Impact of Agriculture Land and Population Density on Economic Growth: An Empirical Evidence from India

Deepak Kumar, Kamaljit Singh and Sunil Phougat

Economic Studies journal, 2022, issue 4, 180-195

Abstract: India is an agrarian economy and stands 2nd in the world population. India is in sixth place in the list of the most significant economies globally and 3rdin the purchasing power after the United States and China. However, India still has many growing concerns like a declining share of agriculture in the GDP, rapid increment in the population, unemployment, and others. The present study investigated the linkage between agricultural land, population density, and economic growth in India. The data from 1970 to 2019 was analysed using a vector error correction model (VECM) and Granger causality test. Further, the variance decomposition (VDC) and impulse response function (IRF) was employed for a detailed explanation of the variables’ relationship and innovation responses of explanatory variables. The Granger causality test results suggested that agricultural land and the gross domestic product have a neutral relationship. The population density and gross domestic product support the feedback hypothesis. Additionally, population density affects agricultural land, whereas agricultural land does not affect population density. From a policy perspective, policymakers should frame strategies to decide the nation’s comprehensive significance of population density. Too high populace density diminishes the natural endowment per capita. However, it facilitates infrastructure development, prompting an ideal populace density for economic development.

JEL-codes: F43 N55 O13 Q10 Q56 (search for similar items in EconPapers)
Date: 2022
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