The 2026-27 budget is presented at a time of extraordinary challenges, with global trade uncertainties with the United States of America and geopolitical conflicts adding to domestic economic pressures. It aims to build on ongoing efforts toward self-reliance and the vision of “Viksit Bharat.” The budget seeks to accelerate sustainable growth, fulfill people’s aspirations, and promote inclusive development across sectors (Sab ka Saath-Sab ka Vikas). Key priorities include reforming critical sectors, strengthening a resilient financial system, and fostering the adoption of cutting-edge technologies to drive innovation and competitiveness.
Agriculture requires a more strategic focus in the budget. Key challenges facing the sector include declining commodity prices, over-reliance on input subsidies, fragmented landholdings, inefficiencies in production and marketing, and inadequate post-harvest infrastructure. The assessment of this year’s agricultural budget should be viewed in continuity with the previous budget, which initiated several measures to boost investment in infrastructure, increase production, and strengthen value chains. This year’s budget includes provisions to promote cutting-edge technologies, encourage diversification toward high-value crops, and support the livestock sector.
In this note, we have analyzed three important areas of the budget on agriculture sector. We have also identified a few opportunities that were missed in the current year’s budget.
AI-driven agricultural platform
The first and most important agricultural initiative announced in the budget is the launch of a multilingual, artificial intelligence (AI)–driven agricultural platform called Bharat Vistar (Virtually Integrated System to Access Agricultural Resources). The initiative aims to integrate the AgriStack portals with advisory services based on ICAR’s agricultural practices.
AgriStack is a unified digital public infrastructure (DPI) designed to enhance agricultural efficiency, productivity, and farmers’ incomes. It enables technology-driven, personalized services for farmers, including improved access to credit, insurance, and market information, while also supporting data-driven decision-making for government planning. Through this initiative, the agricultural research system is expected to connect directly with farmers using AI-based solutions.
Bharat Vistar is expected to provide farmers with customized crop-planning advice, weather alerts, pest-management guidance, and market intelligence, thereby serving as a modern tool for agricultural extension. Agricultural extension is crucial as it bridges the gap between research and on-farm practices and accelerates the adoption of modern, sustainable technologies that enhance productivity and incomes. It also plays a vital role in strengthening food security, improving livelihoods, supporting climate change adaptation, and promoting rural development. A study by the International Food Policy Research Institute indicates that India’s network of Krishi Vigyan Kendras (KVKs) has been highly cost-effective, with every rupee invested generating returns of ₹8 to ₹12. In this context, Bharat Vistar is expected to significantly benefit the farming community by increasing incomes, reducing risks, and improving agricultural sustainability. The author envisions the formation of virtual KVKs through the Bharat Vistar initiative in the long run, which will tremendously reduce the cost of extension and improve the efficiency of agriculture.
Strengthen the livestock sector
The second proposal focuses on strengthening the livestock sector. The key provisions include: (i) improving access to finance through credit-linked subsidies, (ii) fostering collective farming models by promoting farmer-producer organizations, and (iii) developing livestock value chains. There are twin objectives of this proposal. The first is to strengthen veterinary professionals through strengthening para-vet colleges, veterinary hospitals, labs, and breeding centers. The second is to organize livestock farmers to collectively produce and market.
The livestock sector is a major driver of India’s rural economy, contributing approximately 30% of the gross value of agricultural output. More than 70% of small and marginal farmers are associated with this sector, and the dairy sector alone directly employs over 80 million farmers. Strengthening the livestock sector across the entire value chain would not only enhance farmers’ incomes and employment opportunities—particularly for small and marginal farmers—but also provide a significant boost to the overall rural economy.
While it is welcoming that the budget places special emphasis on the livestock sector, the impact could have been further boosted by allocating dedicated funds for livestock research, particularly in animal health and nutrition. Research conducted by ICAR-NIAP indicates that public investment in livestock research and extension yields high returns, with a marginal internal rate of return of approximately 40.9%, leading to substantial productivity gains. The study further reports that every rupee invested in animal science research yields a return of ₹20.81, while investments in livestock extension yield ₹6.17.
Diversification towards high-value commodities
The third proposal aims to diversify agriculture and enhance farm incomes by promoting high-value agriculture. The focus includes crops such as coconut, areca nut, cocoa, cashew, and sandalwood in the coastal regions; agarwood in the Northeastern region; and premium nuts such as almonds, walnuts, and pine nuts. The proposal emphasizes the launch of dedicated programs to rejuvenate ageing orchards, expand high-density cultivation, and promote value addition through the active engagement of rural youth. Through this initiative, the government intends to enhance the global competitiveness of these commodities and develop them into premium global brands by 2030. High-value agriculture has the potential to generate employment not only in cultivation but also across processing, branding, logistics, and marketing, thereby contributing to higher and more stable farm incomes.
The success of this program will depend on several critical factors. These include the availability of quality planting material, region-specific research and extension support, and timely access to institutional credit and insurance. Equally important are investments in post-harvest infrastructure, such as cold storage, processing facilities, and efficient logistics, along with quality assurance, certification, and traceability systems to meet international standards. Strengthening farmer collectives, improving market linkages, and ensuring export facilitation and price risk management mechanisms will be essential to integrate farmers into organized value chains and sustain long-term growth in high-value agriculture.
On diversification, the budget could have included a stronger focus on key fruit crops for pan-India to expand their production, processing, branding, and exports. India has substantial untapped potential to increase both the production and export of fruits and their value-added products. Building on the approach of the earlier budget initiative, such as the “Dhan-Dhyan Yojana,” the current budget could have introduced a dedicated “Fal-Phul Yojana” encompassing major fruits like mango, guava, oranges, bananas, and others to support an integrated, value-chain-based development strategy.
Missed opportunities
The budget has missed a few opportunities to address the current challenges facing Indian agriculture. These challenges include declining prices for most agricultural commodities, a heavy reliance on input subsidies, and persistent inefficiencies within the agricultural sector. The continued emphasis on price and input support, rather than structural reforms, limits incentives for productivity enhancement and diversification. Moreover, insufficient attention to market reforms, post-harvest management, and value-chain development has constrained farmers’ ability to realize better prices for their produce.
To reduce the growing burden of input subsidies—particularly for fertilizers, power, and irrigation—the budget could have introduced targeted incentives to promote technologies that reduce the use of inorganic fertilizers, popularize conservation agriculture, and encourage precision farming practices. Such measures would help rationalize subsidies while improving resource-use efficiency and environmental sustainability in agriculture.
To minimize the risks of price volatility, the budget could have proposed developing agricultural commodity price-insurance models. While production insurance mechanisms already exist to compensate farmers for yield losses from adverse events, price insurance would protect farmers against a sharp decline in market prices. By guaranteeing a minimum price, such a mechanism could significantly reduce income uncertainty for farmers and, in the long run, replace minimum support prices.
Overall, the budget is forward-looking, focusing on cutting-edge technologies and diversification through high-value crops and livestock. More could have been done to increase farmers' incomes, improve the efficiency of the agricultural sector, and enhance the sustainability of natural resources.
(PK Joshi is President, Agricultural Economics Research Association and Vice President, National Academy of Agricultural Sciences)