MODELLING THE IMPACT OF DETERMINANTS OF MANUFACTURING OUTPUT IN INDIA: A PANEL DATA ANALYSIS

The objective of this paper is to find the determinants of manufacturing output and their long-term and short-term relationship. This paper adopts panel data for the period of 21 years from 2000 to 2020 in 25 Indian States. To examine the long- term and short-term relationship, panel ARDL model is applied. Second generation unit root tests have been applied to check the stationarity of the variables due to cross section dependency among the Indian states. The results show that the variables of total persons engaged, fixed capital, fuel consumed, working capital and service sector are positively and significantly impacted manufacturing output in long-run except agriculture production. In short- run, only total persons engaged, fuel consumed and output of service sector have a positive and significant impact on manufacturing output while other variables affected positively but insignificantly to the manufacturing output.