ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Rural infrastructureSubscribe to Rural infrastructure

Revisiting the Relationship between Public and Private Capital Formation in Indian Agriculture

Using the decennial All-India Debt and Investment Survey, this paper examines the spatial and temporal trends of private fixed capital expenditure among rural households. It also examines the impact of public investment and input subsidy on private agricultural investment. It notes that there has been a substantial increase in the spending fixed capital with significant interstate variations. An econometric analysis reveals significantly positive impact of public investment in agriculture and irrigation on private agricultural investment.

What Does the Rural Economy Need?

The agricultural sector has performed worse than the other sectors over the years. The shares of non-agricultural employment and output have increased, while70% of agricultural householdscannot meet their low consumptionneeds even after diversification of sources of income. An analysis of budgetary provisions for the rural economy suggests that the government has not done enough to address some of these well-documented problems, and does not have the required vision to substantially increase rural employment opportunities.

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