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The impact of agricultural activities on urbanization: Evidence and implications for India

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  • Tripathi, Sabyasachi
  • Rani, Chetana

Abstract

As a part of the development process, India is currently going through a transformation from agriculture based economy to industry and service lead urbanized economy. However, no formal quantitative research has been done on this phenomenon. In this perspective, based on Matsuyama’s (1992) theoretical framework and using panel data model, the impact of agricultural activities on urbanization in India is analyzed in this paper. For the analysis 15 major agricultural states of India are considered for the period of 1981 to 2015 by sourcing data from mainly Census of India and Ministry of agriculture, government of India. The empirical estimations reveal that the higher share of agriculture in GDP, amount of cultivated land area, and rural male employment in agriculture have had a negative effect on urbanization in India. On the other hand, higher consumption of fertilizer, state government expenditure on agriculture, production of major crops (wheat, maize, jowar, and bajra), rural female employment in agriculture, and rural literacy rate have had a positive impact on urbanization. The results also show that the effect of agriculture productivity is positive on urbanization for a less trade open economy like India. Finally, it is suggested that there is need of higher agricultural development in order to achieve a higher level of urbanization in India. For this purpose use of technology in agriculture sector along with higher level rural education is required. Finally, we need to have balanced rural and urban policy for a smooth rural- urban transformation in India.

Suggested Citation

  • Tripathi, Sabyasachi & Rani, Chetana, 2017. "The impact of agricultural activities on urbanization: Evidence and implications for India," MPRA Paper 76213, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:76213
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    Cited by:

    1. Sabyasachi Tripathi, 2019. "Do economic reforms promote urbanization in India?," Asia-Pacific Journal of Regional Science, Springer, vol. 3(3), pages 647-674, October.
    2. Nina Liu & Shuqi Wang & Fei Su & Jun Ye, 2022. "Research on Coupling Coordination of China’s New-Type Urbanization and Urban Resilience—Taking Yangtze River Economic Belt as an Example," Sustainability, MDPI, vol. 15(1), pages 1-25, December.
    3. Arindam Paul & Dukhabandhu Sahoo & Amrita Jena, 2023. "Asymmetric impacts of ICT and energy intensity on agricultural productivity: Evidence from Asia‐Pacific region," Review of Development Economics, Wiley Blackwell, vol. 27(3), pages 1537-1561, August.
    4. Lan, Yueqin & Krishnan, Deepika & Zheng, Jiyuan, 2023. "Impact of international trade on crude oil in political unstable economies: Evidence from quantile regression," Resources Policy, Elsevier, vol. 83(C).

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    More about this item

    Keywords

    Agriculture activity; Urbanization; India;
    All these keywords.

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q10 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - General
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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