Agriculture, Manufacturing and Economic Growth in India: A Co-integration Analysis
Keywords:Agriculture Growth, Economic Growth, Manufacturing Growth, Stationarity, ARDL Model, Granger Causality
This study examine the most debatable question of the last three decade, i.e., “Does the agriculture growth affect the economic growth?” 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 analysis the relationship among the variables, i.e., agriculture, manufacturing and economic growth for the short as well as long period of time. As per outcome, result shows that, uni-directional causality running from manufacturing and economic growth to agricultural growth. Moreover, unidirectional causality running from economic growth to manufacturing growth. 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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