Investment and Subsidies in Indian Agriculture
10 Pages Posted: 18 May 2007
Date Written: May 2007
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.
Keywords: Agricultural Subsidies, Agricultural Investment, India
JEL Classification: E22, H20, H54, N50
Suggested Citation: Suggested Citation