Assessing the Impact of Public Infrastructure Investment on Economic Performance: the Case of India

Gaurav Aakar
Vaibhav Agarwal
Varun Chotia
JEL codes: 
C32 - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models, E22 - Capital; Investment; Capacity, E62 - Fiscal Policy, H54 - Infrastructures; Other Public Investment and Capital Stock, O47 - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence.
The objective of this paper is to analyze the effects of Public Infrastructure Investment on the economic performance of the Indian economy. We have employed a Structural Vector Autoregressive (SVAR) approach for estimation of linear interdependencies of India’s output. For this study, we have categorized four composite infrastructure sectors which encompass ten major sub sectors of infrastructure. The analysis emphasized that special focus should be paid on Infrastructure Investment in transport sub sector of infrastructure because of its maximum positive returns on output. The policy implications of the results will aid the government to counter the economic and budgetary dilemma.
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