Capital expenditure in agriculture

Consider this from the highlights of Union budget 08-09:

- Debt waiver of Rs 60,000 cr (later increased to a larger amount)

- Credit target of Rs 280,000 cr

- Investments of Rs 20,000 cr for irrigation

- Crop insurance scheme to be introduced

- Rural infrastructure spending of Rs 14,000 cr

- Planned spending of Rs 240,000 Cr. Unplanned spending of Rs 5o7, 000 Cr

Farm subsidies and debt waiver serve no purpose in long term and hence does not count.

We can assume that improvement in rural infrastructure will help farmers in some way and so it is actually agricultural capex. The proportion of capex in agriculture to total spending comes to around ((20,000 + 14,000)/(240000+507000)) = ~4.55%

So that is 4.55 percent for more that 50% of people sustaining on agriculture. And god knows knows how much of it will actually go down till implementation.

This amount may be smaller than capex of some of our large companies.