues, specifically M3 and loans to the private sector, on India’s economic expansion from 1996 Q2 to 2020 Q4. The paper employs augmented dickey fuller test to verify stationarity, cointegration analysis and vector error correction model. Key result outcomes indicate that, whereas credit to the private sector and M3 have significant short term and prolonged negative affects on GDP, credit to the private sector has essential favorable short-term effects on GDP. Using financial institution parameters, this research investigates the implication of financial measures on the expansion of the economy of India. The majority of prior investigations had its origins in developed nations.