Bane of Agriculture: Persistent Slowdown in Public Sector Investment

S. L. Shetty ()
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S. L. Shetty: EPW Research Foundation

A chapter in Perspectives on Inclusive Policies for Development in India, 2022, pp 395-424 from Springer

Abstract: Abstract Though there are occasional bouts of improved growth in agriculture due to better climate and rainfall, overall, the sector has been facing a crisis situation. The root cause for this has been the persistent decline in agricultural investment, in particular the public sector investment. It was after five decades of planning, that is in the Eleventh Plan (2006–07 to 2011–12) that the neglect of agriculture was recognised and plans for accelerating inter alia the public sector investment were proposed. But, it was short lived, and the sluggishness in investment has persisted. The paper has identified five broad phases in the long period of 67 years since the economic planning began in 1951–52 in the trends of farm investment in public and private sectors. The paper also dilates a while and addresses the question of the alleged dichotomy between agricultural subsidies and agricultural investment, that is whether subsidies have crowded out investment, but prefer to take a more cautious view. Finally, the paper has tried to establish that apart from relative price shift in favour of agriculture and impetus derived for labour-saving mechanisation, the policy of doubling of farm credit appears to have played a key role in facilitating higher private sector investment in agriculture in the latest investment phase indicated in the paper.

Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isbchp:978-981-19-0185-0_20

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DOI: 10.1007/978-981-19-0185-0_20

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