Agri-stocks surged in trade as finance minister Nirmala Sitharaman announced a slew of measures to boost agriculture infrastructure, crop productivity and credit support to farmers in the Union Budget 2025-26.
Sitharaman outlined a mission to achieve self-reliance in pulses over the next six years, with a focus on tur, urad, and masur. "The government will undertake the Dhan Dhanya Yojana in partnership with states to enhance productivity, encourage crop diversification, improve post-harvest storage, strengthen irrigation, and provide both short- and long-term credit to benefit 1.7 crore farmers," she said in her budget speech on February 1.
"Finance Minister Nirmala Sitharaman's Budget proposal to raise Kisan Credit Cards (KCC) loan limit to Rs 5 lakh is much needed revision to uplift the condition of our annadatas. We had expected this in the Budget given the government's focus on empowerment of marginalised communities," said Vishal Sharma, Cofounder & CEO of AdvaRisk.
"The move will ensure farmers are able to procure enough credit to increase the productivity, which will give boost to rural economic growth," Sharma added.
Additionally, a Makhana Board will be established in Bihar to boost production and marketing, while a five-year mission will be launched to support cotton farmers and enhance yields. The government also increased the Kisan Credit Card loan limit to Rs 5 lakh to extend further financial support to farmers.
Following the announcement, shares agri-related companies- Kaveri Seeds, Jain Irrigation Systems, Mangalam Seeds, JK Agri Genetics, Nath Bio-Genes, Dhanuka Agritech, ShreeOswal Seeds soared up to 9 percent.
Fertiliser names like Fertilisers and Chemicals Travancore (FACT), Chambal Fertilisers and Chemicals, Deepak Fertilisers, Gujarat State Fertilizers and Coromandel International also gained around 4 percent.
The reaction was driven by the government fulfilling the industry's expectations of a continued support to lift farmer income and lift the rural economy.
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Companies and analysts in the sector had been expecting the Budget to support the rural consumption through welfare and credit schemes, besides measures to improve infrastructure.
In their pre-Budget note, analysts at GS wrote, "Given the reduced majority of the NDA (National Democratic Alliance) in the 2024 elections, there might be some re-allocation in expenditure towards rural transfers and welfare spending."
BoFA's analysts had also written that they had expected increased spending on welfare schemes through PM Kisan Samman Nidhi Yojana, which is a cash transfer scheme, and an upgradation of roads in the rural areas.
To improve sentiment for the agri sector, analysts were hoping too for allocations towards improvement in roads, irrigation facilities and better warehousing infrastructure to improve supply chain efficiency.
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