Public expenditure, subsidy and growth in agriculture: A case study of Rajasthan

The study examined the trade-off between subsidy and public expenditure in agriculture, and compares the effectiveness of agriculture subsidy with that of agriculture expenditure on agriculture growth in Rajasthan. The study used time series data from 2005-06 to 2018-19. Our findings reveal that agriculture subsidy and public expenditure in agriculture do not have any trade-off. Moreover, public expenditure in agriculture is more effective than subsidies in accelerating agriculture growth. The subsidy did not have significant influence, but agriculture investment have positive influence on agriculture GSDP, which implies that public expenditure is more effective than subsidies in Indian agriculture. Therefore, it is suggested to the government to gradually convert subsidies into agriculture investment for sustainable and efficient growth of agriculture.