Growth and Diversification Patterns in Indian Agriculture: District Level Analysis

Abstract

This paper has examined the growth patterns across districts for different sectors and sub-sectors of agriculture using data on GDP at district levels. It has measured the extent of diversification across districts and has tested if there is convergence across districts. Covering a 13year period from 2001-02 to 2013-14, the study has observed a significant increase in the average GDP level of a district in absolute terms as well as on per capita basis. The growth in livestock GDP per capita seems to have contributed to the growth and stability of the overall agriculture sector. A higher proportion of districts have registered higher growth rates over time. The proportion of resource-poor districts that have registered very high growth rates (12 % and above) is higher than that of better-off districts for GDP from sub-sectors. The shares of livestock and crop production in agricultural GDP have improved over time. There has been a decline in diversification levels over time across sectors as well as within the agriculture sector and the decline is statistically significant too. The better-off districts have shown a significantly higher level of diversification compared to the resource-poor districts. There seems to be beta convergence in GDP from different sectors/sub-sectors. Specifically, industry, agriculture, crop production, livestock and fisheries have shown convergence over time. Given the statistical significance of the intercept terms in all but a few cases, there seems to be conditional beta convergence which requires exploring other factors and interventions that need to be taken to induce convergence.