Expectations from Budget 2026 for agri and allied sectors

Building on a Legacy of Support for Farmers

India's agriculture sector has long been a cornerstone of economic stability, employing nearly half the workforce despite contributing around 18% to the gross value added.

Over the past five years, budgets have consistently prioritized this vital area, with Finance Minister Nirmala Sitharaman describing it as the "first engine" of development.

Key initiatives like the Agriculture Infrastructure Fund, expanded digital marketplaces such as e-NAM, and micro-irrigation support gained momentum during pandemic recovery.

Allocations for the agriculture ministry climbed to about Rs 1.25 lakh crore by 2023-24, including massive disbursements under PM-Kisan Samman Nidhi that reached over 11 crore farmers through direct transfers totaling more than Rs 2.8 lakh crore.

The following year saw a 4.5% rise to Rs 1.40 lakh crore, with allied sectors showing even stronger double-digit growth, fueling productivity through better land development, irrigation, and water harvesting projects.

Key Expectations for Income, Credit, and Resilience

As Budget 2026 looms, expectations center on sustaining and expanding income support mechanisms while addressing pressing needs like climate resilience and employment.

Farmers and experts hope for hikes in subsidised credit limits, such as expanding Kisan credit cards, alongside boosts to productivity missions and rural job programs.

There's a strong call for climate-smart practices, including more funding for micro-irrigation, watershed management, and renewable energy in farming to combat erratic weather patterns.

Allied sectors like livestock and fisheries seek subsidised quality feed, expanded veterinary training to meet shortages, and capital subsidies for small dairy units, especially for women entrepreneurs.

Budget 2026 presents an opportunity to recalibrate agricultural policy from being production-centric to market-, quality- and innovation-oriented, ensuring real earnings benefits reach farmers' doorsteps, said Ajay Kakra, Leader – Food and Agriculture at Forvis Mazars.

These steps aim to stabilise incomes, enhance nutritional security, and reduce overreliance on water-intensive crops through diversification into horticulture, pulses, and oilseeds.

Push for Technology, Exports, and Self-Reliance

A major shift towards innovation and global competitiveness is on the horizon, with agri-tech leaders urging investments in digitisation, R&D, and export infrastructure.

Proposals include creating export-centric clusters, modern pack houses, port-linked cold chains, and specialised programs for agri-SMEs in processing and logistics to spur rural employment and value addition.

Missions like the National Mission on Edible Oils and Aatmanirbharta in Pulses, already backed by substantial outlays, need reinforcement to achieve self-sufficiency—targeting oilseed output to double and curbing imports that currently cover 60% of edible oil needs.

Digital tools such as AGRISTACK and the Digital Agriculture Mission are seen as game-changers for better market linkages, price discovery, and trade facilitation.

Strengthening farmer producer organisations with credit guarantees and market strategies could empower smallholders, while rural credit reforms tailored to actual incomes would accelerate tech adoption and supply chain efficiencies.

Industry voices also highlight the need to shift surplus workforce from farms to productive agri-ancillaries like processing and horticulture, supported by skilling and infrastructure for storage and transport.

In summary, Budget 2026 holds promise for transforming agriculture through sustained income aids, climate adaptations, tech-driven growth, and export ambitions, positioning the sector as a robust growth engine for India's rural economy.