Impact of Macroeconomic Determinants on Economic Growth in India: An Empirical Assessment

Prasenjit Makur

doi:10.54741/mjar.3.4.3

Authors

Prasenjit Makur Research Scholar, Department of Commerce, The University of Burdwan, Burdwan, W.B., India Assistant Professor, Department of Commerce, Calcutta Girls’ College, 3, Goaltuli Lane, Kolkata-13 ,W.B., India

DOI:

https://doi.org/10.54741/mjar.3.4.3

Keywords:

investment, growth, inflation, development, exchange rate, regression

Abstract

The impact of macroeconomic determinants on Indian economic growth measured by GVA is the foundation of this study. There are some factors that affect foreign direct investments. It consists of the country's political stability, trade openness, inflation rate, economic stability, investment policies, rules and regulations imposed on exchange rates, and foreign reserves. Additionally, foreign direct investments both increase trade and provide financial aid. Foreign direct investments have helped the Indian economy's balance of payment issues. This paper's main goal is to examine how macroeconomic factors affect the expansion of the Indian economy. FDI Inflows (FDI), Consumer Price Index (Inflation Rate), Foreign Exchange Rate with US$, and Gross Value Added (GVA) are used as the study's variables. The influence of the study’s variable on the Indian economy is examined using simple regression and Pearson's correlation approaches. The study is based on secondary data gathered from 2005 to 2020 via the World Bank website and RBI DBIE database. According to the empirical findings, there is a strong correlation between GVA and Exchange Rate with US$ and CPI, whereas the moderate correlation between FDI and GVA exists which is important for the expansion of the Indian economy.

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