Beyond the Fields: Uncovering the Impact of Government Spending on Indian Agricultural Productivity

Published by: Admin

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Authors: Haider Hassan Itoo and Mohammed Ayub Soudager

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Abstract

This study investigates the critical role of government expenditure in fostering agricultural productivity within India over the period 1990-91 to 2020-21. Utilizing data sourced from the national statistical account (GOI) and the World Bank, the analysis employs the Autoregressive Distributed Lag (ARDL) model to examine the dynamic relationship between these variables. Robustness checks are conducted using the Dynamic Ordinary Least Squares (DOLS) method. The empirical findings unequivocally demonstrate a statistically significant and positive association between government expenditure on agriculture and agricultural productivity in both the short and long run. Moreover, the study highlights the crucial contributions of agricultural labor force, gross cropped area, and economic growth in enhancing agricultural productivity. These results underscore the imperative for the Indian government to proactively implement targeted policies and strategies that significantly increase public investment in the agricultural sector. Such a commitment is crucial for ensuring food security, reducing import dependence, bolstering rural incomes, and creating sustainable employment opportunities within the agricultural domain. This research provides valuable insights for policymakers to formulate effective environmental and fiscal policies that maximize agricultural productivity and achieve desired economic outcomes.

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