GROSS DOMESTIC CAPITAL FORMATION AND ECONOMIC GROETH IN INDIA SINCE 1991 TO 2017

Author Name: Rajiv Lochan Jena

Volume: 01 &  Issue:

Country: India

DOI NO.: 08.2020-25662434 DOI Link: http://www.doi-ds.org/doilink/12.2020-59985279/

Affiliation:

1. Ph.d Scholar, North Orissa University, Orissa, India

ABSTRACT

This paper aims at determining the role and impact of gross domestic capital formation on economic Growth in India. The macro economic variables are introduced vide an extension of the econometric model. The empirical results have been estimated by using annual data for the period of 1990-91 to 2017-18 at current prices. The study revealed the strong role and impact of capital formation on economic growth of India. Results of the unit root test indicate that all variables are stationary at first difference in ADF test and then apply Johansen co-integration test. There is no co integration among the variables. The Vector Auto Regression (VAR) model helped to establish a long run relationship between Gross Domestic Capital Formation (GDCF) and economic growth in India.There is unidirectional relationship between GDP to GDCF, GDCF to Imports and Exports to Imports. But there is one bidirectional relationship between GDCF to Exports in India.

Key words: GDP,GDCF,VAR,Exports,Imports,Economic Growth.