Agriculture ministry’s budget allocation sees 2.9% cut, output push in 100 districts

India will launch a new programme across 100 districts to boost farm productivity, along with measures to expand irrigation and credit limit to farmers, Union finance minister Nirmala Sitharaman on Saturday said while presenting Union Budget 2025-26.

Highlighting agriculture as an engine of growth, the FM said the government would roll out a PM Dhandhanya Krishi Yojana, which will target regions with low farm productivity and crop intensity, aiming to reach an estimated 10.7 million farmers.

The total allocation for the ministry, however, saw a cut of 2.9%. Compared to ?1.31 lakh crore allocated in 2024-25, as per revised estimates (RE), the outlay for 2025-26 stood at ?1.27 lakh crore. The amount for capital expenditure in the sector for 2025-26 stood at ?87.87 crore, compared to ?118.63 crore in the previous year (RE).

“Motivated by the success of the Aspirational Districts Programme, our government will undertake a ‘Prime Minister Dhan-Dhaanya Krishi Yojana’ in partnership with states,” Sitharaman said, presenting her eighth consecutive budget in the Parliament

Through the convergence of existing schemes and specialised measures, the programme will cover 100 districts with low productivity, moderate crop intensity and below-average credit parameters, the FM said.

The rural push in collaboration with states will focus on creating sustainable livelihood opportunities so that migration to cities remains an “option rather than a necessity”, the FM said in her budget speech.

Sitharaman said the government would also launch a six-year mission to boost pulses output to achieve self-sufficiency and a five-year mission to ramp up cotton production.

The farm sector, which employs nearly half the country’s population, accounts for about 16% of India’s gross domestic product (GDP) and has proved resilient to shocks, such as the Covid-19 pandemic.

The sector has clocked a compounded annual growth rate (CAGR) of 5.4% since 2019-20, according to the Economic Survey tabled in Parliament on Friday.

In 2014-15, concerted efforts were made to achieve near self-sufficiency in pulses and farmers responded by increasing the cultivated area by 50%. Since then, with rising incomes and better affordability, consumption of pulses had increased substantially, Sitharaman said.

“Our government will launch a programme in pulses, with focus on urad (black gram), tur (pigeon pea) and masoor (yellow lentils),” the finance minister said. The limit for subsidised credit for cultivators has been raised to ?500,000 from ?300,000 earlier.

The country’s chief economic adviser, V Anantha Nageswaran, in a report released on Friday, forecast India’s economy would see a sub-7% expansion rate in the fiscal year beginning April 1, advocating more reforms in areas such as agriculture, land and labour to boost growth.

Among other key measures, the budget also announced a new fertiliser factory in Assam’s Namrup to aid self-sufficiency in urea production. A comprehensive programme to promote production of horticulture produce will also be launched, the budget announced.

In Bihar, a Makhana Board will be established to improve production, processing and marketing of makhana (foxnut) and growers will be organized into producer organisations.

“The scheme to enhance productivity as well as production of crops in 100 districts appears to me to be the first scheme in decades to create new food-bowl states, especially in backward regions. It must be supported with adequate funding,” said K Mani, a former faculty at the Tamil Nadu Agriculture University.