Trends and Impact of Budgetary Allocations to Agricultural Development in India

This paper has analyzed the trends and impact of budgetary allocations to agriculture and allied activities in the major states of India. The time series data (1985 to 2006) on budgetary expenditure on agriculture and allied activities in 15 major states have been used and classified into two periods — pre- and post-reforms. For analysis, the compound growth rate and correlation techniques were used and the total period was divided into two sub-periods — pre- and post-reforms. The study has revealed that the growth rate of all crops, except tur, declined in the post-reform period compared to the pre-reform period. At all-India level, the share of agriculture and allied activities in total budgetary allocation and in GDP had declined drastically to 6.36 per cent and 1.70 per cent, respectively in 2000–01 compared to the 7.55 per cent and 2.1 per cent in 1990–91. However, from 2005–06 onwards, the allocation has been rising. The study has revealed a declining trend in capital expenditure on agriculture in major states. Hence, there is an urgent need for more budgetary allocations to the agricultural sector. Special priority should be accorded to agricultural research and education to further enhance the yield of major crops and to attain sustainable development in these states.