The European Journal of Development Research

, Volume 31, Issue 5, pp 1197–1226 | Cite as

Targeting Agricultural Investments and Input Subsidies in Low-Income Lagging Regions of India

  • Seema Bathla
  • Pramod K. Joshi
  • Anjani KumarEmail author
Original Article


Poverty in India has been declining consistently over the years, yet it is home to 172 million poor people. Most of India’s poor are concentrated in rural areas and are dependent on agriculture. This poses a serious challenge to the exploration of potential pathways that could effectively eradicate poverty and accomplish the United Nations Sustainable Development Goals. We estimate the effects of various types of investment in rural areas in accelerating agricultural productivity and reducing rural poverty, and find differential impacts of investments and subsidies across low-, middle-, and high-income states. Private investment in minor irrigation, public investments in agricultural research and development, and subsidies on irrigation and electricity have the highest marginal returns in low-income states. Further, the payoffs from additional spending in promoting agricultural income are also higher in low-income states, suggesting targeting these locations with strategic investments and subsidies to improve agricultural productivity and reduce poverty.


Rural poverty Agriculture productivity Public expenditure Input subsidies Private investment Marginal returns 



We are grateful to the Indian Council of Agricultural Research (ICAR), for extending financial support to undertake this study as part of ICAR-IFPRI workplan. We express our sincere thanks to Dr Trilochan Mohapatra, Secretary, DARE and Director General, ICAR and Dr Shenggen Fan, Director General, IFPRI for their constant support and encouragement during this study. We acknowledge the valuable suggestions received from Dr. Madhur Gautam, Dr. Himanshu and Dr. Indira Rajaraman, on an earlier version of the paper.

Compliance with Ethical Standards

Conflict of Interest

We do not have any conflicts of interest.


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Copyright information

© European Association of Development Research and Training Institutes (EADI) 2019

Authors and Affiliations

  1. 1.Centre for the Study of Regional DevelopmentJawaharlal Nehru UniversityNew DelhiIndia
  2. 2.International Food Policy Research Institute (IFPRI)New DelhiIndia

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