Transaction Costs And Benefits From Governmental Programs In India: Developmental Programmes in Karnataka, India

Benefits from developmental programmes to farmers in peri-urban area and rural areas of Bangalore metropolis are analyzed using a sample of 50 farmers each from peri urban (Magadi town)and rural area (Halasabele,Magadi). In rural area holding size is 2.2 acres per farm with a market value of Rs.0.5 -0.7 million per acre and 0.8 acre in peri-urban area with value of Rs.2 million per acre reflecting economic scarcity of land. Rural farm family received benefit of Rs.16, 540 (ranging Rs.3720 to Rs.27989) annually from 7 (ranging 4 to 10) developmental programs incurring transaction cost of Rs.1733 (ranging Rs.865 to Rs.3465) forming 10.47% (ranging 2 to 41 %) of total benefit. Peri–urban farm family received benefit of Rs.8363 (ranging Rs.1726 to Rs.25115) annually from 3(ranging 1 to 9) developmental programs incurring transaction cost of Rs. 796 (ranging Rs. 200 to Rs. 1850) forming 9.5% (ranging of 3 to 44 %) of total benefit. Inequality in distribution of benefits was lower in rural area than urban area. Peri urban farmer exhibited higher economic efficiency compared with rural farmer, even though the developmental benefit received was atleast 50% lower compared to rural farmers.