Farm Sector Investment To Miss Target

Expressing concern over the unabated downtrend in investment in agriculture, the Economic Survey has pointed out that the Eighth Plan target of earmarking at least 18.7 per cent of the total investment to this sector could not be achieved. "The investment could at best reach only 11 per cent," it says.

The growth rate in overall agricultural investment (public and private), in fact, rose only for a brief period following the green revolution (in early 1970s) and has since been on the decline. The survey describes this as a "worrying aspect" and points out that the government's role is important not only for raising public investment but also inducing private investment for boosting farm development.

The private investment, however, has displayed some buoyancy in recent years. It has risen from Rs 3,440 crore (at 1980-81 prices) in 1990-91 to Rs 5,867 crore in 1996-97. It was Rs 2,840 crore in 1980-81.

"The rising trend in private investment perhaps reflects the improved incentives for agriculture, especially arising from favourable changes in the trade policy", the Survey says.

Referring to the public investment, the survey reveals that the uptrend of the 1970s was reversed in the 1980s and has continued to be so since then. Public investment in real terms at 1980-81 prices was Rs 1,796 crore in 1980-81 but declined to Rs 1,002 crore in 1991-92. It again showed a slight rise between 1992-93 and 1994-95 but declined again to Rs 1,268 crore in 1995-96 and further down to Rs 1,132 crore in 1996-97.

The decline in public investment is attributed to diversion of resources from investment to current expenditure. A large portion of public expenditure on agriculture in recent years went into current expenditure in the form of increased output and input subsidies.

The investment on irrigation has fallen short of targets in the 8th plan despite efforts to reverse the trend by introducing accelerated irrigation benefit programme, the Survey points out.