<p>Indian agriculture is characterised by extremely small land holdings, highly unequal growth across crops and regions, heavy monsoon-dependence, weak infrastructure, and low research investment. Focused State support is crucial for alleviating the conditions prevalent in rural India by prioritising the needs of the agricultural sector.</p>.<p>In the budget speech for 2025-26, the Finance Minister rightly identified agriculture as ‘the first engine’ for India’s development journey. Development measures focusing on ‘building rural prosperity and resilience’ and ‘spurring agricultural growth and productivity’ were among the key areas highlighted last year. New missions such as Mission for Atmanirbharta in Pulses, Comprehensive Programme for Vegetables and Fruits, and the establishment of the Makhana board in Bihar were initiated to bolster this commitment. These were aimed at promoting production, value addition and remunerative pricing. Given this pronounced emphasis, it is an instructive exercise to study the fiscal commitment towards agriculture in light of the recently presented budget.</p>.<p>The share of the Ministry of Agriculture and Farmers’ Welfare in the Union Budget shows a decline over the past five years, from 3.3% in 2022-23 to 2.6% in 2026-27. Furthermore, the year-on-year growth of the budget revealed a growth of 0.7% between 2021-22 and 2022-23. The budgetary allocations saw a negative growth, that is, -5.6%, between 2022-23 and 2023-24. The recent Union Budget allocation saw an increase of 2% from the previous year. Thus, the increase in budgetary allocation over the years has been modest.</p>.<p>The four ministries – Ministry of Agriculture and Farmers’ Welfare, Ministry of Rural Development, Ministry of Fisheries, Animal Husbandry and Dairying, and Ministry of Panchayati Raj – together constitute the core of central government spending aimed at improving employment, incomes, infrastructure, and credit in rural India. Though the absolute allocations have risen over time, their relative share within the overall budget has remained more or less stagnant. The share allocated to these ministries as a proportion of the total budgeted expenditure has declined from 7.18% in 2021-22 to 6.5% in 2026-27. Lower budget provisioning for the sector seems worrying, especially in the backdrop of low agricultural incomes and weak rural demand. Improved allocations and full utilisation of budgeted expenditure could potentially have strong multiplier effects on rural employment and consumption.</p>.Union Budget 2026 | Sowing the seeds of prosperity in agriculture.<p>Critically, the budget estimates for 2026-27 do not show separate allocations for the new missions that were announced in the previous budget. For example, the Mission for Aatmanirbharta in Pulses was approved by the Union Cabinet on October 1, 2025, with a total outlay of Rs 11,440 crore over six years, but apart from the initial allocation of Rs 1,000 crore made in the previous budget, no further allocations have been made this year. The details of the revised estimates for this year have also not been provided. The lack of consistent funding for the new schemes could potentially constrain their successful implementation within the designated time.</p>.<p>Short of commitment</p>.<p>Some of the major schemes of the Ministry of Agriculture and Farmers’ Welfare, such as Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and Modified Interest Subvention Scheme (MISS), did not witness any increase in the budgetary allocation and remained stagnant at Rs 63,500 crore and Rs 22,600 crore, respectively. In fact, the allocations made for PM-KISAN are 4% lower than the actual expenditure in 2024-25. The allocation for the crop insurance scheme saw a marginal decline from Rs 12,242 crore to Rs 12,200 crore.</p>.<p>The 2025-26 budget had also announced support for the formation of 10,000 Farmer Producer Organisations, and the revised estimates for the same for 2025-26 are Rs 584 crore. The current budget allocations have gone below the revised estimates of the previous year, to Rs 500 crore. The cut in budgetary allocation is concerning as FPOs are collectives of small and marginal farmers which help them in increasing their bargaining power, better access to input, and output markets.</p>.<p>A few smaller schemes have registered visible increases. However, this is primarily due to the low base of the budget allocation rather than a significant change in the quantum. For example, the allocation for the National Beekeeping Mission rose from Rs 75 crore to Rs 100 crore.</p>.<p>The trend in the budgetary allocation of the rural sector, with particular emphasis on the Ministry of Agriculture, reveals that the fiscal outlays need to expand to fulfil the commitment to the sector, which is being seen as the first engine of development.</p>.<p>(Sonal is an independent scholar based in New Delhi; Sunit teaches at Azim Premji University, Bhopal)</p><p><em>Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.</em></p>
<p>Indian agriculture is characterised by extremely small land holdings, highly unequal growth across crops and regions, heavy monsoon-dependence, weak infrastructure, and low research investment. Focused State support is crucial for alleviating the conditions prevalent in rural India by prioritising the needs of the agricultural sector.</p>.<p>In the budget speech for 2025-26, the Finance Minister rightly identified agriculture as ‘the first engine’ for India’s development journey. Development measures focusing on ‘building rural prosperity and resilience’ and ‘spurring agricultural growth and productivity’ were among the key areas highlighted last year. New missions such as Mission for Atmanirbharta in Pulses, Comprehensive Programme for Vegetables and Fruits, and the establishment of the Makhana board in Bihar were initiated to bolster this commitment. These were aimed at promoting production, value addition and remunerative pricing. Given this pronounced emphasis, it is an instructive exercise to study the fiscal commitment towards agriculture in light of the recently presented budget.</p>.<p>The share of the Ministry of Agriculture and Farmers’ Welfare in the Union Budget shows a decline over the past five years, from 3.3% in 2022-23 to 2.6% in 2026-27. Furthermore, the year-on-year growth of the budget revealed a growth of 0.7% between 2021-22 and 2022-23. The budgetary allocations saw a negative growth, that is, -5.6%, between 2022-23 and 2023-24. The recent Union Budget allocation saw an increase of 2% from the previous year. Thus, the increase in budgetary allocation over the years has been modest.</p>.<p>The four ministries – Ministry of Agriculture and Farmers’ Welfare, Ministry of Rural Development, Ministry of Fisheries, Animal Husbandry and Dairying, and Ministry of Panchayati Raj – together constitute the core of central government spending aimed at improving employment, incomes, infrastructure, and credit in rural India. Though the absolute allocations have risen over time, their relative share within the overall budget has remained more or less stagnant. The share allocated to these ministries as a proportion of the total budgeted expenditure has declined from 7.18% in 2021-22 to 6.5% in 2026-27. Lower budget provisioning for the sector seems worrying, especially in the backdrop of low agricultural incomes and weak rural demand. Improved allocations and full utilisation of budgeted expenditure could potentially have strong multiplier effects on rural employment and consumption.</p>.Union Budget 2026 | Sowing the seeds of prosperity in agriculture.<p>Critically, the budget estimates for 2026-27 do not show separate allocations for the new missions that were announced in the previous budget. For example, the Mission for Aatmanirbharta in Pulses was approved by the Union Cabinet on October 1, 2025, with a total outlay of Rs 11,440 crore over six years, but apart from the initial allocation of Rs 1,000 crore made in the previous budget, no further allocations have been made this year. The details of the revised estimates for this year have also not been provided. The lack of consistent funding for the new schemes could potentially constrain their successful implementation within the designated time.</p>.<p>Short of commitment</p>.<p>Some of the major schemes of the Ministry of Agriculture and Farmers’ Welfare, such as Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and Modified Interest Subvention Scheme (MISS), did not witness any increase in the budgetary allocation and remained stagnant at Rs 63,500 crore and Rs 22,600 crore, respectively. In fact, the allocations made for PM-KISAN are 4% lower than the actual expenditure in 2024-25. The allocation for the crop insurance scheme saw a marginal decline from Rs 12,242 crore to Rs 12,200 crore.</p>.<p>The 2025-26 budget had also announced support for the formation of 10,000 Farmer Producer Organisations, and the revised estimates for the same for 2025-26 are Rs 584 crore. The current budget allocations have gone below the revised estimates of the previous year, to Rs 500 crore. The cut in budgetary allocation is concerning as FPOs are collectives of small and marginal farmers which help them in increasing their bargaining power, better access to input, and output markets.</p>.<p>A few smaller schemes have registered visible increases. However, this is primarily due to the low base of the budget allocation rather than a significant change in the quantum. For example, the allocation for the National Beekeeping Mission rose from Rs 75 crore to Rs 100 crore.</p>.<p>The trend in the budgetary allocation of the rural sector, with particular emphasis on the Ministry of Agriculture, reveals that the fiscal outlays need to expand to fulfil the commitment to the sector, which is being seen as the first engine of development.</p>.<p>(Sonal is an independent scholar based in New Delhi; Sunit teaches at Azim Premji University, Bhopal)</p><p><em>Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.</em></p>
