The Impact of New Economic Reforms 1991 on Infrastructure Financing and Socio-economic Development of Kerala: An Appraisal after Three Decades

India’s economic reforms of 1991 were a radical shift from the dysfunctional development strategy and a move away from the socialistic approach that the country had followed in the previous decades. The reform measures significantly changed lives by improving living conditions and alleviating poverty. The economic reforms of 1991 are considered a boon to the state of Kerala, which was facing severe constraints in sourcing finance for infrastructure projects. This research attempts to establish a cause-and-effect relationship between foreign direct investment (FDI), infrastructure development and economic growth during the pre- and post-reforms period in the state. The study explores this issue using econometric analysis done on time-series data from 1970 to 2020. It analyses the impact of infrastructure financing on infrastructure development and economic growth at an aggregate level considering the state as a unit of analysis, using a multivariate method. The results of the research indicate that infrastructure development and economic growth have a positive moderate relationship with change in FDI. The findings may be used as reference material for further research on the impact of investments on economic development.