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Public Expenditure and Agricultural Production in Meghalaya, India- An Application of Bounds Testing Approach to Co-Integration and Error Correction Model

Author

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  • Utpal Kumar De
  • Dahun S Dkhar

    (Department of Economics, North-Eastern Hill University, India)

Abstract

An attempt is made in this paper to examine the short and long run relationship between government expenditure on agriculture and its allied sector and agricultural output of Meghalaya. The study is based on a time series data of 30 years from 1984-85 to 2013-14. During this period, the state economy has experienced both upswing and downswing in its agricultural sector. Government expenditure in different sectors including agriculture and its allied activities, education, transport etc is expected to promote agricultural production. Here ARDL approach to co integration and an error correction representation of the ARDL model have been used due to certain advantages. The result of the Bounds test indicates the presence of a long-run co integrating relationship between the variables in the study. The results reveal that in the long run, the effect of public expenditure through agriculture and allied activities, on agricultural output is significantly negative, while expenditures on education and transport on agricultural output are significantly positive that is in line with several earlier studies. Public expenditure in healthcare however does not significantly affect agricultural output. The findings reveal that judicious use of government spending have significant potential to accelerate agricultural development and improve its efficiency.

Suggested Citation

  • Utpal Kumar De & Dahun S Dkhar, 2018. "Public Expenditure and Agricultural Production in Meghalaya, India- An Application of Bounds Testing Approach to Co-Integration and Error Correction Model," International Journal of Environmental Sciences & Natural Resources, Juniper Publishers Inc., vol. 8(2), pages 71-78, January.
    • Handle: RePEc:adp:ijesnr:v:8:y:2018:i:2:p:71-78
    DOI: 10.19080/IJESNR.2018.08.555735
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    References listed on IDEAS

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    3. Benin, Samuel & Mogues, Tewodaj & Cudjoe, Godsway & Randriamamonjy, Josee, 2009. "Public expenditures and agricultural productivity growth in Ghana," 2009 Conference, August 16-22, 2009, Beijing, China 51634, International Association of Agricultural Economists.
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    5. Binswanger, Hans P. & Khandker, Shahidur R. & Rosenzweig, Mark R., 1993. "How infrastructure and financial institutions affect agricultural output and investment in India," Journal of Development Economics, Elsevier, vol. 41(2), pages 337-366, August.
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    7. Selvaraj, K. N., 1993. "Impact Of Government Expenditure On Agriculture And Performance Of Agricultural Sector In India," Bangladesh Journal of Agricultural Economics, Bangladesh Agricultural University, vol. 16(2), pages 1-13, December.
    8. Sharada Weir, 1999. "The effects of education on farmer productivity in rural Ethiopia," CSAE Working Paper Series 1999-07, Centre for the Study of African Economies, University of Oxford.
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    2. Hassan, Samir Ul & Khanday, Shafi Ahmad & Ahmad, Masroor & Mishra, Biswambhara & Rymbai, Motika Sinha, 2022. "A Historical Cum Empirical Overview of Agriculture Spending and Output Nexus in India," AGRIS on-line Papers in Economics and Informatics, Czech University of Life Sciences Prague, Faculty of Economics and Management, vol. 14(3), September.
    3. Dr Christopher Mmaduabuchukwu Okpala & Dr Felix Nwaolisa Echekoba & Amalachukwu Chijindu Ananwude, 2022. "Agricultural Credit Guarantee Scheme Fund, Government Expenditure on Agriculture and Agricultural Output in Nigeria 1990 – 2020," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 6(5), pages 859-867, May.
    4. Debasis Panda & Ankita Sahu, 2023. "Links between Public Expenditure and the Performance of Agriculture in India," Journal of Studies in Dynamics and Change (JSDC), ISSN: 2348-7038, Voices of Inclusive Change and Expressions- (VOICE) Trust, Dehradun, Uttarakhand, vol. 10(2), pages 1-10, April-Jun.

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    Keywords

    earth and environment journals; environment journals; open access environment journals; peer reviewed environmental journals; open access; juniper publishers; ournal of Environmental Sciences; juniper publishers journals ; juniper publishers reivew;
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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