INDUSTRY VOICES Budget 2026: Agri sector seeks higher outlay for infra, push for research, climate-smart farming

Budget 2026: Agri sector seeks higher outlay for infrastructure, push for research, climate-smart farming

• Agriculture sector seeks higher investment and infrastructure in Budget 2026-27
• Experts urge focus on climate-smart farming, digital agri, and women farmers
• India seeks to enhance self-reliance in edible oils and pulses via ongoing missions.

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With the Union Budget 2026-27 on the anvil, agriculture is seeking higher investment-led spending with enhanced outlays towards infrastructure, research and development, climate smart farming.

The industry experts and stakeholders are hopeful of a continued support towards farmer aggregation models like producer organisations and cooperatives. They expect promotion of digital agriculture and greater capital expenditure through PPPs (Public-Private Partnership) for farm mechanisation.

“It is expected that the upcoming budget would be more rational with greater allocation towards direct infrastructure spend through PPP as well as investment subsidies, as to be more in sync with the practices in other more developed ecosystems such as in the USA and China,” said  Padmanand V, Partner and Agriculture Industry Leader, Grant Thornton Bharat.

EY pointed out that without climate-smart agriculture, the sector would face significant losses in the next 15 years.

“While addressing the immediate issues, such as MSP (Minimum Support Price) rationalization, the government can take the opportunity to leverage the MSP as a platform to promote climate-resilient farming,” EY said.

What the experts and stakeholders say

There is a need for considerable increase in investment spend in the budget as against the typical consumption oriented spend in terms of DBT  (Direct Benefit Transfer), MSP support and subsidizing operational expenditure in the agri budget, the industry says.

“Research and development (high yielding and climate resilient varieties), infrastructure (production, storage and processing), digital agricultural solutions (ag stack and AgTech) and exports (quality and higher value capture) should be the key focus areas for the upcoming budget,” said Shashi Kant Singh , Partner—Agriculture, Food and Agribusiness, PwC India.

Experts say that the budget should also support continuity of structural reforms for long term sustainability, while augmenting income support to the farming community.

With respect to medium-term and long-term solutions, the sector can also expect announcements around reduction of GHG emissions, soil health and increasing yield and productivity for India to become a food provider for the world.

As per Council on Energy, Environment and Water, scaling natural farming is contingent upon strengthening farmer institutions and building capacities for extension services.

With 2026 being the International Year of Women Farmers, the upcoming Budget is an opportunity to recognise and support women as central agents of change in advancing natural farming, Apoorve Khandelwal, Fellow, Council on Energy, Environment and Water (CEEW) noted. Investing in targeted capacity building of women-led institutions and enterprises significantly, as per CEEW, accelerates the adoption of natural farming.

The sector feels that the second phase of the National Mission on Natural Farming must step up ambitions.

Existing challenges for agri sector

Despite strong grain production, India loses a significant volume (15% to 20% for fruits and vegetables) of perishables to inadequate storage and logistics.

Even though Indian food security policy has strengthened in recent years through schemes such as the National Food Security Act (2013), PM Garib Kalyan Anna Yojana, PM POSHAN and Antyodaya Anna Yojana, the food supply chain has many challenges.

Rising climate risks, reliance on imports for edible oils and pulses and persistent malnutrition among children indicate that the next leap should come from structural reforms for agriculture resilience in India, according to EY.

Past budgetary focus areas

The agri and allied sector budget in FY25 stood at Rs 1.52 lakh crore and for FY26 stood at Rs 1.37 lakh crore, with related budget spend in terms of MSP and input subsidy effectively at over Rs 3.91 lakh crore.

“This implies that the bulk of the budget is towards DBT and subsidies and not towards facilitation of investment in farm mechanisation and in infrastructure, which was effectively less to the tune of Rs 30,000 crore,” Padmanand V said.

The government’s ongoing missions, such as the National Mission on Edible Oils–Oilseeds (NMEO-Oilseeds) and the Aatmanirbharta in Pulses Mission, highlight a clear push toward self-reliance.

NMEO-Oilseeds, with an outlay of Rs 10,103 crore until 2030–31, aims to raise output from 39 million tons to nearly 70 million tons, partly by bringing 40 lakh hectares of rice-fallow land under oilseeds.

Similarly, the pulses mission, backed by Rs 1,000 crore, targets self-sufficiency in select pulses by 2027 through the distribution of 126 lakh quintals of certified seeds and 88 lakh free seed kits.

“Budget 2026–27 must strengthen these efforts, especially because India still imports a significant share of its edible oil (India currently imports 60% of its edible oil requirement) and pulses. Improving domestic capacity is not just an economic goal; it is essential to enable long-term food security,” EY said.

The agriculture sector contributes about 18.2% of GDP (at constant prices) and employs nearly half the workforce.