Declining Public Investment in Indian Agriculture after Economic Reforms: An Interstate analysis

This paper deals with the analysis of trends in investment in Indian agriculture, with specific emphasis on the period of economic reforms. Analysis of investment series has confirmed deceleration in public investment both at national and state level after the 1980s. The falling public investment in agriculture was mainly because of a large proportion of the resource flows to the agriculture sector going in to current expenditure on subsidies for fertilizers, irrigation, electricity, credit and other agricultural inputs, rather than investment. The reform process in India significantly weakened the structural support through declining public investment “in ”agriculture as well as “for ”agriculture. The expansion of rural credit was arrested and informal sector again trapped the poor farmers. Over the period of economic reform, agricultural growth rates slowed down significantly. The spate of farmers ’suicides reported from some states reflects the distress condition of agriculture after 1991. A reversal of neo-liberal policies in agriculture has become absolutely essential to revive the livelihood systems of rural households in India.