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India Will Increase Its Farm Budget By More Than 15%, The Most In Six Years

Modified On Jan 24, 2025 10:08 AMBy Shristi Nagar

To raise rural incomes and reduce inflation, the government plans to increase agricultural spending by 15% to $20 billion in the 2025–2026 budget.

India Will Increase Its Farm Budget By More Than 15%, The Most In Six Years

Key Highlights 

  • Agriculture spending to rise by 15% to $20 billion, the largest hike in six years.

  • Boost production of pulses, oilseeds, vegetables, and dairy products.

  • Export restrictions on select agricultural commodities, including wheat, continue to curb rising food prices.

  • $9 billion investment is planned over the next five years to enhance the fishing industry.

According to two government sources, India intends to raise farm spending by roughly 15% to $20 billion in the upcoming budget, the largest rise in six years, to raise rural incomes and reduce inflation.

According to the sources, the extra funds would be used to improve the production of pulse crops, oilseeds, vegetables, and dairy products, as well as to produce high-yielding seed varieties and expand storage and supply infrastructure.

Since they were not permitted to speak to the media, the sources requested anonymity.

Emails requesting responses from India's agriculture and finance ministries were not answered.

India, the second-largest producer of rice, wheat, and sugar in the world, has struggled with rising food costs, which in October 2024 jumped beyond 10% annually. Since then, they have loosened and have averaged more than 6% during the past ten years.

New Delhi has extended the duty-free import policy for some pulse varieties and placed export limitations on agricultural items, such as wheat, to slow price increases.

According to people involved with budget talks, the total amount allotted for agricultural and related operations in the 2025–26 fiscal year beginning in April is probably going to rise to roughly 1.75 trillion rupees ($20.2 billion), up from 1.52 trillion rupees in the current fiscal year.

According to one of the sources, this includes an increase in the agricultural ministry's budget from 1.23 trillion rupees to 99.41 billion rupees, which is now spent on research to create new types.

According to the second source, one of the budget's top focusses is agriculture, which Finance Minister Nirmala Sitharaman is scheduled to unveil on February 1.

According to the same source, the government wants to boost local supplies while also creating enough excess to boost farm exports from the present $50 billion to $80 billion by 2030.

Nearly 45% of India's workforce is employed in agriculture, which also accounts for 15% of the country's $3.5 trillion GDP.

According to the second source, the budget is also anticipated to expand crop insurance and raise the cap on subsidised farm loans from 300,000 rupees per farmer to 500,000 rupees.

According to these sources, the government intends to invest $9 billion in the fishing industry over the next five years and increase pulse production to 30 million metric tonnes by 2030.

Through 2027, the proposals also provide for offering food processing companies incentives of 109 billion rupees.

According to independent farm policy analyst Devinder Sharma, the anticipated announcements will not adequately address more fundamental problems including stagnating farm earnings and low productivity.

"The government should increase direct transfers to farmers and improve procurement of crops to stablise incomes and ensure fair consumer prices," he stated.

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