Total Factor Productivity Growth in Indian Agriculture and Regional Convergence

The present study has estimated total factor productivity (TFP) growth and its contribution to agricultural output growth across 17 major states in India for the period from 1981–82 to 2019–20. This is followed by an empirical examination of the convergence of TFP to understand how technology spread in India. The Data Envelopment Analysis Malmquist productivity index is used to estimate the TFP growth, whereas the inter-state convergence is tested using the sigma and beta convergence approaches. The study contributes to the literature by providing TFP estimates at the disaggregate state level over a longer period to make an assessment on account of an increase in public investment in R&D, irrigation, credit flow, and several other policy initiatives taken from the 2000s. The analysis indicates large temporal and spatial variations in the output, input, and TFP indices, validating that the technological diffusion on account of HYVs under the green and yellow revolutions has been uneven. A low TFP growth is confirmed in several states over time, the national average being 1.06% from 1981 to 2019. However, the contribution of TFP to output growth was low at 41.42% during the overall study period, but it was found to have increased to 60% during the last decade. The conditional convergence reveals a tendency of productivity in the poorer states to catch up with the richer states, albeit at a very slow speed of 1%. It is important to enhance expenditure on R&D, extension, technology, and irrigation more in the eastern states to augment and sustain productivity growth to meet the future demand for food.