International Journal For Multidisciplinary Research

E-ISSN: 2582-2160   •   Impact Factor: 9.24

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Infrastructure, Urbanization and Economic Growth: A Nexus in Indian States

Author(s) Dr. Prerna Panda
Country India
Abstract Urbanisation acts as a primary catalyst for economic advancement. By leveraging city externalities, particularly in conjunction with core infrastructure advancements, it becomes possible to propel the growth trajectory. This study empirically examines the impact of infrastructure and urbanization on economic performance across 20 prominent Indian states spanning the years 2005 to 2019. It employs four agglomerating and networking infrastructure dimensions to construct a multidimensional infrastructure index. The research uses fixed-effects model and FMOLS techniques to explore the enduring equilibrium association among infrastructure, urbanization, and economic growth. Furthermore, a causality test is utilized for assessment of the panel data. The empirical outcomes reveal a positive and statistically significant effect of both infrastructure development and urbanization on both long-term and short-term economic growth in Indian states. The results lend support to the paradigm that “growth pays its way”. The findings of the study suggest that most Indian states fall under poor to medium infrastructure development which requires considerable attention of policy makers. Indian economic growth needs to be supported by planned urbanization and infrastructure development to create values that can channel cumulative and circular causation processes further fuelling growth.
Keywords Agglomeration; Network externalities, Spillovers, City density
Field Sociology > Economics
Published In Volume 7, Issue 6, November-December 2025
Published On 2025-12-21
DOI https://doi.org/10.36948/ijfmr.2025.v07i06.64125
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E-ISSN 2582-2160
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