This book provides a blueprint for the allocation of public expenditures "in" and "for" agriculture at the dis-aggregated state level and suggests a reorientation in favour of disadvantaged regions where the marginal returns on additional investments would be higher. It provides insights into the inter-linkages between public expenditures, private investment, rural poverty, and agriculture productivity from a regional perspective to reflect upon spatial differences in the welfare effects of various investments, subsidies, and policies. The book focuses on agricultural growth and rural poverty reduction through public and private investments, non-farm employment, and other pathways to the formulation of appropriate policies at the dis-aggregated state level. It presents new evidence based on advanced econometric tools for analysing and understanding the relationship between public and private investments in agriculture and input subsidies (fertilizer, power, irrigation, and credit) together with their impacts at the dis-aggregated state level. The book also deliberates on an income based direct support system for farmers as an alternative to the existing input price subsidy regime. Accordingly, the book offers valuable insights not only for researchers working on poverty alleviation, rural economy, and agricultural growth, but also for policymakers.

Seema Bathla is a Professor, CSRD, JNU, New Delhi. Before joining the JNU, she worked at the Institute of Economic Growth, The Energy Research Institute and Delhi University. She obtained her M.Phil. from Delhi School of Economics and her Ph.D. from the JNU. She has 27 years of work experience and has published four books (three co-authored) and more than 45 research articles in refereed national and international journals. With a keen interest in agricultural issues, she has conducted several studies and undertaken assignments for the World Bank, IFPRI, UNCTAD, WWF-India, and IASRI. She was conferred the Jawaharlal Nehru Award for Outstanding Postgraduate Agricultural Research by the Indian Council of Agriculture Research, New Delhi, in 2008. She is also the recipient of the Dr. R.T. Doshi award for best paper published in Agricultural Economics Research Review in 2014 and 2015, and the Dr. A K Sen award for the best book published in 2018.

Pramod K. Joshi is a former Director for South Asia at the International Food Policy Research Institute, New Delhi. He has also served as Director of the National Academy of Agricultural Research Management, Hyderabad, India; Director of the National Centre for Agricultural Economics and Policy Research, New Delhi; South Asia Coordinator at the International Food Policy Research Institute; and a Senior Economist at the International Crops Research Institute for the Semi-Arid Tropics in Patancheru. His research areas include technology policy, market, and institutional economics.

Anjani Kumar is a Research Fellow at the International Food Policy Research Institute, New Delhi. Before joining the IFPRI, he was a Principal Scientist (Agricultural Economics) at the International Crops Research Institute for the Semi-Arid Tropics, Hyderabad. He has also served as a Principal Scientist at the National Centre for Agricultural Economics and Policy Research, New Delhi; a Senior Agricultural Economist at the Asia Office of the International Livestock Research Institute, Nairobi; and a Consultant for a number of national and international institutions including the FAO, World Bank, IFPRI, National Agricultural Cooperative Marketing Federation of India (NAFED), and the Department of Science and Technology (DST), Government of India. Having written over 70 research papers and more than 50 book chapters, he is a Fellow of the National Academy of Agricultural Sciences of India and has won numerous national and international awards.

This book provides a blueprint for the allocation of public expenditures in and for agriculture at the dis-aggregated state level and suggests a reorientation in favour of disadvantaged regions where the marginal returns on additional investments would be higher. It provides insights into the inter-linkages between public expenditures, private investment, rural poverty, and agriculture productivity from a regional perspective to reflect upon spatial differences in the welfare effects of various investments, subsidies, and policies. The book focuses on agricultural growth and rural poverty reduction through public and private investments, non-farm employment, and other pathways to the formulation of appropriate policies at the dis-aggregated state level. It presents new evidence based on advanced econometric tools for analysing and understanding the relationship between public and private investments in agriculture and input subsidies (fertilizer, power, irrigation, and credit) together with their impacts at the dis-aggregated state level. The book also deliberates on  an income based direct support system for farmers as an alternative to the existing input price subsidy regime.  Accordingly, the book offers valuable insights not only for researchers working on poverty alleviation, rural economy, and agricultural growth, but also for policymakers.

Chapter I Agricultural Growth and Poverty Reduction through Public Investment

 I.1 Introduction

I.2 Regional Impacts of Public Expenditure

I.3 Key Questions

I.4 Chapter Scheme

Chapter II Contextualising Public Intervention in Agriculture and Welfare Effects

 II.1 Rationale

II.2 Welfare Effects of Public SpendingA Conceptual Framework

Chapter III Spatial Patterns in Public Expenditure, Subsidies and Outcomes

III.1 Trends in Public Expenditure and Share of Economic and Social Services

III.2 Investments in Agriculture and Irrigation

III.3 Magnitude of Input Subsidies in Agriculture

III.4 Public Spending Outcomes

III.5 Summing Up

Chapter IV Size of Private Investment and its Relationship with Public Investment and Input 

                    Subsidies

IV.1 Introduction

IV.2 Database and Methodological Approach

IV.3 Structure and Trends in Fixed Capital Expenditure

IV.4 Results from Econometric Analysis

IV.5 Summary and Conclusions

Chapter V Welfare Effects of Public and Private Investments and Input Subsidies

V.1 Main Hypotheses and Model Estimation

V.2 Income and Poverty Effects of Public Spending

V.3 Marginal Returns to Agricultural Income and Rural Poverty Reduction

Chapter VI Major Findings and Way Forward

VI.1 Key Results and Policy Implications

VI.2 Interventions in Input Subsidy Regime