Impact of Public Sector Capital Investment in Punjab Agriculture

For changing the status of agriculture from subsistence level to business level, adequate infusion of capital is utmost important like spine in the body. The main objectives of the present study are to study the trend and pattern of capital formation in agriculture in Punjab, to examine the share of capital formation in agriculture and allied sector in the Gross Capital Formation in Punjab, its share in the Gross Domestic Product of the State, to analyse the share of Gross Domestic Product of agriculture to Gross Domestic Product of the State. Capital formation unveils the potentiality of the investment in the public as well as the private sectors and gives net addition to the assets created. The study is based on secondary sources. The different statistical tools, tables, averages and percentages, index numbers are used for the analysis. The period of study is 1980–81 to 2013–14 at 2004–05 constant prices. It is observed that the agriculture and allied sector are contributing less to total gross capital formation as compared to non-agriculture sectors. Share of agriculture sector has decreased, gradually, in the growth rate of the economy. Public sector capital formation in agriculture and allied sectors has come down whereas that of private sector has gone up. Some of the policy implications arising out of this research study are: Diverting resources from subsidies to public sector capital formation. A big push of public investment in agricultural sector is required.