In our previous post, we explored the financial and technical investments governments need to make to develop their agricultural industries. India has made strides in increasing the budget for agricultural investments each year. The government has introduced numerous schemes for agricultural investments in its Five-year plans. However, the government’s large public spending, mostly in the form of subsidies and partly in agricultural related R&D, have not reaped results of the same magnitude as the investments.
In the fiscal year 2014, INR 7.3 lakh crores was disbursed as credit to farmers. 2015 saw an increase to INR 9 lakh crores. In the new budget announced on February 2017, this number has been further hiked to INR 10 lakh crores. India also has the second highest spending on agricultural related R&D by a developing country, second only to China. But such enormous allocations to the sector have not yielded returns of the same magnitude.