The Union Budget 2025-26 has brought forth various measures aimed at enhancing the agricultural landscape in India. However, the effective implementation of these measures remains a concern, particularly for farmers. This article delves into the budgetary measures, their implications on farm incomes, and the overall impact on rural development.
The budget introduced a new scheme intended to boost crop productivity and improve credit access in 100 under-performing districts. However, this initiative is devoid of separate funding and relies on converging existing national missions. The missions focused on cotton, pulses, fruits, vegetables, and high-yielding seeds received a meager ₹2,100 crore, which may not suffice for significant improvements.
Moreover, the flagship crop insurance scheme witnessed a cut of ₹3,600 crore, leaving farmers more vulnerable to risks associated with climate change and unpredictable weather patterns. While funding for agricultural research saw a slight increase of ₹300 crore, the budget overall appears to have limited focus on farmers' welfare.
Between 2019 and 2024, farm wages and productivity faced a downward spiral, a trend that remains unaddressed in the current budget. Farmers are still compelled to sell essential crops like soybean, groundnut, and pulses below the Minimum Support Price (MSP). Although the government plans to procure three crop varieties under the newly announced MSP mission, the increase in allocation for the PM-AASHA scheme—a support system for farm-gate prices—was just ₹500 crore, which is modest at best.
Given the lack of substantial budgetary provisions, there is little immediate promise for enhancing farm incomes, particularly for small and marginal farmers.
The budget introduced the Prosperity and Resilience Scheme aimed at equipping rural youth with necessary skills to mitigate distress migration. However, the allocation for this program remains insignificant. The Mahatma Gandhi National Rural Employment Guarantee Scheme (MGNREGS) received ₹86,000 crore, a figure unchanged from the previous year. This stagnation reflects a decline in real terms due to inflation, effectively diminishing rural wage growth and limiting the purchasing power of rural households.
Funding for the Pradhan Mantri Gram Sadak Yojana remains stagnant at ₹19,000 crore. The rural housing program witnessed a marginal increase of ₹332 crore, leading to a total budget of ₹54,832 crore for 2025-26. However, after accounting for inflation, these allocations indicate a real decline. Furthermore, the budget for the rural drinking water mission decreased from ₹70,000 crore in 2023-24 to ₹67,000 crore for 2025-26.
Overall, the budgetary outlay for rural development schemes has remained constant at ₹2.6 trillion, failing to provide immediate relief to rural areas grappling with inflation and stagnant incomes.
The ₹1 trillion tax relief announced in the budget is expected to stimulate consumer demand, particularly among middle-class households, enhancing spending on discretionary goods and services. Yet, many rural families may utilize this relief to settle loans, which could limit immediate consumption impacts. In rural India, suppressed MSP support and escalating production costs resulting from weather variability may further dampen demand.
Additionally, a predicted spike in temperatures during the harvest season could adversely affect agricultural output and prices, exacerbating challenges for rural demand and farmers' incomes.
Q1. What are the key measures taken in the Union Budget 2025-26 for farmers?
Answer: The budget introduced a scheme for crop productivity and credit access in under-performing districts, but lacks separate funding, relying on existing missions. Funding for key agricultural initiatives remains insufficient.
Q2. How does the budget address the issue of farm incomes?
Answer: The budget has not adequately addressed declining farm wages and productivity. Farmers continue to sell crops below MSP, and the increase in MSP support is limited, leaving small farmers particularly vulnerable.
Q3. Are non-farm incomes being considered in the budget?
Answer: The Prosperity and Resilience Scheme aims to skill rural youth but lacks significant funding. MGNREGS funding remains unchanged, which limits real wage growth and purchasing power for rural households.
Q4. What is the status of rural development schemes in the budget?
Answer: The allocation for key rural development schemes has stagnated, with minimal increases that do not account for inflation, providing no immediate relief to rural communities.
Q5. How will consumer demand be affected by the budget measures?
Answer: While tax relief may boost consumer demand among urban households, rural families may prioritize loan repayments, limiting the overall positive impact on consumption.
Question 1: What is the total allocation for the Pradhan Mantri Gram Sadak Yojana in the Union Budget 2025-26?
A) ₹19,000 crore
B) ₹54,832 crore
C) ₹67,000 crore
D) ₹2.6 trillion
Correct Answer: A
Question 2: By how much was the funding for the crop insurance scheme cut in the 2025-26 budget?
A) ₹2,100 crore
B) ₹3,600 crore
C) ₹500 crore
D) ₹86,000 crore
Correct Answer: B
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