The decline in the rate of growth of Indian agriculture in recent years is in large measure due to the low public expenditure priorities accorded to it in the budgets of the Union and State governments. Since the early 1990s in particular, inadequacy of capital formation has been a major factor contributing to the slackened pace of technological change and infrastructural development in Indian agriculture, with adverse consequences for agricultural productivity and output. Our attempt in this article is to look at the trends and patterns of public expenditure, and the priority accorded to India’s rural economy, in different budgets over the years. The core issues we examine here are: trends in the level of public expenditure on the rural economy since the 1950s; the composition and priority of such expenditure under major heads; and a comparative analysis of public expenditure across States since the early 1990s.

Expenditure on Rural Economy in India’s Budgets since 1950s: An Assessment