Department of Economics and Finance
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Item Estimating an optimal debt/GDP ratio: an empirical investigation for Indian states(Inder Science, 2021-04) Rao, N.V.M.The objective of this study is to get an insight into the debt scenario of different states of India and understand the factors governing it, thereby estimating an optimal debt/GDP ratio for each of them. The study begins with estimating the trend for optimal debt and plotting it parallel to the actual debt for each Indian state for the time period from 2002-2003 to 2014-2015. Modified Blanchard (1983) model was employed for estimating optimal debt/GDP ratio. The results display notable difference between optimal debt/GDP ratios and actual debt/GDP ratios for almost all Indian states. In states where debt/GDP ratio is rising constantly, the governments should aim at achieving a balance between anchoring debt sustainability and high growth yield in the long run. For states where actual debt/GDP ratio is below the optimal level, policy focus should be on providing cushion against external financial crisis and market shocks.Item Integrating the issue of infrastructural investment with economic growth: The case of India(AGER, 2016) Rao, N.V.M.The development of a country’s infrastructure is instrumental in accelerating its economic growth. The inadequacy in the infrastructure provisions hinders population to promote self reliance in economic sectors, thereby proving to be a hindering factor to economic growth. Through this paper, we have aimed to investigate the relationship between investment in key infrastructure sectors and economic growth, in order to see how these sectors impact India’s economic growth and how significant this impact is. Further, a detailed qualitative analysis of all the infrastructure sectors involved in our study has been done with a focus on explaining the reasons behind significance/ insignificance of a particular sector. In the final part of analysis, a budget allocation model has been formulated with the help of linear programming technique. This model gives us a fresh viewpoint of the prospective inclination of government budget, and its extent of allocation to the diversity of infrastructure sectors.Item Public Infrastructure Investment and Economic Growth : A Sector Wise Investigation for India Using Westerlund Panel Cointegration Approach(The Romanian Economic Journal, 2016) Rao, N.V.M.The paper aims to empirically analyze the relationship between Public Infrastructure Investment and economic growth for India using yearly data for its twenty-eight states (excluding Telangana) over the time-period of 1999-00 to 2014-15. We have aimed to assess this eye catching issue after the recent focus of Indian government to devote a majority of public funds to finance Infrastructure. For all the states, we have taken Public Investment data for six major sub sectors falling under overall Infrastructure sector: Transport, Education, Sports, Art and Culture, Medical and Public Health, Water supply and sanitation, Irrigation, Energy/Power. The Per Capita Gross State Domestic Product is taken as an indicator to represent economic growth. For empirical analysis, we apply panel unit root and cointegration tests, and estimate a panel error correction model. The Per Capita Gross State Domestic Product along with Public Investment in analyzed sectors have a unit root at their levels suggesting that there is presence of long-term relationships among the variables for the whole sample. Finally, Granger causality tests are applied to check for the presence of causal relationships between Per Capita Gross State Domestic Product and Public Investment in different sub sectors of Infrastructure. The research study proposes that the state governments across India should focus upon private as well as foreign direct investment options which would ultimately help in improving the landscape of India’s Infrastructure sector.Item Examining the impact of public investment and private investment on economic growth: empirical evidence from BRICS nations(Inder Science, 2017) Rao, N.V.M.: This paper examines the factors impacting economic growth and the interlinkages of public investment, foreign direct investment (FDI), and private domestic investment using a panel data sample of Brazil, Russia, India, China and South Africa (BRICS) group of nations covering the time period of 1990 to 2014. We have made use of economic growth models suggested by Vu Le and Suruga (2005) in order to estimate economic growth and the individual impact of public investment on FDI and private domestic investment, respectively. The empirical results indicate that the private domestic investment along with FDI play a significant role in contributing towards economic growth. Further, analysing the impact of public investment on FDI and private domestic investment suggests that an increase in public investment in BRICS nations reduces the positive impact of FDI and private domestic investment on economic growth (crowding-out effect) when exceeding certain extent levels. Hence, we can conclude that from an overall prospective, public investment in BRICS nations has a substitutable effect on FDI and private domestic investment.