INTRODUCTION:

The motive of this research work is to statistically analyze the expenditure scenario of agriculture sector in the state of Chhattisgarh. Chhattisgarh came into existence in the year 2000 in month of November. The state separated from Madhya Pradesh which was at that time part of BIMARU cluster. Hence the state has to unwillingly start operating under its shadow and had to stride rigorously to overcome the shadow of being separated from the BIMARU cluster. Apart from the stated problem the state constantly faces problem of red corridor which slows down the progress of state’s economy.

Chhattisgarh if had to overcome these problems, an extensive action plan was needed and significant expenditure was needed to be incurred by the government under various heads (CBGA, 2011). Agriculture sector, the most important sector and being the backbone of states economy was needed to be strengthen first to boost the overall development of the newly formed stated.

Government incurred tremendous expenses over the year on the agriculture sector. These expenses changed the picture of the state’s agriculture practices to significant extent.

The expenses incurred on agriculture and other sector now needs to be statistically analyzed to understand the trends and patterns of spending, what are the remaining loop holes that can be addressed and what more can be done to improve the sector. Agriculture practices in India has always a clear reflection on performance of other sectors(Kaur and Kaur, 2014). If agriculture and allied sector performs well so are the chances of performing well of other sectors and vice versa. The motive of understanding this expenditure statistic also include the fact that the structure of the agriculture and rural economy is changing fast. The expenditure that was earlier incurred for grains is now also focused on horticulture and animal husbandry(Jyotsna, Ghosh, Ghosh, and Meitei, 2013). Secondly the pattern of land use is mutating fast. Thirdly the agriculture and allied activities have taken a form of private sector, NGO’s and producing groups, rather than limited to earlier concept of individual farmer. Hence decision making structure is changing. As these factors are sources of growth in the agriculture and allied sector, it demands for a proportionate increase in expenditure for the sector.

Recent trends in investment growth in agriculture:

Concerned voices raised during the late eighties and early nineties about the constant decline of public sector capital expenditure in Indian agriculture sector(Sonwani and Bharadwaj, 2014). Their argument was based on the point that this decline was not only detrimental in itself but it is also leading to decline of private investment in agriculture sectors. As the concerned voices sounded more in unison government investments grew and so grew the private investment thus boosting the agriculture practices of the country.

Looking into the trends that private investment had positive correlation with public investments the government decided to spend in allied agricultural practices as well. The investments under this were to be made considering that these allied practices are integral part of classical agriculture. Following the investment,the sector witnessed a significant rise and so is the economic condition of rural areas of India(Mishra, Bindal, and Joshi, 2015). Thus agriculture become a rewarding commercial venture.

Understanding public expenditure:

Public expenditure refers to the expenditure incurred by the state Government or Central Government on its functional administration(Motes, 2008). The activities under which public expenditure is incurred includes activities that bring economic development. These activities can be classified as

1. Activities of trade and commerce

2. Activities of rural development

3. Development of agriculture and allied practices sector

4. Providing social facilities such as roads and railways

5. Ensuring equitable distribution of income

Public expenditure can be divided into capital expenditure and revenue expenditure. Capital expenditure refers to the expenditure incurred by the government which results in creation of fixed assets.Capital expenditure is also known as development expenditure as it increases the productive capacity of the economy of the state or nation. In context to agriculture it can be spending on dams, micro and major irrigation facility development etc.

Revenue expenditure is current or consumption expenditure incurred by the government on civil administration, defense, public health, agriculture and functioning of government machinery. Revenue expenditure is of recurrent nature and is incurred by the government year after year.

The present research work will focus upon analysis of theses recurring expenses incurred on agriculture and related sector development. For the analysis revenue expenditure is accounted. Government of Chhattisgarh has exclusive budgeting for development of agriculture, rural region and irrigation under different heads.As these three have combined effect on agriculture economy, it is being considered here that public expenditure on these are part of the expenditure incurred for development of agriculture.

METHODOLOGY:

The data for the research work has been collected from various reports of department of finance of state of Chhattisgarh. The collected data was than analyzed using statistical packages. The growth rate for the expenditure was estimated using compound growth rate model Y=abⁿ, Y is the concerned expenditure, n is the time period. The growth can be calculated from model using the expression b-1.

The state government of Chhattisgarh has divided the agriculture related sectors in different heads, theses different heads are agriculture and related works, rural development and irrigation and flood control. Under agriculture and related works, the subheadsare crop husbandry, conservation of land and water, animal husbandry, fish farming, dairy production, forestry, food storage, agro research and education and cooperatives. Under rural development subheads are rural development special programs, rural employment and other rural development programs. Under irrigation and food control subheads are major and medium irrigation plans, micro irrigation plans and command area development. The revenue heads of expenditure i.e. non-plan and plan expenditure are merged together and has been presented as single total figure in this research.

Table 1 shows the total revenue expenditure incurred on agriculture related works. All the figures are in rupees crore.

From the table 1, it is visible that the Payment for the agriculture and related activities for the year 2001-2002 was 467.37 ,for the year 2002-2003 was 656.91, for the year 2003-2004 it was 1041.06 , for the year 2004-2005 it was 965.56, for the year 2005-2006 it was 989.87, for the year 2006-2007 it was 910.73 , for the year 2007-2008 it was 1438.14, for the year 2008-2009 it was 1672.17, for the year 2009-2010 it was 2327.53, for the year 2010-2011 it was 2590.35, for the year 2011-2012 it was 2266.49.All the values mentioned in the discussion are in Rupees Crore (INR).

Table 1: Expenditure incurred for agriculture and related works in Rs. Crore

Year	Expenditure incurred
2001-02	467.37
2002-03	656.91
2003-04	1041.06
2004-05	965.56
2005-06	989.87
2006-07	910.73
2007-08	1438.14
2008-09	1672.17
2009-10	2327.53
2010-11	2590.35
2011-12	2266.49

Source: Various Reports of Finance Department of State of Chhattisgarh

The figure 1, presented below, shows the compound growth curve fitted for the data. The curve obtained is significant and the growth rate obtained was 17.0%.

Table 2 shows the total revenue expenditure incurred on rural development.

From the table 2, it is visible that the Payment for the Rural Development for the year 2001-2002 was 342.53,for the year 2002-2003 was 311.04, for the year 2003-2004 it was 294.5, for the year 2004-2005 it was 440.58, for the year 2005-2006 it was 577.85, for the year 2006-2007 it was 643.76, for the year 2007-2008 it was 838.85,for the year 2008-2009 it was 872.19, for the year 2009-2010 it was 827.29, for the year 2010-2011 it was 1216.2, for the year 2011-2012 it was 1685.74.All the values mentioned in the discussion are in Rupees Crore (INR).

Table 2: Expenditure incurred for rural development in Rs. Crore

Year	Expenditure incurred
2001-02	342.53
2002-03	311.04
2003-04	294.5
2004-05	440.58
2005-06	577.85
2006-07	643.76
2007-08	838.85
2008-09	872.19
2009-10	827.29
2010-11	1216.2
2011-12	1685.74

Source: Various Reports of Finance Department of State of Chhattisgarh

Table 3, shows the total expenditure, incurred for the purpose of irrigation and flood control.

From the table 3, it is visible that the Payment for the Rural Development forthe year 2001-2002 was 342.53,for the year 2002-2003 was 311.04, for the year 2003-2004 it was 294.5, for the year 2004-2005 it was 440.58, for the year 2005-2006 it was 577.85, for the year 2006-2007 it was 643.76, for the year 2007-2008 it was 838.85,for the year 2008-2009 it was 872.19, for the year 2009-2010 it was 827.29, for the year 2010-2011 it was 1216.2, for the year 2011-2012 it was 1685.74.All the values mentioned in the discussion are in Rupees Crores (INR).

Table 3: Expenditure incurred for irrigation and flood control in Rs. Crore

Year	Expenditure incurred
2001-02	84.35
2002-03	158.82
2003-04	132.61
2004-05	120.51
2005-06	122.99
2006-07	136.24
2007-08	148.81
2008-09	192.24
2009-10	298.25
2010-11	288.27
2011-12	362.47

Source: Various Reports of Finance Department of State of Chhattisgarh

Observing the growth trend it can be said that the government is increasing the public expenditure on heads under consideration each year. The growth rate obtained is also healthy. However, the total expenditure incurred by the government (including agriculture) is also increasing and can be seen in table 4, its associated growth curve is presented in figure 4. The expenditure incurred by government for agriculture development is increasing or not as a part of total expenditure will be clear once the ratio of expenditure incurred under concerned head to total expenditure incurred is calculated.

The figure 4, shows the curve obtained for total expenditure incurred by the government. The model obtained is significant and the growth rate obtained was 17%.

Table 4: Expenditure incurred for agriculture and non-agriculture purposes (total) in Rs. Crore

Year	Expenditure incurred
2001-02	4914.12
2002-03	5530
2003-04	6600
2004-05	7103.04
2005-06	7457.14
2006-07	8802.44
2007-08	10839.85
2008-09	13793.7
2009-10	17265.43
2010-11	19355.75
2011-12	22628.04

Source: Various Reports of Finance Department of State of Chhattisgarh

Table 5, shows the ratio of total expenditure incurred on agriculture practices i.e. sum of expenditure incurred for agriculture and related work, rural development and irrigation and flood control to total expenditure incurred by state government i.e. sum of agriculture expenditure and non-agriculture expenditures.

Table 5: Ratio of Expenditure incurred on agriculture practices (Sum of quantities of table 1,2 and 3) to total incurred expenditure by the state

Year	Ratio	% Percentage
2001-02	0.181975613	18.19756131
2002-03	0.203755877	20.3755877
2003-04	0.22245	22.245
2004-05	0.214929101	21.49291008
2005-06	0.22672365	22.67236501
2006-07	0.192075152	19.20751519
2007-08	0.223785384	22.37853845
2008-09	0.198394919	19.83949194
2009-10	0.199999073	19.99990733
2010-11	0.211555739	21.15557393
2011-12	0.190679352	19.06793518

Source: Calculated

From the table 5 it can be seen that the ratio is a fluctuating one. The spending on agriculture was initially 18.9% of total spending. The trend on spendingon agriculture than showed a positive growth trend and the spending raised to 20.37% of total spending, 22.24% in 2003-04 and 21.49% in 2004-05. The year of 2009 was the year when India witnessed monsoon failure and Chhattisgarh was no exception.This is easily reflected in the expenditure, the expenditure for year 2008-09 and 2009-10 remained almost stagnant with 19.83% and 19.99% of total spending. The figure 5 further presents a clear picture of the trend in the portion of expenditure spent on agriculture practices from the total expenditure incurred by the state. The figure shows that the trend-line fitted on to the data has a negative slope (m = -0.0003). This indicates that the portion of expenditure spent on agriculture practices from the total expenditure budget is following a reducing trend. The trend observed is formidable.

CONCLUSION:

From the analysis and presented compound growth curves it can be seen that the spending on individual heads has been increased. The sectors considered in this research i.e. agriculture and related work, rural development and irrigation and flood control witnessed positive growth rate, this positive growth rate observed is due to the fact that the spending on these sectors is increased overtime. The positive compound growth is an indicator that there was no expenditure cut in terms of monetary value was introduced in the expenditures on the heads under consideration. It might seem that the expenditure incurred in these sectors has been increased, it cannot be neglected that the expenditures on other heads other than agriculture has also increased. Hence a ratio analysis was conducted for determining the real portion of expenditure that has been incurred on the agriculture practices over the year. It was found that expenditure increased initially and then it fluctuated with certain dips and rises for the rest of the time period. Interestingly it should be highlighted that the expenditure portion on agriculture practice for 2008-09 to 2009-10 remained almost stagnant despite of monsoon failure of 2009.

In light of above stated analysis outcomes, it can be stated that there is a need of overall increase in portion of expenditure incurred on agriculture because the size of agriculture industry is growing and hence it demand is also growing, hence to sustain the industry the portion of expenditure is needed to be increased. Secondly it is clear that Indian economy is agriculture department and Indian agriculture is gamble on rains. If monsoon failure takes place, huge impact of it will be reflected in agriculture sector and disturbance in agriculture sector affects every major sector in Indian economy. The GSDP of state remained almost stagnant for year 2008-09 and 2009-10 due to the above reason. Hence whenever situation of such extremes occur the funds should be divertedtowards agriculture sector from other less important sectors (e.g. social and welfare schemes for subsidized pilgrimage).

The negative trend in portion of expenditure incurred on agriculture-practices is a matter of concern. Diminishing portion from total expenditure incurred towards agriculture sector will render the agriculture sector malnourished. This will in turn severely inhibit the growth of agro sector in the state. As a consequence of this industries that depend heavy on agro produced goods such as sugar and oil industry, textile industry, paint and emulsion processing, food processing and packaging industry will suffer, thus directly deaccelerating the growth of state’s GSDP. Hence there is an immediate need of increasing the expenditure budgeting for the agriculture sector.

REFERENCES:

CBGA. (2011). Chhattisgarh Tracking Public Investments for Children. New Delhi: Unicef.

Jyotsna, N., Ghosh, M., Ghosh, C., and Meitei, W. (2013). Effect of Ciofertilizer on Growth, Productivity, Quality and Economics of Rainfed Organic Ginger (Zingiber officinale Rosc.) Bhaisey cv. in North -Eastern Region of India. Journal of Agriculture Science and Technology, 3(1), 83-98.

Kaur, A., and Kaur, G. (2014). Organic Farming for Sustainable Agriculture: Global and Indian Perspective. Global Journal for Research Analysis, 3(2), 57-59.

Lindsay, A. K., and Kongolo, M. (2014). Rural roads and agriculture development in Swaziland. J Hum Ecol, 431-438.

Mishra, K., Bindal, K. K., and Joshi, V. K. (2015). Analysis of Impact of Electricity Production on Economic Development of the State of Chhattisgarh. IJER, 12(1), 239-246.

Motes, W. (2008). Modern Agriculture and Its Benefits - Trends, Implications and Outlook. Newyork: Global Harvest intiative.

Sonwani, F. K., and Bharadwaj, J. L. (2014). Poor public expenditure on health in credible Chhattisgarh and shining India. International Journal of Social Science and Humanities Research, 50-58.

Received on 01.04.2016 Modified on 15.04.2016

Int. J. Rev. and Res. Social Sci. 4(2): April - June, 2016; Page 42-47