Stagnating productivity, declining investment and high unemployment continues to present India with consistent macroeconomic challenges. Training in gross capital formation (GCF) aims to increase work and economic development (GDP). The research discusses, using recent data from time series data of 2010 to 2019 in a vector auto-regressive (VAR) system, the causality effects of the variables. The findings of the VAR model demonstrate that the gross capital formation has negative relation with GDP but study also found that as GDP increases, GCF also increase. On the other hand, the model shows that unemployment (UNEMP) has no short-term impact on economic development (GDP). The findings for the other example indicate an important and healthy association between GCF and unemployment, and the third model indicates that GDP and unemployment have a reverse relationship. Therefore, the report suggests the implementation of an expansionary fiscal policy by the fiscal authorities, which would promote economic development, consumption and jobs.

Economic Growth (GDP), Gross Capital Formation, Unemployment, VAR (Vector Auto – Regressive)