Through the context of the Punjabi agricultural development experience, this thesis examines the social, political, and economic implications of reforming India's current input subsidization strategy for agricultural developments. I conclude that changes are needed to allow for diversification in Punjab's agricultural sector and larger economy. Environmental, social and economic sustainability were not prioritized at the onset of the green revolution in Punjab and the adverse effects of input subsidies on the state exemplify this fact. Environmental degradation, human health complications, and fiscal deficits are visible in Punjab. Punjab has been the beneficiary of significant public investment funds for agriculture, allowing the state to become a cereal production powerhouse. Recently, however, the economic and agricultural growth enjoyed in Punjab has begun to stagnate, and may potentially be in decline, as continued input subsidization limits incentive for diversification.

The prioritization of the agricultural sector of the economy has led to limited growth in the secondary and tertiary sectors where further diversification could allow for more non-farm employment opportunities. Changes to the state agricultural support structure were limited during the reform period of the 1990's, but a reduction in input subsidies could allow more holistic and equitable rural development in India by shifting government funds toward investment in education, infrastructure, and agricultural research and development. Ultimately, a gradual reduction of input subsidies, coupled with the utilization and enforcement of minimum support prices, could lead to more diversification within the agricultural sector. Agricultural extension services through the Punjab Agricultural University need to be highly engaged in the transitional period to inform farmers of their options for diversification.

The fiscal savings realized through a reduction in input subsidies could allow for government investment in long term growth, improving urban and rural Punjabi livelihoods and could serve as a case study for burgeoning African nations to follow.