Private investment and employment correlation in india
Answers
Private investment has slumped in India and its revival is vital for accelerating India's growth rate on a sustained basis. This paper analyzes the determinants of aggregate private investment and its components corporate and non-corporate private investment for the period 1980-81 to 2013- 14.
Explanation:
The results also reveal that a “market friendly” incumbent and an increase in foreign direct investment dampen the magnitude of the crowding out effect of public investment.
Formal tests were conducted to examine whether the crowding out effect was driven by political uncertainty and political business cycle channels but no evidence for the same is found.
The results also reveal that public infrastructure (represented by kms of roads per capita) has a positive effect on private investment in the short run.