Role of Infrastructure in Regional Development-A Study over the Plan Period

A Study over the Plan Period Buddhadeb Ghosh Prabir De In literature, the impact of public investment and physical infrastructure on both private investment behaviour and regional economic development has been found to be highly significant and positive. The latter hypothesis is tested here on Indian states over the Plan period using OLS regression. For this purpose, a physical infrastructure development indicator is formulated with the help of principal component analysis. With various unavoidable data limitations, the results are significantly conclusive: first, regional disparity has been rising in recent period, and Plan outlay has not played any major role in this regard; second, regional imbalance in physical infrastructure has been found to be responsible for rising income disparity across the states.