Budget Must Rescue Indian Agriculture From Drift and Denial

A bold peasantry, the country’s pride;
Once destroyed can never be supplied.
— Oliver Goldsmith, The Deserted Village

India’s farm sector sits in an uncomfortable paradox that policymakers have long chosen to look past. Agriculture and allied activities still provide livelihoods to nearly 45% of the workforce, yet contribute barely 15% to GDP. 

Indian agriculture has been stuck for decades with small, fragmented holdings, too much dependence on the monsoon, inadequate irrigation, poor inputs, weak post-harvest systems and unreliable market access. This has resulted in low yields, uneven quality, frequent losses and constant price swings. But these problems are now running into hard limits such as finite land, growing water stress and climate change.

The familiar policy playbook of MSP, procurement, PM-KISAN transfers, input subsidies and assorted freebies such as free ration has not altered this reality. At best, it has softened distress. At worst, it has entrenched dependence. If Indian agriculture is to move closer to global benchmarks, policy must break decisively from this comfort zone.

Agriculture is not a single activity; it is a web of interconnected systems. Yet Union Budgets have preferred announcement-led optics to execution-led reform. The gap between promise and outcome remains stubbornly wide.

Federal Test
If any sector exposes the limits of India’s federal functioning, it is agriculture. Land, water, markets and agriculture are constitutionally State subjects, while the Union controls fiscal allocations, trade and tariff policy, export-import regimes and macroeconomic levers that decisively shape farm outcomes. Without genuine Centre–State alignment, reform will remain stuck.

At the macro level, six mantras deserve Budget priority.

First, the input delivery system: seeds, fertilisers, agrochemicals and finance must be strengthened and policed. Unscrupulous operators thrive in regulatory slack, hurting both productivity and farmer trust. A credible monitoring mechanism is overdue.

Second, irrigation expansion must be accelerated. Major and medium irrigation projects are perennially delayed and overrun on costs, while last-mile connectivity is often stalled for want of relatively small sums of money. Inter-State disputes, meanwhile, have been allowed to drag on unresolved. The Centre must actively broker solutions with States.

Third, agriculture must absorb technology at scale pre- and post-harvest. Infotech, biotech, satellite and nuclear agri-tech, nanotech, digital platforms, drones, blockchain—the list is long and necessary. Technology is scale-neutral and ideally suited to precision farming for smallholders. Startups should be challenged and incentivised to solve real farm problems.

Fourth, rural infrastructure needs sustained investment for roads, logistics and scientific warehousing. The Agri Infrastructure Development Fund must be utilised fully. APMC oversight should be depoliticised, market yard operations professionalised, and technology deployed for quality assessment and transparent price discovery. Unviable mandis should be privatised without hesitation; States must take ownership.

Fifth, India must invest in its farmers as economic agents. A massive, continuous campaign of awareness, training and education is essential for 130 million growers. Input management, agronomy, modern cultivation practices and market outlooks must be communicated directly to farmers’ mobile handsets. Over time, cultivators must evolve into informed traders. Agricultural universities and Krishi Vigyan Kendras must be central to this effort.

Sixth, given the sector’s scale and sensitivity, Budget outlays for agriculture and allied activities must rise materially. More importantly, outcomes must be audited. The Finance Minister should present an annual Outcome Report on prior Budget commitments. The National Mission on Edible Oils (palm oil), launched in August 2021 with clear acreage and production targets for 2025–26, is a case in point. Where does it stand today? Accountability cannot remain optional.

These reforms are not exhaustive, but they would meaningfully alter the sector’s trajectory. Implementation, however, will decide success. A National Agriculture Policy with regionally differentiated strategies would be a logical starting point.

Strategic Crops
Budget 2026-27 must concentrate on three crops: oilseeds, pulses and cotton. Even as India leads the world in pulses and ranks second in cotton, it continues to spend over $20 billion annually importing vegetable oils (15-16 million tonnes) and pulses (6-7 million tonnes) in substantial volumes. Cotton has joined this list of concern. From being a net exporter until two years ago, India is now importing around five million bales worth $300 million.

The rhetoric of Aatmanirbhar has echoed across Budgets, but the reality on the ground tells a different story. Supply shortfalls persist, ownership is absent and strategy is fragmented.

Equally worrying is the absence of political will to regulate and monitor imports, collect advance intelligence and intervene strategically to balance farmer and consumer interests. Corporate interests appear to dominate the discourse. Policymaking in this space is rarely data-driven.

Worse, there is an evident deficit of commodity commercial intelligence and research capability within decision-making circles. Even hedging, a globally accepted tool for price risk management, remains unavailable for key crops, for reasons best known to policymakers.

For oilseeds, pulses and cotton, four interventions are critical.

Stewardship: Farmers must be educated in good agricultural practices—input optimisation, agronomy, integrated pest management and integrated nutrient management.

Technology: Domestic genetic research must be promoted, including through public–private partnerships. Irrational resistance to technology has only deepened farmer vulnerability and dependence on handouts. This mindset must change.

Replication: Yield disparities across regions are indefensible. Best practices from high-yield zones must be systematically studied and replicated in low-yield areas.

Corporate Role: Corporates with significant exposure to these crops should be encouraged (if necessary mandated) to build backward linkages, work with FPOs and expand domestic production through contract cultivation.

Indian agriculture does not suffer from a lack of ideas. It suffers from evasion—of responsibility, of execution and of accountability. The Union Budget must decide whether to confront this reality or allow the drift to continue. The costs of inaction will extend well beyond farmers, ultimately burdening the wider economy.