State budgetary support to agriculture plays an important role in its development. The nature and magnitude of budgetary support influences the technical progress to a large extent. Needless to say, that the higher level of expenditure lays the foundation for higher rate of growth. Given the critical importance of agriculture to the Indian economy, capital assumes added importance. As the potential for further increases in crop area is nearly exhausted, the future growth of agriculture need to be yield based. The latter requires large investment in creating and maintaining productive assets like irrigation and rural infrastructure as well as in promoting growth agents like agricultural research, education and extension.