Agriculture, Manufacturing and Economic Growth in India: A Co-integration Analysis

Journal of Economics and Business

ISSN 2615-3726 (Online)

ISSN 2621-5667 (Print)

Published: 07 July 2020

Agriculture, Manufacturing and Economic Growth in India: A Co-integration Analysis

Imran Ali Baig, Md. Safdar Ali, Abdus Salam, Shah Mohd. Khan

Aligarh Muslim University (India)

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Pages: 995-1004

Keywords: Agriculture Growth, ARDL Model, Economic Growth, Granger Causality, Manufacturing Growth, Stationarity


This study examined the most debatable question of the last three-decade, i.e., "Does the agriculture growth affect economic growth? "And also assess the long-run relationship between the variables, namely agriculture, manufacturing and economic growth in India with the use of annually data from 1966-to 2016. The study employed unit root and causality test suggested by the Dicky fuller, Phillips-Perron and Granger, respectively. Besides, ARDL techniques used to analyze the relationship among the variables, i.e., agriculture, manufacturing and economic growth for the short as well as a long period. As per outcome, the result shows that uni-directional causality running from manufacturing and economic growth to agricultural growth. Furthermore, uni-directional causality running from economic growth to manufacturing growth in India. Results also showed that bidirectional causal relationship between economic and agriculture growth. It can be concluded that this study support of a very famous statement "agriculture is the engine of economic growth" this statement is valid for the short period of time, but manufacturing contributed more than agriculture sector to the economic growth in the long run in India.


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