Transport and energy consumption in India: the ARDL bound testing approach

The study attempts to empirically examine the dynamic casual relationships between transport and energy consumption in the case of India using the time series data for the period 1970-2009. This research tests the interrelationship between the variables using the ARDL bound testing to cointegration procedure. The bounds test results indicate that there exists long run relationship between transport and energy consumption. The Granger causality, based on ECM, further finds the existence of bidirectional causality between the two variables. The empirical results suggest that energy consumption could be used as a policy variable to forecast transportation in India. The reverse is also substantially true for the energy policy. The integration of these two results could provide important policy recommendations for infrastructure development in India.