Agricultural growth and investments in India : assessment of recent trends, breaks and linkages

This paper reviews the recent trends in agricultural investments (both public and private) and tries to find structural breaks in the trends over the period of 1960-2017. Comparing the growth performance of investments and farm output (GDPAg and production) in various sub-periods based on breakpoints in both investment series the study finds that the recent agricultural stagnation spawns from a low capital formation in Indian agriculture, especially low public investment. This has been further strengthened by the regression results where both public and private investments along with fertilizer consumption, HYV seeds, terms of trade, and weather pattern significantly affect the agricultural output. Therefore, the policy implication of the study calls for an immediate arrest of the declining trend of public investment in order to stimulate more private investment. This may break the shackles of growth stagnation in Indian agriculture.