India’s Union Budget 2025 has placed agriculture at the centre of the nation’s economic narrative, allocating an unprecedented ₹1.72 lakh crore — a 12 per cent hike from the previous year. Beyond the numbers, however, lies a strategic pivot that seeks to address the sector’s deep-rooted challenges of low productivity, volatile input supply, and limited market access.
With agriculture sustaining nearly half the population’s livelihood, the stakes could not be higher. The key question remains: will these measures be enough to transform Indian agriculture into a globally competitive, resilient powerhouse? In a developing economy like India, allocating over ₹1 lakh crore—or leaving it inadequately utilised—demands careful re-evaluation.
At a time when robust agricultural growth underpins broader socio-economic progress, every rupee must be strategically deployed to maximise impact. By assessing whether these funds are optimally channelled — be it into infrastructure, credit access, or technology adoption — the government can ensure this massive financial infusion delivers tangible, long-term benefits. Such recalibration not only enhances transparency and accountability but also ensures that India’s limited resources are used judiciously to propel equitable and sustainable development.
Cornerstone
A cornerstone of the budget is the PM Dhan Dhanya Krishi Yojana (PMDDKY), built upon the idea of aspirational districts and designed to uplift 100 low-productivity districts. This program rightly prioritises mechanisation, improved irrigation, and digital tools to equip farmers with modern techniques. The ambition to raise crop yields — particularly in pulses, oilseeds, and cereals— reflects the urgent need to cut imports and bolster food security. While parallels with the Aspirational Districts Programme show a proven track record, the real determinant of success will be robust on-ground implementation and the use of real-time data to recalibrate strategies.
Ensuring fertiliser availability remains critical for agricultural growth, and the budget’s push toward domestic production is embodied in the new establishment in the Namrup urea plant in Assam. Reducing import dependence could mitigate price volatility and supply disruptions. Yet, focusing solely on synthetic fertilisers is a partial fix. Long-term sustainability requires a multi-pronged approach—one that embraces bio-fertilisers, micronutrients, and soil health management to strike a balance between productivity and environmental stewardship.
The decision to raise the Kisan Credit Card (KCC) limit from ₹3 lakh to ₹5 lakh is a welcome step toward bridging the credit gap. Smallholder and marginal farmers, often excluded from formal lending channels, stand to benefit the most—provided that the lending process is streamlined and fintech solutions are leveraged to extend reach. Additionally, the programme will be part of the Bharatnet Project. As of December 2024, 6.92 lakh kilometres of optical fibre cable has been laid, with 2.14 lakh gram panchayats now service-ready. This includes solutions such as satellite connections for remote areas, signal a push for deeper digital integration. This connectivity can revolutionise market access, enable real-time crop advisory, and facilitate e-commerce for farm produce—key elements in driving rural prosperity.
Overlooked
Potential and oversight fisheries, as part of the burgeoning “blue economy,” benefit from the government’s focus on infrastructure and sustainability measures in India’s Exclusive Economic Zone. But equally crucial sectors like dairy and livestock, contributing significantly to GDP, appear to lack dedicated national policy emphasis. Investments in breed improvement, disease control, and feed quality could substantially boost yields and farmer incomes. Without such targeted support, India risks falling behind in a sector that can underpin both nutritional security and economic growth.
Despite the urgent need to move up the value chain, the food processing sector remains relatively overlooked in this budget. There is an enormous opportunity for India to capture higher global market share in processed fruits, vegetables, and other agribased products. Prioritising the Ministry of Food Processing Industries, funding cold chain logistics, and incentivising private sector participation would not only stabilise farmer incomes but also reduce wastage and enhance export competitiveness.
Charting a resilient path forward
In an era of climate uncertainties and global market fluctuations, the real game-changer for Indian agriculture lies in climate-resilient practices, efficient water management, and technology adoption such as AI-driven soil analytics. The increased allocations for digital infrastructure and agtech labs are steps in the right direction but require unwavering political will, multistakeholder collaboration, and substantial awareness campaigns to ensure widespread adoption by farmers.
Ultimately, the vision of a self-reliant, export-competitive agricultural sector hinges on execution. Strong coordination between the central and state governments, transparent governance, and partnerships with multilateral banks and private players will be vital. The allocations made in Budget 2025 signal ambition and intent. Whether these reforms translate into tangible gains for farmers—and propel India toward the status of a global agricultural leader—will depend on how effectively policy meets practice in the fields and farms of the nation.
The author is Partner and Food Processing Industry Leader at Grant Thornton Bharat