Interrelationship Between Human Development, Financial Development and Economic Growth: Empirical Evidences from Indian Economy

Abstract

The interrelationship between human development, financial development and economic growth exhibited a very interesting yet peculiar fact that human development is the prime determinant of the development process bestowing significantly to economic growth as well as the development of the financial sector in the Indian economy. To explore short-run as well as long-run interactions between financial development, human development and economic growth of the Indian economy, the autoregressive distributed lag (ARDL) bound test has been employed. It is vital to state that financial development is detected as negatively impacting the growth of the Indian economy; alternatively, growth could have been additionally enhanced through auxiliary human development instead of emphasising financial development at large. Therefore, the need of the hour is to formulate concrete plans and policies to spearhead the development of human resources through the promotion of education and health facilities as an integral part of our policy frame which may axiomatically reinforce the potency of the financial system as well as economic growth in India.