Gross Fixed Capital Formation Suffices as a Determinant for Gross Domestic Product in India
Growth has been the most important determinant of a countries progress and can be identified as an indicator of Progress. India in the near past has been able to break free from her traditional Hindu Growth rate and progressing in acceleration. This paper aims to determine Gross Fixed Capital Formation (GFCF) as an important determinant of economic growth, which is represented by the Gross Domestic Product (GDP) in this paper. There is a further association and a perfect positive correlation between GFCF and GDP, which is in turn proved with the help of calculating the correlation coefficient. However the primary aim of the paper is to determine the impact of GFCF on GDP over the time period 1970 to 2014 for which regression analysis is used respectively and a strong impact has been estimated. Nevertheless it is checked and established that GFCF and GDP are autoregressive with the help of a three year lagged model.