With the aspiration of Viksit Bharat, the Union Budget for FY
2025-26 aims to revitalize India's agricultural and allied sectors by
addressing key structural challenges and introducing targeted reforms. This
budget prioritizes increasing access to affordable credit, expanding crop
insurance, promoting Agri-value chains and achieving balanced regional
development with the allocation of whopping ?1.52 trillion. One of the major
highlights of the budget is the increase in the limit of subsidized farm loans
from ?3 lakh to ?5 lakh per farmer, a move aimed at broadening financial
inclusion and supporting farm families. Additionally, the government has set an
ambitious target of achieving atmanirbharta
(self-sufficiency) in pulses by 2030. Further, budget allocated ?109 billion in
incentives for food processing to drive value addition. The fisheries sector
has also received a boost with a five-year investment plan of $9 billion to
enhance infrastructure and productivity. The government has recognized the
critical role of agricultural research
and education in driving long-term
productivity and innovation. The budget for agricultural
research and education in FY 2025-26 is ?10,466.39 crore, reflecting a modest increase of
3.05% over the previous year. This increase, while positive, could have
been more substantial given the rising complexity and capital-intensive nature
of modern agricultural research.
First, a significant concern
addressed in this budget is food inflation, which has been persistently high,
crossing 10% year-on-year in late 2024. To tackle this, the government has
extended duty-free imports of pulses and imposed selective export restrictions
to maintain price stability. A parity in favour of pulses, however, is
essential to be brought through effective implementation of minimum support
prices (MSP) and procurement.
Second, Climate change risks,
including erratic weather patterns and declining water resources, underscore
the need for increased investment in resilient agriculture. The budget outlines
measures for irrigation, soil health management, and climate-adaptive
technologies to protect farmers from climatic shocks. These interventions
reflect a growing recognition of the need for sustainable and climate-resilient
farming practices. However, the government could have allocated more budget for
natural resources management and particularly for mitigating the drought on a
long term through structural reforms in the agricultural sector.
With actual expenditure at about
50% to budget allocation to schemes such as organic farming, promotion of the
scheme with enhanced budget levels requires critical thinking where states
could be brought in for identification of commodities for organic farming.
Third, the budget emphasizes the
importance of a federal setup in transforming the agriculture and allied
sector. Agricultural reforms cannot be implemented effectively without the
joint effort of states, as challenges vary regionally. A blanket intervention
was required to collectively address these challenges, leading to the
introduction of the Prime Minister Dhan Dhanya Krishi Yojana (PMDDKY), targeted at 100 districts with low productivity, moderate crop
intensity, and below-average credit parameters. The scheme adopts convergence
approach and expected to cover over 1.67 crore farmers. Focus on less-developed
regions would have a strong marginal effect on overall agricultural
development.
An interesting aspect of this
intervention is the augmentation of post-harvest
storage at the panchayat level, aimed at
reducing post-harvest losses from farm gates to markets. By addressing
logistical inefficiencies and improving storage facilities, the government
seeks to minimize wastage and enhance farmer incomes.
Fourth, India's rural economy,
where nearly 65% of the population resides, is heavily dependent on
agriculture. However, the sector faces significant challenges, including disguised unemployment (estimated at 25-30%), low productivity, inadequate infrastructure, and climate-induced
vulnerabilities. According to NITI Aayog, nearly 40% of farmers express a desire to leave farming due to
economic distress. Additionally, rural wages have grown at a sluggish pace of 2-3% per annum, while
agricultural productivity in India remains 30-50%
lower than global benchmarks. These challenges
contribute to large-scale rural-to-urban migration, with over 9 million people
moving annually in search of better livelihoods.
To address these pressing
concerns, a comprehensive
multi-sectoral ‘Rural Prosperity and Resilience’ programme has been launched in collaboration with state governments. This
initiative focuses on skilling, investment,
and technological integration to create
sustainable livelihood opportunities in rural areas. By promoting agro-processing, digital agriculture, and climate-resilient
farming, the program aims to enhance rural
employment and ensure that migration becomes an option rather than an economic
compulsion.
Fifth, The Central Government’s
partnership with states is crucial in implementing any initiative effectively.
States play a pivotal role in identifying regional
priorities, mobilizing resources, and ensuring last-mile delivery. A coordinated approach—combining national policy frameworks with
state-level execution—will maximize impact, ensuring inclusive growth. This
collaboration will be key to transforming rural
landscapes, fostering economic resilience, and securing a prosperous future for
millions. PMDDKY is expected to play a crucial
role in strengthening the center-state collaboration and building resilience in
rural and agricultural economy.
Sixth, the FY26 budget
highlights key interventions aimed at boosting agricultural productivity, value
addition, and market access through the establishment of institutions and
targeted programs. The government has announced the creation of mission on cotton,
pulses, fruits and vegetables, hybrid seeds. A Makhana
Board in Bihar is to be supported for the
production and export of makhana, a crucial cash crop for the region.
Similarly, a new urea plant in Assam is expected to enhance domestic fertilizer production and reduce
reliance on imports, aligning with India’s goal of self-sufficiency in fertilizers.
Further, a Comprehensive Program for Vegetables & Fruits has been launched, focusing on post-harvest
infrastructure, cold storage, and processing facilities. This shows appreciation of demand-based strategies of agricultural
production. The National Mission on
High Yielding Seeds aims to increase seed
replacement rates and improve genetic yield potential, addressing productivity
gaps in key crops. Recognizing stagnation in cotton productivity, the Mission on Cotton Productivity
has been introduced to promote high-density
planting, improved agronomic practices, and better access to quality seeds.
These initiatives collectively
address critical challenges such as low
crop yields, inefficient supply chains, and soil nutrient deficiencies while leveraging global best practices
and technological advancements.
Last, India’s broader goal is to
elevate agricultural exports to $80
billion by 2030, while ensuring domestic food
security and improving farmer livelihoods. To achieve this, the government is
implementing measures to enhance
competitiveness, reduce trade barriers, and promote agri-entrepreneurship. Strengthening logistics, quality
control mechanisms, and global market linkages
will play a crucial role in meeting this export target.
Overall, the Budget FY 25 is a mature and visionary step
toward transformative changes in agriculture. It strategically consolidates interventions around thematic
priorities such as federal collaboration,
institutional strengthening, and self-reliance in agriculture. The increased budgetary allocations reflect the government’s
commitment to resolving systemic
agricultural challenges, fostering economic
resilience, and securing food security. This budget sets the right trajectory
for sustainable agricultural development, ensuring that agriculture continues to serve as the primary engine of economic growth in India.
(Authors
are Naveen P Singh is Principal Scientist at ICAR NIAP, New Delhi and Shivendra
k Srivastava is senior scientist at ICAR- NIAP, views are personal. A PIB
feature)
