Impact of agricultural mechanization on farmer's income and productivity in rural India: An empirical study

Abstract India's economy depends heavily on agriculture, and mechanisation has greatly increased production, decreased the need for labour, and raised farmers' incomes. In addition to outlining implementation issues, this study examines how agricultural mechanisation affects farmers' production and revenue. The study evaluates the relationship between fertiliser usage and productivity against mechanisation outcomes like tractor sales using secondary data from government reports and research and the Two-Stage Least Squares (2SLS) regression technique with irrigation as an instrumental variable. The results show that although there is a positive correlation between tractor sales and fertiliser use and agricultural production, these relationships are not statistically significant. Although results are limited by a short sample size and possible missing factors, the model explains a considerable variance (R2 = 0.41). Although there is no Heteroskedasticity, diagnostic tests indicate inadequate instrument validity and potential autocorrelation. In the end, the study indicates that mechanisation could greatly increase productivity and income if combined with better credit availability, the growth of Custom Hiring Centers, improved extension services, and customised regional mechanisation strategies, even though it has a positive but weak statistical impact on agricultural outcomes. In general, strong institutional and infrastructure support is necessary for agricultural mechanisation to be effective.