Finance Minister could not provide enough fuel to the 'first engine of growth'

While presenting the budget for the new financial year 2025-26, Finance Minister Nirmala Sitharaman emphasized agriculture as the key driver of the economy, claiming it to be the first engine in realizing the vision of a developed India. However, when it came to fueling this engine through resource allocation, she was rather frugal. The total budget allocation for the Ministry of Agriculture and Rural Development is lower than last year. Most schemes have received allocations similar to the previous year, while some have seen an increase, though not significantly.  

Announcements have been made regarding schemes such as the Krishi Dhan Dhanya, the Cotton Mission, self-sufficiency in pulses, and increasing productivity and income in 100 districts with the cooperation of state governments. However, there has been no major increase in funding for agricultural research and development. The PM-Kisan Samman Nidhi remains at the same level as the current year. Additionally, the credit limit for the Kisan Credit Card (KCC) has been increased to ₹5 lakh, but the interest subsidy provision remains at the same level as the previous budget.  

While the increase in the KCC limit will benefit some farmers, it is also a fact that 88% of farmers in India are small and marginal, with an average landholding of less than one hectare. In such a scenario, only a limited number of farmers will benefit from this increase, as banks determine credit limits based on financial valuation.

The revised estimate for PM Crop Insurance for the current year is ₹15,864 crore, while ₹12,242 crore has been allocated for the new year. The provision for interest subsidy on KCC remains the same as the current year's ₹22,600 crore. The allocation for the PM Kisan Samman Nidhi scheme remains unchanged at ₹63,500 crore. For PM-Asha, ₹6,945.36 crore has been allocated, compared to ₹6,437 crore in the previous budget. The PM Kisan Mandhan Yojana, which provides pensions to farmers, has been allocated only ₹120 crore, up from ₹100 crore in the last budget. The plan to create 10,000 FPOs has an allocation of ₹584.60 crore, which is nearly the same as last year. The allocation for providing interest subsidy for the Agri Infra Fund has been increased from ₹750 crore to ₹900 crore. ₹75 crore has been allocated for beekeeping, and ₹71.50 crore for Agri Start-ups.

The budget for Drone Didi has been increased from ₹250 crore to ₹676.85 crore. ₹500 crore has been allocated for the Cotton Mission and ₹1,000 crore for the Mission Pulse. ₹500 crore has been provided for the Mission on Vegetables and Fruits, ₹100 crore for the National Mission on Hybrid, and ₹100 crore for the Makhana Board.

A provision of ₹10,466.39 crore has been allocated for the Department of Agriculture and Research (DARE), which is only ₹310.04 crore more than last year's budget provision of ₹10,156.35 crore. However, there has been a significant increase in the budget for fisheries and animal husbandry. The allocation for the Matsya Sampada Yojana has been increased from ₹1,500 crore to ₹2,465 crore, while the budget for the Department of Animal Husbandry and Dairy has been raised from ₹3,839.25 crore to ₹4,840.40 crore.  

The budget for food processing has also been increased, with the allocation for the PLI scheme rising from ₹700 crore to ₹1,200 crore. Similarly, the budget for the PM Kisan Sampada Yojana has been increased from ₹630 crore to ₹903.38 crore.  

There have been no changes in the subsidy policy for fertilizers. For the next year, ₹1,00,839.50 crore has been allocated for urea, and a subsidy of ₹49,000 crore has been set under the NBS for NPK fertilizers, which is slightly lower than the revised estimates for the current year.  

In this context, the Finance Minister has indeed placed agriculture as the primary engine of growth but has not introduced any major scheme or financial provision to support this claim. However, the subsidy for organic fertilizers has been increased from ₹45 crore to ₹150 crore. 

A noteworthy aspect is that the Finance Minister has refrained from reiterating old commitments such as doubling farmers' income, promoting natural farming, and zero-budget farming.