Public Fixed Capital Formation in Indian Agriculture: Revisiting the Intellection

Abstract

What constitutes public GFCF in agriculture has emerged as a major methodological controversy among researchers. Though it has been repeatedly pointed out that there is a need for reconceptualization of agricultural capital formation, a real framework was suggested by the Bhattacharya Committee in 2003. The present paper constructed an alternative series for public GFCF in Indian agriculture, which accounts not only for direct, but indirect GFCF as well. The series constructed at the all-India level was also compared with the conventional CSO series. Broadening of public GFCF series for agriculture reflected an altogether different picture as compared to the CSO series. Among the other sectors of the economy, transportation heads such as rural roads and railways were found to have a dominant contribution towards total public GFCF in Indian agriculture. It was also observed that manufacturing heads in general, and agricultural machinery industry, in particular, experienced a declining share overtime in total public GFCF in the agricultural sector.