Impact of Agricultural Inputs on Gross Value Added by Agriculture in Indian Economy

 

Sukhdeep Singh1*, Jatinder Sachdeva1 and Sangeet Ranguwal1

1    Department of Economics and Sociology, Punjab Agricultural University, Ludhiana-141 004, India

*Corresponding author Email: sukhbuttar94@gmail.com; sachdeva8@pau.edu; sangeet@pau.edu

Volume 18-(2), 2025   ;  https://doi.org/10.58297/LKMQ9208   Click here for Pdf

Received: 15th August, 2025; Accepted: 12th October, 2025
 
Abstract

This study analyses secondary data for 2011-12 to 2022-23 to quantify the role of agricultural inputs in India’s productivity and economic growth. Our objective is to assess how variability in input use particularly fertilizers, pesticides, irrigation, and seeds affects agricultural gross value added (GVA) and production stability. using a combination of variability metrics and ridge regression. We document substantial variability in fertilizer and pesticide consumption relative to irrigation and seeds availability, indicating higher production risk associated with fluctuations in these inputs. The Instability Index shows that fertilizer and pesticide use are the main sources of input-related volatility, whereas irrigation and seeds availability exhibit comparatively greater stability. Ridge regression results indicate that irrigation (β = 0.22, p < 0.05) positively influence agricultural GVA, with quality seeds availability also contributing (β = 0.05, p < 0.1) to GVA by crops. These estimates support the view that expanding and stabilizing core inputs can enhance output, while input variability poses a material constraint. To promote sustainable growth, the focus should be on improving input use efficiency through precision agriculture, stabilizing critical inputs (notably irrigation), and implementing risk management strategies. Integrated input subsidies, increased R&D via PPP arrangements, and targeted farmer education can mitigate volatility and strengthen producer resilience, contributing to more stable agricultural growth and economic performance.

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