Government's agriculture spending has grown six-fold since FY15

Agri budget has witnessed a 6x jump in a decade

The government has ramped up spending on agriculture over the past decade, as the budget allocation for the sector, which contributes almost 17 percent to the GDP and is one of the biggest employers, has increased six-fold since Prime Minister Narendra Modi first took office in 2014.

While the government’s flagship PM-KISAN, which offers farmers a Rs 6,000 per annum transfer, accounts for a large part of the spending, accounting for nearly half of the Rs 1.23 lakh crore likely spent this fiscal year, a Moneycontrol analysis shows that other schemes, too, have seen a healthy jump during the period.

In 2024-25, the government is likely to have spent Rs 65,529 crore on agricultural schemes other than PM-KISAN.

While the agriculture budget has grown at a compounded annual growth rate of 5.4 percent since 2019-20, non-PM-KISAN spending has increased by 6.5 percent annually.

The crop insurance and modified interest subvention schemes are major contributors, accounting for over half of the spending on agricultural programmes other than PM-KISAN.

The non PM-KISAN spend is expected to receive another boost in the coming budget. In one of the first decisions of the year, the cabinet extended the crop insurance scheme with an outlay of Rs 69,515.7 crore between 2021-22 and 2025-26.

The scheme’s outlay is expected to increase to Rs 16,070 crore, compared with Rs 14,600 crore budgeted for FY25.

Agri research need a push

Agricultural research spending has tapered off from the first term of the NDA government (2014-19).

While research spending grew at 9.2 percent annually between FY15 and FY20, the pace slowed to 5.7 percent in the second term.

The spending increased to Rs 7,523 crore in FY20 from Rs 4,840 crore in FY15. In FY25, the government plans to spend Rs 9,941 crore on agricultural research.