Links between Public Expenditure and the Performance of Agriculture in India
Keywords:
Agricultural Production, Public Expenditure on Agriculture, Rural DevelopmentAbstract
It is evident that the government spending on the agriculture sector has been stagnant in the last few years and so also the sector's contribution to total GDP. Thus, an attempt is made in this paper to establish a link between public expenditure on agriculture and agricultural output. It is also believed that government spending on agriculture is not the only factor which contributes to the AGDP, factors like special area program, irrigation and flood control, village & small industries and rural development contributes too. All mentioned factors comprised and took it as rural development and applied regression analysis for 20 years of data taken from State Finances published by the Reserve Bank of India. Factors like spending on rural development and special area program directly affects the agricultural output which reflects reducing regional disparity. The average ratio of public expenditure on the sector to AGDP has been meager as it stood at 4.85% but the sector has the potential to improve its output if the policymakers focus on reallocation of available resources among sub-heads discussed above.
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