AN EMPIRICAL STUDY ON PUBLIC AND PRIVATE CAPITAL FORMATION IN THE AGRICULTURAL SECTOR OF INDIA

Indian agricultural sector plays a crucial role in country's economic growth, employment generation, and exports. Globally, India holds the second largest land holdings. Although, both public and private capital formations have risen manifold, the contribution in country's GDP is still hovering around 3 percent. The present study aims to empirically examine the impact of both public and private investments on the growth of agricultural sector by using Autoregressive Distributed Lag model (ARDL). The study reveals that private investment in the agriculture sector has increased drastically in the post reform period. The study found no cointegration between both public and private capital formations on agriculture growth however, the lagged values of agricultural share in country's GVA as well as lagged values of private investment positively and significantly impacts agricultural growth while public investment shows insignificant in influencing agricultural growth. The study suggest that government should increase public investment in major projects so as to endorse more private investment in the agricultural sector which will further raise the agricultural productivity and sustainability.