Agriculture refers to the science, art or practice of cultivating the soil and growing crops. Government spending and institutional credit are the most important factors that engender agricultural innovation and rural income security for over 50% of India’s population who derive their livelihood directly from farming. This paper assesses the role of agricultural expenditure by the government, access to formal credit and its role in supporting livelihood in agricultural regions. Government consumption includes outlays on infrastructure, subsidies, and financial programs to enhance gains realized from agricultural production. Institutional credit on the other hand, comprises the formal sources of funds including bank credit, cooperative credit and microfinance made available to farmers for purchase of necessary inputs and as hedge to output risk. This study, therefore, adopts a secondary data research strategy supplemented by case studies to establish the impact of these financial tools on the stability and income of farming households. These findings thus reveal the major challenges facing extension of government policies and of credit schemes, with a large number of such S&MF remaining outside the coverage. The study also highlights the influential parameters like spatial distribution, financial literacy and institutional mechanisms that intervene with the relationship between government spending, credit availability and sustenance. The study also finds a strong correlation between government expenditure, income and farmer suicides, where ceteris paribus, 8.788 unit decrease in government spending leads to one unit increase in farmer suicides and ceteris paribus, 9.517 unit increase in government spending leads to one unit increase in income. Therefore, with these findings the paper provides policy implications on resource management in delivering credit and rural employment for betterment of the people and sustainability of agriculture in the overall context of India.
Keywords: Agricultural & Institutional credit, Farmer Suicides, Livelihood Security, Rural Development, Poverty Reduction, Government Expenditure.
Citation: Bhat, et al., (2026). Government Expenditure in Agriculture in relation to Institutional Credit and Livelihood Security in Indian Context. J N food sci tech, 7(1):1-10. DOI : https://doi.org/10.47485/2834-7854.1053