An Empirical Study On The Relationship Between Infrastructure Investment And Economic Growth In India

Infrastructure is a necessary condition for economic and social development,it has influence on all aspects of people’s lives.Numerous economists have long noted and carried out a number of related research on infrastructure investment.These researches explain the importance of infrastructure and its impact on economic growth from the perspective of theoretical and empirical analysis.As India’s economy has entered a period of rapid growth, the role of infrastructure in India’s economic growth has become more and more concerned by the academia.The paper reviews the general situation of economic development in India since independence and analyses the recent scenario of infrasturcture investment in India,with the recognition that inadequate infrastructure is one of the major constraints on India’s ability to sustain high GDP growth.It conducts an overview of the trends in infrastructure investment from the 10 th Five Year Plan onwards, and examines the linkage between infrastructure and economic growth.After the statistical description,we made an analysis of the remarkable effect by using the Cobb-Douglas Production function and Principal Component Analysis(PCA).The results exhibit a very high rate of return and also highlight that, since resource constraints will continue to limit public investment in infrastructure,so,Public Private Partnership(PPP) project-based development needs to be encouraged.At the end of this thesis,it gives a brief analysis on the infrastructure investment in India and looks forward to the prospects of India’s infrastructure investment in the future.