By Manoj Kumar and Mayank Bhardwaj
India is gearing up to increase its agricultural budget by about 15%, aiming for around $20 billion in the upcoming budget. This is the highest rise in six years, reflecting the government’s effort to enhance rural incomes and manage inflation.
The extra funding will focus on developing better seed varieties, improving storage, and enhancing the infrastructure needed for the supply chain. It will also support the production of pulse crops, oilseeds, vegetables, and dairy products.
India, known as the world’s second-largest producer of key crops like rice, wheat, and sugar, has recently faced rising food prices, which spiked over 10% in October 2024. Although prices have softened a bit since then, they still average above 6% over the past decade.
To tackle these price increases, New Delhi has imposed export restrictions on certain agricultural products, including wheat, and has extended its duty-free import policy for some pulses.
The total budget for agriculture and related activities for the 2025/26 fiscal year, starting in April, is projected to rise to about 1.75 trillion rupees (approximately $20.2 billion), compared to 1.52 trillion rupees in the current fiscal year. This includes an increase in the agriculture ministry’s budget and more investment in research aimed at developing innovative crop varieties.
Finance Minister Nirmala Sitharaman is set to present this budget on February 1, with agriculture being a key focus. The government aims not only to boost domestic supplies but also to increase farm exports from $50 billion to $80 billion by 2030.
Agriculture plays a vital role in India’s economy, employing around 45% of the workforce and contributing nearly 15% to the overall economy of $3.5 trillion.
Additionally, the budget is expected to raise the limit for subsidized farm loans from 300,000 rupees to 500,000 rupees per farmer and to expand crop insurance programs. The government also plans to enhance pulse production to 30 million metric tons by 2030 and invest $9 billion in the fisheries sector over the next five years.
Incentives totaling 109 billion rupees are also likely to be offered to food processing companies through 2027. However, experts like Devinder Sharma, a farm policy analyst, warn that these steps may not fully address deeper issues, such as low productivity and stagnant incomes.
Sharma advises that the government should consider increasing direct financial support to farmers and improving crop procurement processes to stabilize incomes and ensure fair pricing for consumers.
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agriculture sector, rural incomes, inflation, pulse crops, farm exports
