Banking on agriculture, Budget 2025-26 focuses on Kisan for growth

The agriculture and allied activities department received an allocation of Rs 1.71 lakh crore for FY 26

Finance minister Nirmala Sitharaman began her budget speech highlighting the role of agriculture in driving India’s growth trajectory.

Launching the PM Dhan-Dhaanya Krishi Yojana, the finance minister said that the government will undertake a ‘Prime Minister Dhan-Dhaanya Krishi Yojana’ in partnership with states. The programme will cover 100 districts with low productivity, moderate crop intensity and below-average credit parameters to enhance agricultural productivity, adopt crop diversification and sustainable agriculture practices,  augment post-harvest storage at the panchayat and block level,  improve irrigation facilities, and  facilitate availability of long-term and short-term credit. The government said that  programme is likely to help 1.7 crore farmers.

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The agriculture and allied activities department received an allocation of Rs 1.71 lakh crore for FY 26, up from the revised estimates of Rs 1.40 lakh crore for FY 25 and budget estimates of Rs 1.51 lakh crore.

The Ministry of Agriculture and Farmers’ welfare has two departments-the research and education department which coordinates and promotes agricultural research and education, while the agriculture and farmers welfare department implements policies and programmes related to farmer welfare.

This department which gets over 90 per cent of the funds allocated for the agriculture sector is also responsible for the implementation of key farm-focused schemes run by the Central government including the Pradhan Mantri Kisan Samman Nidhi (PM-Kisan), Modified Interest Subvention Scheme and Crop Insurance Scheme. PM Kisan is PM Modi’s flagship scheme introduced in 2018, the scheme entails a cash transfer of Rs6000 per year as minimum income support.

According to an analysis by PRS legislative research, between 2018-19 and 2023- 24, the average fund utilisation by the Ministry was around 86% as compared to the budget estimates.  There has been a significant increase in the Ministry’s expenditure from 2019-20, since the launch of the PM Kisan scheme.

According to the Economic Survey 2024-25, the agriculture sector’s growth averaged five per cent annually from FY 17 to FY 23. In the second quarter of FY 25, the sector grew at 3.5 per cent-recovering from the previous four quarters during which growth rates varied between 0.4 per cent to 2.0 per cent.

The survey cited “ assured remunerative prices, improved access to institutional credit, crop diversification, support for sustainable practices, and enhancement in productivity for sustained growth”.

Riding on good monsoon, kharif foodgrain production in 2024 is projected at 1647.05 Lakh Metric Tonnes (LMT), suggesting an increase of 89.37 LMT compared to the previous year and 124.59 LMT above the average kharif foodgrain output4 bodes well for food security, according to the survey.

Agricultural income has increased at 5.23 per cent annually over the past decade, compared to 6.24 per cent for non-agricultural income and 5.80 per cent for the overall economy, doubling farm incomes has been a promise of the Modi government.