Impact of crop production on economic development in West Bengal: An econometric analysis

Abstract

This study investigates the impact of agricultural production on the economic development of West Bengal by analysing the relationship between rice, wheat, cereals, pulses and oilseeds production with GDP. Using thirty years annual time series data from 1993 to 2022, we employ descriptive statistics to summarize the key characteristics of each agricultural production variable before conducting further econometric analysis. The unit root tests confirm the stationary properties of the variables, while the Johansen test of co-integration establishes a long run equilibrium relationship among the variables. The results indicate that oilseed and cereal production positively contribute to GDP growth, whereas pulses production has a negative effect on it. The CUSUM test reveals structural instability in the estimated relationship, suggesting shifts in agricultural policy or external economic factors. Additionally, residual diagnostic tests validate the model’s reliability. These findings highlight the significance of crop production in West Bengal’s economic growth and emphasize the need for stable agricultural policies.