ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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The he Role of Pub Public lic Infr Infrastr astr astructur uctur ucture e In Investments in Re Regional ional De Development elopment

There does not appear to be consensus on the importance of public investments as productive factors in the economic development process. In an era of increasing regional identities, there is need to understand the determinants of regional economic growth. A critical examination of the relationship between public policies and regional economic growth is provided in this paper. The main lesson that emerges from the review of regional development literature is that a single incentive or development activity cannot lead to programme or project success. The empirical analysis tests the efficacy of public infrastructure investments in the development process of 15 Indian states. The empirical analysis highlights that investments in social infrastructure have the closest linkage with economic growth across lagging, intermediate, and leading states. The empirical research suggests that the composition of public investments is important in facilitating growth, and public investment is a necessary but not sufficient condition for regional economic growth. Sensitivity towards scale and spatial issues, model specification and development of conceptual linkages should be central to future work on infrastructure productivity.

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