The Parched Fields, How India’s Fiscal Priorities Are Failing its Agricultural Heartland

The Parched Fields, How India’s Fiscal Priorities Are Failing its Agricultural Heartland

In the grand theatre of India’s annual Union Budget, where soaring rhetoric on digital futures, infrastructure, and strategic autonomy often takes center stage, a critical sector that sustains nearly half the nation’s populace and its food security has been relegated to the wings, its pleas for investment drowned out by the applause for more glamorous allocations. The stark analysis presented by former Haryana Chief Minister and Leader of the Opposition, Bhupinder Singh Hooda, unveils a troubling and deliberate trend: despite constituting a workforce of approximately 42% and remaining the bedrock of rural India, agriculture is being systematically edged out of the government’s fiscal priorities. The latest budgetary numbers reveal not just stagnation, but an alarming retreat from strategic investment in the very foundations of agrarian resilience, at a time when the sector faces unprecedented challenges from climate change, market volatility, and escalating input costs. This is not a minor oversight; it is a profound strategic blind spot with potentially dire consequences for the nation’s economic stability, social fabric, and long-term sovereignty.

The data tells a disquieting story of consistent marginalization. Out of a massive total outlay of approximately ₹53.47 lakh crore, the allocation for agriculture and allied sectors stands at ₹1.62 lakh crore—a figure that is only marginally higher than last year’s revised estimate in nominal terms, but a significant loser in the battle for fiscal priority. The share of the Ministry of Agriculture and Farmers’ Welfare in total government expenditure has plummeted from 4.26% in FY 2021-22, to 3.46% in FY 2025-26, to a mere 2.62% in the current Budget. In an era of nominal GDP growth and an expanding budgetary pie, this shrinking proportional share is a deliberate signal. It signifies that the sector, which must feed a growing population, adapt to a changing climate, and support rural livelihoods, is being asked to do so with a relatively shrinking pool of state resources. The fields are being asked to yield more, while the well of public investment runs drier.

The Hollowing Out of Core Support: Stagnant Schemes and Eroding Safety Nets

The Budget’s failure is not one of total absence, but of a dangerous hollowing-out. Over 80% of the ministry’s allocation is consumed by four flagship schemes: PM-KISAN (direct income support), PM Fasal Bima Yojana (crop insurance), the Interest Subvention Scheme, and PM-AASHA (price support). Alarmingly, the combined outlay for these four pillars has grown by a paltry 0.2% over last year’s revised estimates—a figure that represents a significant cut in real terms given prevailing inflation.

• PM-KISAN’s Frozen and Eroding Value: The most glaring example is PM-KISAN. Its allocation of ₹63,500 crore is actually 15% lower in nominal terms than the ₹75,000 crore provided in 2019-20. This means the nominal ₹6,000 annual support to farmer families has remained frozen for over five years, while the cost of diesel, fertilizers, pesticides, seeds, and labor has skyrocketed. The support’s real purchasing power has been severely eroded, turning a critical safety net into a dwindling token gesture. The government has ignored repeated recommendations from parliamentary committees to index this support to inflation, revealing a disregard for the crushing economic reality on the ground.

• The Mirage of High-Value Agriculture: The Budget mentions a “much-publicised high-value agriculture scheme” focused on niche crops like coconut, cashew, and cocoa. However, its allocation is a derisory ₹350 crore—a sum so small it can only be described as tokenistic, incapable of driving any meaningful transformation or area expansion for these crops. It is a headline without substance.

• The Deafening Silence on MSP: The loudest and most politically significant silence in the Budget is on the legal guarantee for Minimum Support Prices (MSP), a core demand of farmer movements for years. With only nominal annual MSP increases failing to keep pace with input cost inflation, and with government procurement increasingly selective and declining (focusing mainly on rice and wheat in a few states), the vast majority of India’s farmers are being pushed naked into the volatility of open markets without an assured price floor. The promise of remunerative returns remains a political slogan, not a fiscal commitment.

The Ghost of Past Promises: Unfunded Schemes and Stalled Ambitions

The Budget’s narrative becomes even more damning when one examines the fate of previously announced grand initiatives, which now stand as monuments to unfulfilled promises.

• PM Dhan-Dhanya Krishi Yojana: This scheme is a case study in policy abandonment. Launched with great fanfare in the 2025-26 Budget with an outlay of ₹24,000 crore, it aimed to transform 100 low-productivity districts—the areas most in need of intervention. It was formally inaugurated in October 2025 and prominently featured in the latest Economic Survey. Astonishingly, not a single rupee has been allocated for it in this year’s Budget. This turns a high-profile promise into an empty shell, devastating the hopes of farmers in those districts and undermining governmental credibility.

• Agriculture Infrastructure Fund (AIF): Announced in 2020 with a corpus of ₹1 lakh crore to build vital post-harvest infrastructure like cold chains, warehouses, and processing units, the scheme has seen only ₹66,310 crore sanctioned so far. The lack of a fresh allocation this year suggests a critical loss of momentum, jeopardizing the urgent goal of reducing post-harvest losses (estimated at 10-25% for various produce) and improving farmers’ share of the consumer rupee.

• The Fertiliser Subsidy Cut: In a move that strikes directly at farm economics, the fertiliser subsidy has been cut to ₹1.71 lakh crore from ₹1.86 lakh crore. This is done without presenting any coherent alternative strategy to manage rising global fertiliser prices, address the widespread soil degradation resulting from imbalanced NPK use, or promote a transition to sustainable alternatives like organic and bio-fertilizers. It is a pure fiscal cut that transfers cost burdens onto farmers, exacerbating the agrarian crisis without offering a path forward.

Mortgaging the Future: The Fatal Squeeze on Research and Resilience

Perhaps the most shortsighted and dangerous aspect of the Budget is its treatment of agricultural research and development (R&D). The allocation for the Department of Agricultural Research and Education (DARE) has been reduced to ₹9,967 crore from ₹10,281 crore.

This cut is catastrophic in its long-term implications. India already spends less than 0.5% of its agricultural GDP on R&D, far below the global benchmark of 1% considered necessary for sustaining productivity growth and the 2-3% spent by agricultural powerhouses like the United States and Brazil. At a moment when Indian agriculture faces existential, interlocking threats from:

1. Climate Change: Erratic monsoons, rising temperatures, unseasonal frost, and new pest and disease profiles.

2. Plateauing Yields: Stagnant productivity in major cereal crops amidst dwindling water resources.

3. Nutritional Security: Persistent dependence on imports for pulses and edible oils.
   …slashing research funding is an act of profound fiscal myopia. It is akin to disarming the scientific corps on the eve of the toughest battle. The development of drought and flood-resistant seeds, climate-smart farming techniques, efficient water-management technologies, bio-fortified crops, and sustainable soil health practices all depend on robust, long-term R&D investment. This Budget chooses to save pennies today by risking the food security and climate resilience of tomorrow, effectively mortgaging the future of the sector and the nation’s nutritional sovereignty.

The Absence of a Vision: From Structural Reform to Managed Decline?

The overarching critique, powerfully articulated by Hooda, is that the Budget offers neither structural reform nor a transformative vision. It continues with a business-as-usual approach of tinkering with existing, underfunded schemes while ignoring the fundamental fault lines:

• There is no bold, mission-mode push for crop diversification away from water-intensive rice and wheat in ecologically stressed regions like Punjab and Haryana.

• There is no comprehensive plan for a soil health revolution or a transition to natural farming to reduce crippling chemical dependency and input costs.

• There is no architecture for farm-gate infrastructure and market access that would truly empower Farmer Producer Organizations (FPOs).

• There is no integration of agriculture with renewable energy (solar pumps, biomass) or water conservation on a war footing.

The message seems to be one of managed neglect. The political economy appears to have calculated that the electoral manageability of the rural vote through modest direct transfers (PM-KISAN) and symbolic gestures is sufficient, while the hard, capital-intensive work of transforming the sector can be indefinitely deferred. This is a perilous gamble with national stability.

Conclusion: The High Cost of Fiscal Blindness and the Imperative for a “Green New Deal”

A nation cannot credibly claim to be striding towards ‘Viksit Bharat’ (Developed India) while marginalizing the sector that employs 42% of its workforce and ensures its food sovereignty. The current Budget’s approach to agriculture is not just blind; it is wilfully turning away from a gathering storm of crisis.

The consequences of this neglect are multidimensional and severe: deepening agrarian distress, increased rural indebtedness, accelerated and often distress-led migration to already overburdened cities, heightened vulnerability to climate shocks that can disrupt national food supplies and spike inflation, and the erosion of the social contract with the farmer. The simmering discontent witnessed in recent farmer protests is a direct symptom of this systemic fiscal abandonment.

The need of the hour is not incremental change but a “Green New Deal” for Indian agriculture—a massive, concerted, and visionary investment program. This would entail:

• Doubling Public Investment in Agri-R&D to reach at least 1% of agri-GDP, focusing on climate resilience and sustainability.

• Launching a National Soil Health and Water Conservation Mission with substantial funding for regenerative practices.

• Reviving and massively funding infrastructure schemes like the AIF and Dhan-Dhanya Krishi Yojana with transparency and urgency.

• Designing a sustainable price support system that goes beyond MSP rhetoric to ensure income security.

• **Creating a Just Transition Fund for ecologically stressed regions to shift to less water-intensive crops.

The current Budget fails to even acknowledge this need, let alone fund it. By choosing to edge agriculture out of fiscal priority, India is not saving money; it is storing up a crisis of monumental economic, social, and political proportions. The fields are sending a clear distress signal; the corridors of power, it seems, have chosen to switch off the receiver. The cost of this deafness will be paid by the entire nation.

Q&A Section

Q1: What is the most telling statistical evidence that agriculture is losing fiscal priority in the Union Budget?
A1: The most compelling evidence is the consistent and sharp decline in the share of the Ministry of Agriculture and Farmers’ Welfare in total government expenditure. This share has fallen from 4.26% in FY 2021-22 to 3.46% in FY 2025-26, and down to just 2.62% in the latest Budget. Despite a growing overall Budget, this proportional shrinkage indicates a deliberate de-prioritization, meaning agriculture is receiving a smaller piece of the pie each year relative to other sectors.

Q2: How has the real value of the PM-KISAN income support scheme been undermined, and what has been the government’s response to recommendations for reform?
A2: The PM-KISAN scheme’s allocation of ₹63,500 crore is 15% lower in nominal terms than the ₹75,000 crore allocated in its inaugural year (2019-20). The annual payout has been frozen at ₹6,000 per farmer family for over five years, while input costs have risen sharply due to inflation. This has severely eroded the scheme’s real purchasing power. Despite recommendations from parliamentary committees to index the payment to inflation to preserve its value, the government has ignored this advice, allowing the support to become a less effective safety net.

Q3: What are two specific examples of previously announced agricultural schemes that have been effectively defunded or stalled in this Budget?
A3: Two prominent examples are:

1. PM Dhan-Dhanya Krishi Yojana: Announced in 2025-26 with a ₹24,000 crore outlay for 100 low-productivity districts and formally launched in October 2025, it has received zero allocation (₹0) in the current Budget, effectively killing the program after much publicity.

2. Agriculture Infrastructure Fund (AIF): Launched in 2020 with a ₹1 lakh crore corpus, only about two-thirds (₹66,310 crore) has been sanctioned so far. The Budget provides no fresh allocation, stalling critical investment in post-harvest infrastructure and signaling a loss of momentum.

Q4: Why is the cut in funding for agricultural research and development (R&D) considered particularly dangerous for India’s future?
A4: The cut in R&D (DARE allocation reduced to ₹9,967 crore) is dangerously short-sighted because it weakens India’s capacity to address existential threats. India already spends a meager <0.5% of agri-GDP on R&D, below the 1% benchmark for sustained growth. This funding is essential to develop climate-resilient crop varieties, drought and pest-resistant seeds, water-saving technologies, and sustainable farming practices. At a time of climate change and yield stagnation, slashing R&D investment compromises long-term food security, nutritional sovereignty, and farmer resilience for minimal short-term fiscal savings, essentially mortgaging the future.

Q5: What overarching critique does the author level against the Budget’s approach to agriculture, and what is the implied alternative?
A5: The author’s core critique is that the Budget offers neither structural reform nor a transformative vision. It represents a continuation of stagnant, underfunded schemes and piecemeal support, while ignoring fundamental challenges like crop diversification, soil health, water crisis, and a fair price system. The implied alternative is a comprehensive, New Deal-style transformation involving massively scaled-up investment in R&D, infrastructure, sustainable practices, and a coherent policy framework that moves beyond temporary subsidies to build a resilient, productive, and profitable agricultural sector capable of supporting its workforce and securing the nation’s food future.