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Do Economic Reforms Promote Urbanization in India?

Tripathi, Sabyasachi (2018): Do Economic Reforms Promote Urbanization in India?

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Abstract

We assess the impact of economic reforms on urbanization in India for the period of 1991 to 2016. It is found that economic reform variables (except import of goods and services as % of GDP) have a positive effect on urbanization. The vector error correction model shows that economic reforms have influenced only on total urban population with a very slower rate with the speed of adjustment of 0.003. The short run effect is also negligible. Granger causality test shows that there is no causal relationship between them. Therefore, we conclude that economic reforms do not promote urbanization in India. Economic reforms for urbanization are required though promotion of small and medium cities, human capital, cultural mobility and formulating proper plans for new green cities.

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