ABSTRACT

Disparity in agricultural is highly influenced by public investment as it affects agricultural productivity to a large extent. Therefore a state wise analysis of the link between the public investment in agriculture and agricultural productivity is highly important. It helps in understanding the disparity at state level. The paper targets to analyze the trends in public investment and food grain production across Indian states. It also estimates the effect of public investment on food grain production in selected Indian states. This study covers time period from 1974 to 2005. We found that the states initially have high food grain productivity are remaining above the national average throughout the period and those states which had lower food grain productivity as compared to the national average initially remain below the national level all over the period. Empirical tests that we have conducted show that there is no significant relation between public investment and agricultural productivity in India, so the theoretical framework that suggests the positive relation between the two is really ambiguous.

Key words: agricultural productivity; public investment.