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Investment and Subsidies in Indian Agriculture

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  • Raghbendra Jha

Abstract

One of the principal elements of the economic reforms program initiated in 1991 was to reduce the fiscal deficit of the central government which, at that time, faced a solvency crisis. This reduction was at least partially achieved by reducing transfers to state governments. As a result, state government budgets faced crises and agriculture, being largely a state subject, was denied adequate investment. This paper reviews the performance of Indian agriculture, particularly in the post-reform period. It attributes this lacklustre performance to the stagnation of agricultural investment whereas there has been a contemporaneous rise in agricultural subsidies. Thus while current operations are being subsidised to some extent resource for augmentation of productive capacity in agriculture are dwindling.

Suggested Citation

  • Raghbendra Jha, 2007. "Investment and Subsidies in Indian Agriculture," ASARC Working Papers 2007-03, The Australian National University, Australia South Asia Research Centre.
    • Handle: RePEc:pas:asarcc:2007-03
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    File URL: https://crawford.anu.edu.au/acde/asarc/pdf/papers/2007/WP2007_03.pdf
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    References listed on IDEAS

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    1. Gulati, Ashok & Narayanan, Sudha, 2003. "The Subsidy Syndrome in Indian Agriculture," OUP Catalogue, Oxford University Press, number 9780195662061.
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    2. J. Stephen Ferris & Bharatee Bhusana Dash, 2019. "Expenditure visibility and voter memory: a compositional approach to the political budget cycle in Indian states, 1959–2012," Economics of Governance, Springer, vol. 20(2), pages 129-157, June.

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