Budget 2026-27 Fails to Address Farm Sector Crisis
Budget 2026-27 presents a concerning narrative for India's agricultural sector, which is vital for livelihoods and food security but appears to be losing priority in economic planning. Agriculture employs approximately 42 percent of the nation's workforce yet contributes only about 16 percent to GDP, highlighting persistent productivity stagnation and diminishing farm viability. The average operational landholding has shrunk to 1.08 hectares, restricting opportunities for economies of scale, mechanization, and income growth. While the overall economy is projected to grow above 7 percent, agriculture is expected to lag at a mere 3 percent growth rate.
Declining Fiscal Allocations for Agriculture
Out of a total estimated outlay of Rs 53.47 lakh crore, agriculture and allied sectors have been allocated Rs 1.62 lakh crore, only marginally higher than last year's Rs 1.58 lakh crore. The Ministry of Agriculture and Farmers' Welfare now accounts for just 2.62 percent of total Budget expenditure, down from 3.46 percent in FY 2025-26 and 4.26 percent in FY 2021-22. This steady decline indicates that agriculture is being edged out of fiscal priority, raising alarms about long-term sustainability.
Inadequate Support for Key Schemes
Over four-fifths of the ministry's budget is directed toward four major schemes: PM-KISAN, PM Fasal Bima Yojana, the Interest Subvention Scheme for Kisan Credit Cards, and PM-AASHA. However, the combined allocation for these schemes has increased by a mere 0.2 percent over last year's revised estimates. PM-KISAN itself receives Rs 63,500 crore, which is 15 percent lower than the Rs 75,000 crore allocated in 2019-20, despite sharp rises in input costs. Parliamentary committees have recommended indexing income support to inflation, but this advice remains unheeded in the Budget.
Neglect of High-Value Agriculture and Infrastructure
The much-publicized high-value agriculture scheme, focused on select crops like coconut, cashew, and cocoa, has been allotted a token Rs 350 crore. There is no mention of the long-standing demand for a legal guarantee of Minimum Support Prices (MSPs). With only nominal MSP increases and declining cereal procurement, farmers are increasingly exposed to market volatility. The PM Dhan-Dhanya Krishi Yojana, launched in October 2025 with an outlay of Rs 24,000 crore for 100 low-productivity districts, has not received a single rupee in this Budget. Additionally, the Agriculture Infrastructure Fund of Rs 1 lakh crore, announced in 2020, has seen only Rs 66,310 crore sanctioned so far, with no fresh allocation this year.
Ignoring Input Costs and Climate Risks
Input costs have been largely ignored, with the fertilizer subsidy cut to Rs 1.7 lakh crore from Rs 1.86 lakh crore, without alternative strategies to address rising costs, soil degradation, or climate stress. The Budget offers little to promote self-sufficiency in oilseeds and pulses or to tackle climate-induced vulnerabilities, leaving farmers more susceptible to environmental challenges.
Squeeze on Agricultural Research and Development
The most alarming signal is the reduction in funding for agricultural research. Despite repeated warnings about climate risks and the necessity for technology-driven farming, the Department of Agricultural Research and Education has seen its allocation reduced to Rs 9,967 crore from Rs 10,281 crore last year. India already spends less than 0.5 percent of its agricultural GDP on R&D, well below the 1 percent benchmark required for sustained productivity growth. Cutting back on research reflects short-term fiscal thinking at the expense of long-term resilience.
Lack of Structural Reform and Vision
There is neither structural reform nor a transformative vision in this Budget to uplift the agricultural sector. A country cannot aspire to developed-nation status by marginalizing 42 percent of its workforce. The writer, Bhupinder Singh Hooda, Leader of the Opposition and former Chief Minister of Haryana, who headed the AICC Working Group on Agriculture Production, emphasizes the urgent need for policy shifts to secure India's farming future.
