By Madhuparna Bhowmick, Senior Director and Rajarshi Ghosh, Joint Director and Head of Department of Economic Affairs and Policy, Indian Chamber of Commerce.

Union Budget 2025-26 which was presented on February 1, 2025 has focused on structural and medium to long term issues in the agriculture sector. These reforms can ensure that the agro sector remains a major engine of growth, raising real farm income over time while ensuring food and nutrition security. The aim of these measures is to make agriculture an attractive and productive sector to work on and remove disguised unemployment and minimise rural to urban migration. This article focuses on understanding the implications of the agro announcements.

Rationale for improving agro productivity through Structural Measures

Since 2014-15, there has been a mild growth of crop production at a CAGR of 2.1 per cent. If we study major crops, we find that cotton has been stagnant while cereals have shown slightly higher growth. Pulses grew more rapidly but with more volatility and oilseeds production has expanded. Only some of this increase in crop production resulted from area expansion. Our research shows that the gross cropped area increased somewhat for rice, pulses and oilseeds. It was largely stagnant for wheat and cotton and actually declined for traditional cereals. However, yield growth was fastest for cereals, much more than rice and wheat. And yield is uneven area wise too. All these bring us to the need of structural measures to boost agro productivity across the country specially in low yield districts and hence comes the need of structural transformation in agriculture. Basically the second Green Revolution has to be pan India and not restricted to a few States.

I) PM Dhan-Dhaanya Krishi Yojana: The Yojana mainly focuses on developing agricultural district programmes on the lines of the Aspirational Districts Programme (ADP), a Government of India programme aiming to develop some of the country’s most under-developed districts. Nearly two decades ago, in a study,  we had mentioned to the government that there are many developmental schemes and all are not evenly utilised round the year. And if we could merge some of the small schemes a mega developmental scheme can be created and through this scheme the same has been done. Through the convergence of existing schemes and specialised measures, this programme promises to cover 100 districts with low farm productivity, post-harvest losses, inadequate access to irrigation and credit, absence of crop diversification and absence of environmentally sustainable cropping practices.

In short, the scheme objectifies; enhancing agricultural productivity; adoption of crop diversification and sustainable agriculture practices; augmentation of post-harvest storage at the panchayat and block level;  improving irrigation facilities and facilitation of the availability of long-term and short-term credit.

The introduction of PM Dhan Dhaanya Krishi Yojana is expected to have a significant impact on the agricultural landscape in India impacting the lives of 17 million farmers.

2) Building Rural Prosperity and Resilience: A comprehensive multi-sectoral ‘Rural Prosperity and Resilience’ programme would be launched in partnership with the States to address underemployment in agriculture through skilling, investment, technology, and invigorating the rural economy. The prime goal of the announcement is to generate ample opportunities in rural areas so that farming becomes an attractive occupation for one and all. And the scheme wants to work in alignment with the federal structure of India.

Key Focus Areas include Skilling, Investment and Technology to revitalise the Rural Economy; Modernising Agriculture with improved productivity and warehousing; Focus Beneficiaries: Rural women, young farmers, marginal and small farmers and landless families; Implementation Methodology: Adoption of global and domestic best practices, technical and financial assistance from multilateral development banks and Target: 100 developing districts to begin with which would be different from the earlier 100 in the Dhan Dhanya Krishi Yojana.

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