Munich Personal RePEc Archive

Infrastructure and Development Interlinkage in West Bengal: A VAR Analysis

Majumder, Rajarshi and Mukherjee, Dipa (2005): Infrastructure and Development Interlinkage in West Bengal: A VAR Analysis. Published in: Artha-Niti , Vol. III, No. 1 & 2 (2005)

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Abstract

Theoretical propositions proclaim that the association between Infrastructure Availability and Development of a region is quite strong and runs from the former to the latter. Empirical studies are however, inconclusive. While few researchers have concluded that the impact of infrastructure on development levels, though positive, is not significant, equally large numbers of studies claim that infrastructure explains a substantial part of development levels. In this paper the association between infrastructural availability and development for the West Bengal economy is explored using a multidimensional approach and a time series study. It is observed that both developmental and infrastructural indices have shown a continuously rising trend during 1971-2001. The causation seems to be stronger from infrastructure to development. The long run relationships suggest strong positive impact of infrastructural availability on development levels. Different facets of infrastructure seem to have different impacts on different dimensions of development. A segmented policy aiming at specific sectors need to be adopted, with the greatest importance being attached to those infrastructural indicators that have highest total impact and strongest 'linkages' across sectors. Only this can sustain the development 'push' generated in West Bengal. Otherwise, the superstructure will have only a weak base and will come crashing down any day.

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