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Targeting Agricultural Investments and Input Subsidies in Low-Income Lagging Regions of India

Seema Bathla (), Pramod K. Joshi () and Anjani Kumar ()
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Seema Bathla: Jawaharlal Nehru University
Pramod K. Joshi: International Food Policy Research Institute (IFPRI)

The European Journal of Development Research, 2019, vol. 31, issue 5, No 1, 1197-1226

Abstract: Abstract Poverty in India has been declining consistently over the years, yet it is home to 172 million poor people. Most of India’s poor are concentrated in rural areas and are dependent on agriculture. This poses a serious challenge to the exploration of potential pathways that could effectively eradicate poverty and accomplish the United Nations Sustainable Development Goals. We estimate the effects of various types of investment in rural areas in accelerating agricultural productivity and reducing rural poverty, and find differential impacts of investments and subsidies across low-, middle-, and high-income states. Private investment in minor irrigation, public investments in agricultural research and development, and subsidies on irrigation and electricity have the highest marginal returns in low-income states. Further, the payoffs from additional spending in promoting agricultural income are also higher in low-income states, suggesting targeting these locations with strategic investments and subsidies to improve agricultural productivity and reduce poverty.

Keywords: Rural poverty; Agriculture productivity; Public expenditure; Input subsidies; Private investment; Marginal returns (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1057/s41287-019-00207-5

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The European Journal of Development Research is currently edited by Spencer Henson and Natalia Lorenzoni

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Handle: RePEc:pal:eurjdr:v:31:y:2019:i:5:d:10.1057_s41287-019-00207-5