The declining contribution of agriculture to state GDP of Karnataka, combined with stagnation in productivity and no drastic reduction in agriculture-dependent workforce clearly point to the need of revival of this sector. This paper has examined the long-term relationship between rural infrastructure and agricultural productivity growth in Karnataka during 1980–81 and 2009–10 employing error correction method. Both the availability and utilization indices of infrastructure were combined using the equal correlations method to arrive at the individual infrastructural indices such as transport, telecommunication, market, credit, and education indices. The results of vector error correction model have indicated that market infrastructure has a positive and significant effect on TFP in agriculture in the long-run. The study has revealed that transportation infrastructure has a positive impact on productivity. In fact, except education, all other rural infrastructures had a positive and significant effect on productivity growth in the long-run. The importance of rural infrastructure lies in its ability to promote long-term agricultural growth. However, the existence of complementarity between rural infrastructures may have implications for the required growth benefits.
Agricultural productivity growth, infrastructure, error correction model, rural development, Karnataka
