Infrastructure and Its Impact on Economic Growth Using the Autoregressive Distributed Lag (ARDL) Model: India as a Case Study

This study examines the long- and short-term dynamic impacts of participatory investments in infrastructure (Transport and energy) on India's economic growth, as measured by GDP, from 1994 to 2023, employing the Autoregressive Distributed Lag (ARDL) model. The stationarity of time series variables was assessed by unit root tests, namely the Augmented Dickey-Fuller (ADF) test and the Phillips-Perron (PP) test, indicating that all variables are integrated of the first order. The estimation results for both long- and short-term connections demonstrate strong beneficial impacts of participatory investments in transportation and energy on GDP. Over the long term, the effects of participation investment in transportation surpass those of participatory investment in energy; conversely, in the short term, the opposite holds true. Furthermore, a cointegration relationship exists between participation investments in the transport and energy sectors and India's GDP. GDP necessitates roughly six years to revert to its equilibrium value in the long term after experiencing short-term disturbances in participatory investments. Additionally, the Toda-Yamamoto causality test revealed a unidirectional long-term causal relationship between GDP and participatory investment in transport, as well as from participatory investment in energy to GDP.