As the Union Budget 2026 approaches, expectations are building around the government’s plans for agriculture, a sector increasingly seen as a driver of economic growth rather than just a recipient of welfare
support.
Policymakers and industry leaders alike argue that the coming Budget could mark a turning point in repositioning agriculture at the centre of India’s medium-term growth strategy.
Agriculture employs nearly 45 per cent of India’s workforce but contributes less than one-fifth to the country’s gross value added, highlighting long-standing productivity and structural challenges.
Experts believe the 2026–27 Budget offers an opportunity to bridge this gap by focusing on productivity, value addition and resilience.
“Agriculture is no longer viewed only through a welfare lens. It is emerging as a credible engine of growth that can support productivity, employment, rural demand and economic resilience,” said Amit Vatsyayan, Leader, GPS Agriculture, Livelihood, Social and Skills at EY India.
India’s agriculture market is projected to expand from Rs 31 lakh crore in FY25 to Rs 38 lakh crore by FY30, growing at an annual rate of about 4 per cent.
With agriculture and allied sectors playing a key role in consumption-led growth, experts say targeted budgetary support could significantly strengthen rural incomes and overall economic momentum.
Key Trends Shaping Budget Expectations
Climate-resilient and sustainable farming is expected to be a major focus, with industry leaders calling for higher investment in green infrastructure.
Scaling up climate-resilient irrigation and sustainable farming practices is seen as critical to protecting farm incomes against weather shocks.
Digital agriculture is another priority area, with agritech solutions moving beyond pilot stages.
Stakeholders are pushing for deeper digitisation, wider technology adoption and greater online participation by farmers to improve efficiency and market access.
Policy thinking is also gradually shifting from yield-centric approaches to nutrition-led agriculture.
The use of biofortified seeds and nutrition-focused farming practices is gaining attention as the government looks to link agricultural growth with better health outcomes.
Persistent Challenges
Despite its scale, agriculture continues to grapple with low productivity and limited value addition. Experts note that the mismatch between employment share and economic contribution reflects deep structural issues.
Post-harvest losses remain a major concern due to inadequate storage, cold-chain networks and processing facilities.
In addition, access to formal credit and crop insurance is uneven, particularly for small and marginal farmers, strengthening the case for a more tailored rural lending framework.
What Last Budget Delivered
The previous Union Budget placed strong emphasis on improving productivity, seed innovation and sustainable agriculture, while positioning the sector as a growth engine.
It also continued support for digital agriculture and public digital infrastructure, along with allied sectors and climate-resilient practices. However, experts say scaling up and effective execution remain critical.
What The Sector Expects This Time
Industry leaders are calling for increased investment in green infrastructure, irrigation and value-chain modernisation through public-private partnerships.
“Productivity gains must go hand in hand with modernising agricultural value chains,” Vatsyayan said.
There is also a strong push for faster implementation of AGRISTACK as a digital public good to integrate farmer data, credit, insurance and market access, which could lower transaction costs and attract private investment.
Additionally, stakeholders are seeking a differentiated rural credit framework and a stronger policy thrust towards nutrition-led agriculture.
“India’s next agricultural leap must move beyond yield to nutrition as an outcome,” said Prateek Rastogi of Better Nutrition.
As Finance Minister Nirmala Sitharaman prepares to present the Budget, the agriculture sector will be closely watching whether these expectations translate into concrete policy measures and investments.
