A Study of Role of Development of Roadways Infrastructure in Enhancing the Health of Economy: Perspective to Districts of Western Vidarba

 

Bharti Chokhani, Dr. D. N Vyas

G. S. Science, Arts and Commerce College, Khamgoan MS

 

ABSTRACT:

The research work focus upon deciphering the role of infrastructure development particularly road infrastructure in boasting the health of the economy of the districts of Western Vidarba. The research work considers GDDP and expenditure on road infrastructure development as two variable whose relationship needs to be determined. The paper discuss the constraints in applying the Granger’s causality test which is the best suited for the application. The research work then proceeds with an alternate analysis techniques and determines the correlation between development of road infrastructure and boasting of districts economy.

 

KEYWORDS: GDDP, Road Development and Western Vidarba

 

1. INTRODUCTION:

The sector of transportation is one of the most important sector in any economy (Olamigoke and Emmanuel, 2013). The importance of transportation sector in any country can be defined by terming them as the life lines of any country (Infrastructure development and economic growth in Sub-Saharan Africa, 2010). These life lines carry logistics of worth billions of dollars without the transportation sector the economy will make progress towards collapsing permanently.

 

The transportation sector of any country can be considered as of fractal formations. Small and medium size transportation networks in states connect together is a repetitive manner to form a well interlinked nationwide transportation infrastructure.

 

Transportation sector is a critical element in the recipe of economics growth for any country. This element becomes an essential element when the talks are then specifically focused on developing economy (Ministry of Transport - Newzeland, 2014). The transportation on superficial level seems to be essential for economic development, but a micro level analysis would reveal that transportation sector is also closely linked to the welfare development of the people residing in that country (Siddiqui, et al., 2015).

 

 

Transportation sector when considered includes movement of goods by some means from one point to another so that the movement of goods can bring about a profitable return (Dewangan, et al., 2015). The goods referred here can be manufactured goods, agro output, forest output or any form of logistic, means in this context can be transportation medium i.e. through air, water or land.

 

Transportation through water medium is restricted to availability of water channels that has the capacity to carry gigantic logistics. Water channels of such capacity are not prevalent in every region and only few regions enjoy the same. 

 

Transportation through airways is fast and efficient but the cost associated with it also high. Moreover, airway transportation is in general preferred for overseas transportation and is generally not a favourite for domestic transportation. Hence, transportation by roadways remains as the option. Transportation through roadways is an optimisation of logistics costs and time to reach to destination.

 

A good road infrastructure is always a key to economic development of country especially in Indian scenario. In India, manufacturing hubs are randomly distributed. The consumers of those manufactured items are also distributed. Hence, transporting goods from manufacturer to consumer is essential without tremendously increasing the cost, which is possible by transportation through either roadways or railways.

 

Indian railway is already performing and delivering services in best of their operating strength and additional loads on them might affect their efficiency significantly to deliver the goods in an effective manner.

 

Roadways, therefore, act as a primary mode of transportation of goods. A good road network and associated infrastructure will ensure easy delivery of goods and jerk free rides for goods. A good infrastructure will reduce to jerks experience of the transported goods; therefore require less packaging material and less damage to goods, thus, ensuring more profit to the sellers and in turn better revenue for the government agency which in turn will be used for development of state and national infrastructure.

 

Roadways not only ensure transportation of goods in an effective manner but also ensure that the revenue due to other services is also increased. Such through sale of agro produced, boosting tourism or boosting effective commuting. Thus, all these activities are somehow related to social welfare of the people as well. Hence, roadways and related infrastructure in present day is a sign of how good the economy of the country is progressing.

 

This research paper focuses on the role of infrastructure particularly roads in promoting growth and development in Western Vidarbha region. The Western Vidarbha region constitutes Buldhana, Akola, Washim, Amravati and Yavatmal. The purpose of this work is to analyze the boost received in growth of districts by development of road infrastructure in the respective five regions.

 

This work will reveal the level and pattern of investment that is being done in development of road infrastructure and associated development that resulted from it. The past and what more needs to be done for achieving further more progressive results.

 

1.1 Present Scenario:

The Western Vidarbha region comprises of five districts, they are namely Buldhana, Akola, Yavatmal, Washim and Amravati. These districts are major industrial hubs of the Maharashtra state, especially the district of Buldhana and Amravati (Dhanagare and Vyas, 2015). The region of Yavatmal and Washim is famous for their agro produced goods. The public bodies in the region are well aware of the states manufacturing activities and are therefore, spending considerable resources on development of a fine road infrastructure that can act as feeder for railways and airports. Thus, reducing the time to reach market and to less damage of goods during transportation. The Districts have witnessed development of road infrastructure in both rural and urban areas. Hence, the domestic product through Agriculture sector and transportation sector has increased, but the relation between them needs to establish through statistical methods.

 

 

2. METHODOLOGY:

2.1 Failure of Granger’s Causality Test

Many researchers in the past have worked on finding the relation between the growth in economy and development in road infrastructure (Dewangan, et al., 2014) (Siddiqui, et al., 2015). For the same the first choice is to use Granger’s Causality test. In the test, the two variables are year wise GDP and expenditure on Road development or year wise GDP and total length of road in various years. For Granger’s test a minimum of fifteen data points is needed, that should represent stationary series (Kum and Altintas, 2013). In the present research, the study duration is 2002-2015 which is less than the minimum recommended data points for carrying out Granger’s test. Hence, Pearson Correlation test will be carried out to perform the analysis for the research work.

 

2.2 Variables under Consideration

The variable that will be considered in correlation analysis are the district wise GDP and expenditure on development of road infrastructure. The data will be a time series data. Further sector wise GDDP will be correlated with the expenditure on development of road infrastructure.

 

3. DATA COLLECTION:

The ancillary data collected for the research work is from the Published reports provided by different public bodies responsible for collecting, Publishing and maintaining it. Some of the agencies from where the data was obtained include planning commission of India (presently known as the Nitiayog) and Directorate of Economics and Statistics, Maharashtra.

 

4. ANALYSIS AND RESULTS:

The following section presents the analysis of the data collected from various sources to determine the relationship between the economic growth and development of road infrastructure.

 

Table 1, presents the district wise total GDP for various years from 2002 to 2012 for the five districts that comprises wester Vidarba. The GDP is an excellent indicator of health of the economy and its size hence, GDP will be used as a variable for indicating economy of the region. The variable presented in table is also known as GDDP i.e. Gross District Domestic Product.

Table 1: GDDP of districts comprising western Vidarba in Rupees Lakhs at Current Price

Year	Buldhana	Akola	Amravati	Yavatmal
2002-2003	357600	374699	521568	469268
2003-2004	393048	398853	580961	525994
2004-2005	397606	404122	597052	526314
2005-2006	485099	458893	711932	675918
2006-2007	571930	571354	797585	781632
2007-2008	723500	666300	979000	928200
2008-2009	830300	764900	1113500	1118000
2009-2010	1097500	1091700	1613700	1385900
2010-2011	1218600	1176600	2012900	1885900
2011-2012	1398900	1272200	2079900	1649900

Source: Economic Survey of Maharashtra of various years

From the table it is evident that the GDDP for each district is growing.

 

Table 2, presents the district wise expenditure on road development in various years. The variable is taken under consideration because the road length of State highways and National highways in these districts during the period under consideration almost remained constant. The administration gave stress upon enhancing the health of these already present road infrastructure rather than constructing new ones. However, the data depicts that road length in rural areas has increased considerably. The variable expenditure on road development accounts for these increased road length, as fraction of this expenditure is used to increase length of rural roads.

 

Table 2: Expenditure on road infrastructure development in wester Vidarba in Rupees Lakhs

Year	Buldhana	Akola	Amravati	Yavatmal
2002-2003	339.98	333.35	-	-
2003-2004	299.21	370.2	-	-
2004-2005	258.44	407.05	-	-
2005-2006	217.67	443.91	-	-
2006-2007	176.9	480.75	1482.78	836.22
2007-2008	967.36	653.22	3314.3	2267.3
2008-2009	1757.82	825.69	4173.96	2534.48
2009-2010	967.3	1148.58	3975.24	2795.62
2010-2011	2605.06	1705.65	3248.74	3940.1
2011-2012	2339.44	1531.24	4993.4	5784.22
-Values not available for the year and cannot be interpolated also

Source: Socio-Economic Report District Wise, Directorate of Economics and Statistics Maharashtra

 

 

 

Table 3 (a,b,c,d), shows the Pearson Correlation coefficient between the district GDP and the district wise expenditure.

 

(a)     Correlation between GDP and Expenditure on Road Development- Buldhana District

 

 

 

(b)     Correlation between GDP and Expenditure on Road Development- Akola District

 

 

(c)      Correlation between GDP and Expenditure on Road Development- Amravati District

 

(d)     Correlation between GDP and Expenditure on Road Development- Yavtmal District

 

From the analysis presented in table 3 and its subparts the following results can be derived.

1.      GDDP and expenditure on road infrastructure development is highly correlated.

2.      High correlation coefficient indicate that the better the expenditure on the road development the better the health of the economy of the district.

3.      The results are interpreted in light of the fact that the development of new roads is nearly stagnant in the districts and the expenditure is on improving the health of existing infrastructure so that the transportation using the roads is easier and free from blocks. This improved infrastructure provides a cushion for transporting the products, thus reducing the damage of products that gets incurred on them if the infrastructure is poor. A less quantity of damaged goods implies that the number of products that can be sold in the market is high, thus increasing the profit of the manufacturer and in turn increasing the revenue received by the government through these activities.

 

5. CONCLUSION:

From the research work the following conclusions can be derived:

1.      Grangers Causality test is the most suitable analytical way to study the effect of variable on GDP. However it was observed that present research lacks minimum number of data points that is needed to carry out Granger’s test. A minimum number of data points is necessary so as to reduce the bias in the result. In present case absence of minimum number of data points i.e. minimum of fifteen data points, would have resulted in biasing of test results.

2.      GDDP and Expenditure on road development have high correlation between them. This indicates that the better the health of road infrastructure the better the economy of that district makes progress.

 

High significant correlations scores for all district indicates that GDDP of the district is bound to increase as the infrastructure of roadways gets improved. The contribution of sector wise GDDP will also increase if road infrastructure gets developed. Especially the contribution of agriculture sector and transportation and storage sector will increase in the GDDP.

 

6. REFRENCES:

1.       Dewangan, J. K., Vyas, D. H. and Siddiqui, I. N., 2014. Analysis of factors affecting consumer behaviour towards purchase from organized retail stores in Chhattisgarh, using Inductive Modelling. South Asia Journal of Multidisciplinary Studies, 1(8), pp. 129-137.

2.       Dewangan, J. K., Vyas, D. H. and Siddiqui, I. N., 2015. Effects of demographic variables on consumer buying behaviour: with reference to purchase of household commodities from organized retail stores in Chhattisgarh India. Global journal of multidisciplinary studies, 4(9), pp. 168-178.

3.       Dhanagare, A. K. and Vyas, D. N., 2015. Analysis of impact of human resource development practices on organizational performance with reference Buldhana region. Global journal of multidisciplinary studies, 4(10), pp. 1-8.

4.       Infrastructure development and economic growth in Sub-Saharan Africa (2010) Abass Adewale Bello.

5.       Kum, M. and Altintas, H., 2013. Multivariate Granger Causality between Electriciy Generation, Exports, Prices and Economic Growth in Turkey. International Journal of Energy Economics and Policy, pp. 41-51.

6.       Ministry of Transport - Newzeland, 2014. Contribution of transport to economic development, Christchurch: Ministry of Transport - Newzeland.

7.       Olamigoke, E. A. and Emmanuel, A. A., 2013. The Role of Road Transportation in Local Economic Development: A Focus on Nigeria Transportation System. Developing Country Studies, 3(6), pp. 46-55.

8.       Siddiqui, I. N., Vyas, D. H. and Dewangan, J. K., 2015. Effects of advertising, brand influence and subjective norms on consumer buying behaviour: with reference to purchase of over the counter drugs in Chhattisgarh, India. Global Journal of Multidisciplinary Studies, 4(9), pp. 179-185.

9.       Siddiqui, I. N., Vyas, D. J. H. and Dewangan, J. K., 2015. Cross sectional analysis of the product evolution and product concept communication to consumers: with reference to over-the-counter drugs. Global Journal of Engineering, Science and Social Science Studies, 1(10), pp. 1-12.