Subsidies have been a way for the government to incentivise producers and consumers towards the a certain commpodity or service. It is an essential tool for developing economies to stimulate consumption and production in the economy. Our paper would examine how subsidies affect economic growth in India, and whether or not it helps in promoting export-led growth stratergies. In order to show the effect of subsisidies on growth I connect government subsidies to exports. Subsequently, using the Solow model, I argue that the capital inflows associated with export promotion raises economic growth. This theoretical hypothesis is tested using a VAR analysis. We fail to find evidence that subsidies and growth are related in India.
Chaudhari, Kanishk, "Effects of Subsidies in promoting Export-led Growth Strategy in India" (2021). Senior Independent Study Theses. Paper 9224.
Subsidies, Exports, Economic Growth, India
Bachelor of Arts
Senior Independent Study Thesis
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