A Case Study on the trend of poverty and its impact on the economic growth of Indian Economy

Abstract Education is a multidimensional process, on one side, it enhances economic growth and on the other side, it reduces poverty by increasing productivity. Poverty has strong connections with education and economic growth. This study utilizes time series data from 1975 to 2022 on physical capital, poverty, education, and its subsequent impact on economic growth. The primary objective of this study is to explore how variations in poverty rates, levels of education, and investments in physical infrastructure influence GDP growth in developing nations. Through the use of secondary data from reputable sources such as the World Development Indicators (WDI) database and the World Bank, we conduct detailed regression analyses, correlation tests, and Granger causality tests to examine the impact of these factors on economic performance. This study delves deeply into the complex relationship between Gross Domestic Product (GDP) and key socioeconomic factors—poverty, education, and physical capital—in India. Education and physical capital affects economic growth positively and significantly. And, poverty and economic growth are inversely and significantly related. Additionally, the study incorporates elasticity analysis to quantify the responsiveness of GDP to changes in education, physical capital, and poverty levels. These elasticity measures provide valuable insights into the potential outcomes of policy interventions aimed at promoting education, infrastructure development, and poverty alleviation strategies. The implications of this research are significant for policymakers and stakeholders in the development community. By gaining a deeper understanding of the mechanisms driving economic growth in developing countries, decision-makers can formulate more effective and targeted policies to promote inclusive and sustainable development.