Should India invest more in less-favored areas?:
Developing countries have to allocate limited government resources for rural areas among different investment activities and regions to achieve the twin goals of productivity growth and poverty alleviation. This is particularly important at a time when many countries are facing severe financial constraints. This paper develops a framework and provides empirical evidence on the impact of government investments in technology, irrigation, education and infrastructure on agricultural productivity growth and rural poverty reduction in rural India. The results reveal that government investments in more favored areas played significant roles during the green revolution period. But the marginal returns from additional government investments in these areas have declined in more recent years. It is now the less-favored areas where marginal returns are higher. This result has important policy implications for where government investments should be targeted in order to achieve further productivity growth and rural poverty reductions.
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- Bell, Clive & Rich, Robert, 1994. "Rural Poverty and Aggregate Agricultural Performance in Post-independence India," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 56(2), pages 111-33, May.
- Datt, Gaurav & Ravallion, Martin, 1997. "Why have some Indian states performed better than others at reducing rural poverty?," FCND discussion papers 26, International Food Policy Research Institute (IFPRI).
- Rosegrant, Mark W. & Evenson, Robert E., 1995. "Total factor productivity and sources of long-term growth in Indian agriculture:," EPTD discussion papers 7, International Food Policy Research Institute (IFPRI).
- Kerr, John M., 1996. "Sustainable development of rainfed agriculture in India:," EPTD discussion papers 20, International Food Policy Research Institute (IFPRI).
- Ravallion, Martin & Datt, Gaurav, 1995. "Growth and poverty in rural India," Policy Research Working Paper Series 1405, The World Bank.
- Ghose, A K, 1989. "Rural Poverty and Relative Prices in India," Cambridge Journal of Economics, Oxford University Press, vol. 13(2), pages 307-31, June.
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