Budget 2025: FM promises intervention in 100 districts to boost crop yields

Credit limit on KCC raised to Rs 5 lakh; farm Budget at Rs 1.71 trn, 22% more than FY25RE

Union Finance Minister Nirmala Sitharaman, while presenting on Saturday the first full-year Budget of the third term of the Narendra Modi government, promised to raise the credit limit on the kisan credit card (KCC) from Rs 3 lakh to Rs 5 lakh.

 

For about 100 districts, she announced targeted intervention, called the “Prime Minister Dhan-Dhaanya Krishi Yojana”, to raise productivity, adopt crop diversification, and push irrigation and storage.

 

The increase in the KCC limit will cost the exchequer an additional Rs 26,000 crore and benefit more than 77 million growers, fishermen, and dairy farmers.

 

“This (the increase in limit) is to enable those farmers who are doing commercial farming, as more crop loans are required. It is not to boost rural consumption, it is to facilitate farmers who need more loans for farming,” said Ajay Seth, secretary to the Department of Economic Affairs.

 

 

The “Dhan-Dhaanya Krishi Programme”, which will run in partnership with states, is modelled on the “aspirational districts” programme of the government.

 

However, the Budget’s fine print shows there is no central assistance for the scheme.

 

Agricultural and its allied sectors got a budgetary allocation of more than Rs 1.71 trillion, which was almost 22 per cent more than the Revised Estimates (RE) for FY25 and almost 13 per cent more than the Budget Estimates (BE) of FY25. 

 

This is perhaps one of the biggest increases in budgetary allocation for agriculture and allied sectors in the last few years.

 

That apart, the Budget promised to set up a new National Makhana (foxnut) Board in Bihar, which is bound for elections, with an allocation of Rs 100 crore.

 

Bihar is the country’s largest producer of foxnuts and the state’s agriculture minister had long been asking for special emphasis on the crop.

 

On agricultural research, the Budget has promised to set up a National Mission on Hybrid Seeds but with an allocation of just Rs 100 crore.

 

The Budget for the Department of Agricultural Research and Development was kept at Rs 10,466.49 crore, which was a meagre increase of just 3 per cent.

 

The Budget also announced a second National Enlarged Gene Bank, which would conserve 1 million germplasm. It would safeguard plant genetic resources against any future untoward incident.

 

“This Budget will change the picture of rural India and will also change the fate of the farmer,” Agriculture and Rural Development Minister Shivraj Singh Chouhan told reporters.

 

For developing the cotton crop, which has seen a sharp drop in yield due to low technological intervention, the Budget has promised a mission with an allocation of Rs 500 crore.

 

India has one of the lowest cotton yields of 450 kg per hectare against the global average of more than 800 kg.

 

There were a host of tax tweaks for the cotton sector, including yarn and knitting.

 

“The Budget announced a flat 20 per cent or Rs 115 per kg import duty, whichever is higher, imposed on all knitted fabric HS (harmonised system) codes. This means no scope for leakages, and any fabric below Rs 575 per kg would attract an import duty of Rs 115 per kg, which will stop undervalued fabrics from entering the country,” said Sanjay Kumar Jain, managing director of textile producer TT Ltd.

 

A mission on vegetables and fruit was announced with Rs 500 crore. An 83 per cent increase in the Budget Estimates was announced for “Har Khet ko Pani” for irrigation.

 

The biggest allocation in terms of new schemes was for the National Mission on Pulses with an allocation of Rs 1,000 crore. The mission over the next six-years will specially focus on tur (pigeon pea), urad (black gram), and masoor (lentil) and central agencies will procure 100 per cent of these three pulses under contractual agreements.

 

This could be part of the proposal the Centre offers to protesting farmers in its discussion slated later this month.

 

In the case of rural sectors, the Budget Estimates of Mahatma Gandhi National Rural Employment Guarantee Programme was pegged at Rs 86,000 crore, which is same as the BE and RE of FY25, while the allocation for rural housing schemes was also Rs 54,832 crore, higher than the RE of Rs 32,426 crore of FY25.

 

“The Budget has belied farmers’ hopes on income augmentation through the PM Kisan Samman Nidhi, which has stagnated even when the urban population has been provided income tax concession,” said Sudhir Panwar, a former member of the Uttar Pradesh Planning Commission.

 

(With inputs from Shine Jacob)