The Case of India 1 1 7 



Economic Implications 



This evaluation is based on data not available when earlier ap- 

 praisals of the lADP program were made. Also, the evaluation 

 model employed differs in major respects from those utilized 

 earlier. It is not surprising, then, that somewhat different conclu- 

 sions are reached. In contrast to previous evaluations, we find that 

 the lADP program had a large and significant effect on foodgrain 

 yield performance. It induced the adoption of significant in- 

 creases in modern inputs, especially fertilizer, from an already 

 high level to a still higher level. When these increased inputs are 

 "netted out" in the total factor productivity computation, the 

 contribution of the lADP program becomes modest. That is, it did 

 not produce the major increases in production expected of it. In 

 contrast, truly extraordinary gains were attributed to the Indian 

 agricultural research system in the earlier section of this chapter. 



That its contribution to real economic growth was modest rela- 

 tive to the contribution of the Indian agricultural research system 

 is, again, not surprising. The evidence provides support for the 

 hypothesis that the IAD? programs were undertaken in precisely 

 those districts in which the expected contribution of these 

 programs was lowest. That is, districts with relatively low econom- 

 ic slack were chosen. Had the programs been instituted in more 

 "backward" districts, they would have had a much larger im- 

 pact.i"* 



The present evaluation is based on a model in which tech- 

 nological discovery by formal research programs is the key 

 "engine" of growth. Programs such as lADP can reduce econom- 

 ic slack and effect some trading of technology within regions. 

 They can induce experimentation with modern inputs, which is 

 of value in terms of producing skills. They can remove input mar- 

 ket distortions (and they can create distortion through input sub- 

 sidies). They do not discover new technology, however, and their 

 contribution depends heavily on whether technological discovery 

 and diffusion is taking place. We share the perspective of prior 



14. Not all "backward" dislricls have a high degree of economic slack, of 

 course. The existence of slack depends on the discovery of region-specific rele- 

 vant technology and on relatively low investment in slack-reducing activities. 



