Both input-oriented and output-oriented models are estimated under the assumption
of variable returns to scale. The estimates on slack inputs are computed to identify
the inputs whose utilisation can be improved to enhance the overall efficiency.
3 Public Expenditure on Irrigation and Capital Intensity
This section analyses the temporal and spatial trends in public expenditure on
agriculture and irrigation. On an average, 25% of total expenditure was allocated to
irrigation and flood control followed by agriculture and allied activities at 19.2%.
Although the amount spent on these heads has more than doubled during the 2000s,
it is alarming to notice that the share of agriculture, irrigation–flood control in total
expenditure has fallen substantially. It could be due to low growth in capital expenditure (investment) for irrigation schemes and agriculture and, increase in the
revenue expenditure which is on day-to-day expenses and on farm subsidies.
Table 1 and Fig. 1 reveal public expenditure on agriculture, and allied activities
has increased from Rs. 141 billion in triennium ending (TE) 1983–84 to Rs.
852 billion in TE 2015–16 growing at an annual rate of 4.92% at 2011–12 prices. In
contrast, irrigation and flood control expenditure has stepped up from Rs. 240 billion in TE 1983–84 to Rs. 738 billion by TE 2015–16 and grew at a modest rate of
3.88% over time. It is also clear that most of the southern states, which are relatively
developed, have taken a lead in allocating more outlays towards both investments
and input subsidies. Taking only capital expenditure (i.e. investment) into consideration, large variations in agriculture and irrigation are visible across the states,
showing a higher annual rate of growth (near 7%) in Andhra Pradesh, Gujarat,
Karnataka, Maharashtra, and Tamil Nadu. The rate of growth has jumped during
the 2000s in almost all to the tune of more than 10%. Three states viz. Haryana,
Punjab, Rajasthan, and Uttar Pradesh continued to lag. The reasons for this are not
merely in financial aspects but also lie in the situation of the states, for example,
Andhra Pradesh, Karnataka, and Maharashtra settled the inter-state disputes on
Krishna in 1979–80, similarly Gujarat could settle Narmada dispute and was then
free to take up the stalled schemes. On the other hand, Haryana and Rajasthan suffer
from supply crunch of water as the water available through Indus system is tightly
allocated, and the additional allocations are under severe disputes. Uttar Pradesh
has a historical advantage of establishing irrigation systems since the last century
and the balance resource uses are difficult to harness in the absence of international
cooperation with the neighbouring countries.
In the face of large inter-state variations in public expenditure on agriculture and
allied activities and irrigation, we estimate the same on per hectare (ha) basis.
Taking all states together, per ha investment in agriculture has increased from Rs.
63 in TE 1983–84 to Rs. 516 in TE 2015–16 (Table 2). Among the states, J&K,
Kerala, Maharashtra, Tamil Nadu, and Uttarakhand have invested more than Rs.
1000 per ha in recent years. In case of irrigation stock (excluding expenditure on
flood control), Table 3 shows that per ha investment has increased from Rs. 14,397
48
S. Bathla et al.
of variable returns to scale. The estimates on slack inputs are computed to identify
the inputs whose utilisation can be improved to enhance the overall efficiency.
3 Public Expenditure on Irrigation and Capital Intensity
This section analyses the temporal and spatial trends in public expenditure on
agriculture and irrigation. On an average, 25% of total expenditure was allocated to
irrigation and flood control followed by agriculture and allied activities at 19.2%.
Although the amount spent on these heads has more than doubled during the 2000s,
it is alarming to notice that the share of agriculture, irrigation–flood control in total
expenditure has fallen substantially. It could be due to low growth in capital expenditure (investment) for irrigation schemes and agriculture and, increase in the
revenue expenditure which is on day-to-day expenses and on farm subsidies.
Table 1 and Fig. 1 reveal public expenditure on agriculture, and allied activities
has increased from Rs. 141 billion in triennium ending (TE) 1983–84 to Rs.
852 billion in TE 2015–16 growing at an annual rate of 4.92% at 2011–12 prices. In
contrast, irrigation and flood control expenditure has stepped up from Rs. 240 billion in TE 1983–84 to Rs. 738 billion by TE 2015–16 and grew at a modest rate of
3.88% over time. It is also clear that most of the southern states, which are relatively
developed, have taken a lead in allocating more outlays towards both investments
and input subsidies. Taking only capital expenditure (i.e. investment) into consideration, large variations in agriculture and irrigation are visible across the states,
showing a higher annual rate of growth (near 7%) in Andhra Pradesh, Gujarat,
Karnataka, Maharashtra, and Tamil Nadu. The rate of growth has jumped during
the 2000s in almost all to the tune of more than 10%. Three states viz. Haryana,
Punjab, Rajasthan, and Uttar Pradesh continued to lag. The reasons for this are not
merely in financial aspects but also lie in the situation of the states, for example,
Andhra Pradesh, Karnataka, and Maharashtra settled the inter-state disputes on
Krishna in 1979–80, similarly Gujarat could settle Narmada dispute and was then
free to take up the stalled schemes. On the other hand, Haryana and Rajasthan suffer
from supply crunch of water as the water available through Indus system is tightly
allocated, and the additional allocations are under severe disputes. Uttar Pradesh
has a historical advantage of establishing irrigation systems since the last century
and the balance resource uses are difficult to harness in the absence of international
cooperation with the neighbouring countries.
In the face of large inter-state variations in public expenditure on agriculture and
allied activities and irrigation, we estimate the same on per hectare (ha) basis.
Taking all states together, per ha investment in agriculture has increased from Rs.
63 in TE 1983–84 to Rs. 516 in TE 2015–16 (Table 2). Among the states, J&K,
Kerala, Maharashtra, Tamil Nadu, and Uttarakhand have invested more than Rs.
1000 per ha in recent years. In case of irrigation stock (excluding expenditure on
flood control), Table 3 shows that per ha investment has increased from Rs. 14,397
48
S. Bathla et al.