Boost for agriculture: Budget proposals will help farmers and consumers

Public attention was largely focused on the relief extended to middle-class taxpayers in the Union Budget 2025-26, presented by Union Finance Minister Nirmala Sitharaman on Saturday — and understandably so. However, among other key areas, the Budget’s focus on agriculture stood out. Ms Sitharaman announced several measures for agriculture and allied activities, which should help both farmers and consumers. Inspired by the aspirational districts programme, the minister announced a programme called “Prime Minister Dhan-Dhanya Krishi Yojana”. It will seek a convergence of existing schemes and other specialised measures in 100 districts with low productivity. The idea is to increase productivity in these districts, enhance crop diversification, and improve the availability of long- and short-term credit among other objectives. The programme, to be launched in partnership with states, is expected to benefit 17 million farmers. Since it is focused on low-productivity districts, beneficiary farmers are likely to be from the bottom of the farm income pyramid.

 

 

Further, to achieve self-sufficiency in pulses, the government will launch a six-year mission with a focus on tur (pigeon pea), masoor (lentil), and urad (black grams). Under the scheme, central-government agencies will procure the above-mentioned pulses as much on offer for the next four years from farmers who enter into an agreement with central agencies. The assurance of selling the produce should incentivise farmers to grow more. This should enable farmers, particularly in Punjab and Haryana, to move away from the wheat-paddy cycle. Besides, the government will also launch a national mission on high-yielding seeds and a mission to improve cotton productivity. Given the change in the consumption pattern, a programme will be launched for fruit and vegetables. The Budget also proposed setting up a Makhana Board in Bihar. The government will bring an enabling framework to improve India’s prospects in the fisheries sector. To facilitate credit availability, the finance minister proposed to increase the loan limit of the kisan credit card from Rs 3 lakh to Rs 5 lakh under the modified interest-subvention scheme. The card is used by about 77 million farmers in the country. Besides specific measures in the agricultural sector, the government has proposed to launch a programme on “Rural Prosperity and Resilience”. The programme, in partnership with states, will look at aspects such as skilling, use of technology, and investment.

 

In terms of Budget allocation, agriculture and its allied sectors have seen a healthy jump of about 22 per cent to about Rs 1.71 trillion. The Budget’s focus on agriculture and making it one of the four engines of development must be welcomed. Nearly half of India’s workforce depends on agriculture for livelihood. Therefore, enhancing production and productivity will help boost income in the sector, which, in turn, will drive overall demand. However, the attention on agriculture should not undermine the broader policy requirement of shifting the workforce out of this sector. Nonetheless, higher agricultural production will also help consumers in terms of affordable prices. Food prices have been the major driver of the headline consumer price inflation rate in recent quarters, complicating policy decisions for the Reserve Bank of India. Given that weather-related events are affecting agriculture production and productivity, increased attention should be given to research and development. Thus, a marginal increase in the allocation for the Department of Agricultural Research and Education was a disappointment.