The Union Budget 2026-27 allocates marginally more to agriculture and allied sectors, but critics say it neglects a sector vital for 42% of the workforce. Funding for key schemes like PM-KISAN has been reduced, and research allocations cut despite climate risks. This occurs as agricultural growth trails the overall economy.
India's Union Budget 2026-27 tells an uncomfortable story about the farm sector, which sustains livelihoods and food security but has quietly slipped from the center of economic planning. Agriculture employs nearly 42% of the workforce yet contributes only about 16% to GDP. This imbalance reflects stagnant productivity and a steady erosion of farm viability. The average size of operational landholdings has shrunk to 1.08 hectares, limiting economies of scale, mechanisation, and income growth. While the overall economy accelerates above 7%, agriculture is expected to grow at 3%.
Of the estimated Rs 53.47 lakh crore total outlay, agriculture and allied sectors receive Rs 1.62 lakh crore, only marginally higher than last year's Rs 1.58 lakh crore. The Ministry of Agriculture and Farmers' Welfare now accounts for just 2.62% of total budget expenditure, down from 3.46% in FY 2025-26 and 4.26% in FY 2021-22. Over four-fifths of the ministry's budget goes to four schemes: PM-KISAN, PM Fasal Bima Yojana, the Interest Subvention Scheme for Kisan Credit Cards, and PM-AASHA. The combined allocation for these has increased by just 0.2% over last year's revised estimates. PM-KISAN itself has been allocated Rs 63,500 crore, 15% lower than the Rs 75,000 crore in 2019-20, despite a sharp rise in input costs.
The high-value agriculture scheme, limited to select crops such as coconut, cashew, and cocoa, has been allotted a token Rs 350 crore. There is silence on the long-standing demand for a legal guarantee of MSPs. With only nominal MSP increases and declining cereal procurement, farmers are pushed further into market volatility. The PM Dhan-Dhanya Krishi Yojana, unveiled in the 2025-26 Budget for 100 low-productivity districts with an outlay of Rs 24,000 crore, was formally launched in October 2025 but receives not a single rupee. The Agriculture Infrastructure Fund of Rs 1 lakh crore, announced in 2020, has seen only Rs 66,310 crore sanctioned so far, with no fresh allocation this year. The fertiliser subsidy has been cut to Rs 1.7 lakh crore from Rs 1.86 lakh crore, without any alternative strategy.
The most worrying signal is the squeeze on agricultural research. Despite warnings about climate risks and the need for technology-driven farming, the Department of Agricultural Research and Education's allocation has been reduced to Rs 9,967 crore from Rs 10,281 crore last year. India already spends less than 0.5% of its agricultural GDP on R&D, well below the 1% benchmark. This cut reflects short-term fiscal thinking at the cost of long-term resilience. The writer is the Leader of Opposition and former Chief Minister of Haryana, who headed the AICC Working Group on Agriculture Production.
