Budget 2025: No fuel for the ‘first engine of development’?

When finance minister Nirmala Sitharaman presented this year’s Budget and called agriculture ‘the first engine of development’, it might momentarily have given heart to India’s beleaguered farmers.

The Economic Survey this year also projected that agriculture would grow faster than other sectors.

Yet, while the dependence on farming has only grown since the Covid-19 pandemic, it seems after reviewing the budget figures that the government expects this engine to run without any fuel.

The farmers had four key expectations from this budget, which were recorded in a parliamentary committee report released in November 2024: First, a legal guarantee for minimum support price (MSP) to ensure fair crop prices. Second, a plan to liberate farmers from the burden of mounting debt. Third, an increase — adjusted for inflation — in the annual Rs 6,000 assistance under the PM-Kisan scheme. Fourth, an expansion of the Pradhan Mantri Fasal Bima Yojana (the crop insurance scheme).

All these four expectations were crushed, unfortunately.

Forget a legal guarantee — there wasn’t even a mention of MSP in the budget speech. Instead, the minister merely promised government procurement of three pulses — arhar (pigeon pea), masoor (red lentil) and urad (black gram) — not to secure fair prices for farmers but because these crops are heavily imported. The budget for the crop procurement scheme known as AASHA remains unchanged. There is no sign of concern for the procurement of other crops or ensuring farmers get fair prices, even as a good monsoon this year is expected to boost production and lower prices.

According to the government, every farming household in India is burdened with an average debt of over Rs 92,000. Over the last decade, the government has waived corporate loans worth Rs 14 lakh crore through various schemes. But when it comes to farmers, there is no sign of debt relief.

Yes, the credit limit on Kisan credit cards has been raised from Rs 3 lakh to Rs 5 lakh, but even this lacks sincerity as the overall budget allocation for agricultural credit subsidies remains unchanged.

Despite much discussion, the government has once again failed to increase the PM-Kisan assistance beyond the Rs 6,000 set six years ago. In the meantime, farming costs and household expenses have gone up 1.5 times. Today, the real value of that Rs 6,000 has shrunk to around Rs 4,000. It seems the government will wait for another election before it makes any tweaks.

As for crop insurance, instead of expanding the scheme, the government has cut budgetary allocation from last year’s Rs 15,864 crore to Rs 12,242 crore.

With this indifference towards agriculture, the sector’s share in the central budget continues to shrink every year. When the PM-Kisan scheme was announced in 2019, agriculture’s share of the total budget crossed 5 per cent for the first time. But since then, it has only declined: 4.83 per cent in 2020, 4.05 per cent in 2021, 3.68 per cent in 2022, 3.08 per cent in 2023, 3.09 per cent in 2024 and now 3.06 per cent in 2025. 

The slow strangulation of MGNREGA continues this year as well.

But as usual, the finance minister announced new schemes for agriculture. The most prominent was the PM-Dhan Dhanya Agricultural Scheme, aimed at strengthening agriculture in 100 most backward districts.

The claim is that this will benefit 1.7 crore farmers — however, the budget does not allocate a single rupee for it.

Several national missions were announced for pulses, cotton and horticulture — but the allocated funds are so meagre that they are unlikely to have any real impact. A mere Rs 100 crore has been earmarked for the makhana (fox nut) board.

Year after year, experience has shown that such announcements often remain on paper. Five years ago, the Budget grandly declared an investment of Rs 1 lakh crore under the Agriculture Infrastructure Fund. Now, with the five-year period over, only Rs 37,000 crore has been allocated — and the actual spending is another matter entirely.

The finance minister didn’t even mention this in her speech, much like the government’s silence on its old promise of doubling farmers’ income.

Last year’s Budget announced plans of a supply chain for vegetable production and a new national cooperative policy — neither has materialised.

The promise of digitising land records has barely progressed, with just 9 per cent of the work completed. The government had promised to deploy 15,000 ‘drone didis’, but the actual number hasn’t even reached 1,000.

Given the disappointments of this Budget, it’s hardly any surprise that farmer leaders have dismissed it as the same old story. On 5 February, the Samyukt Kisan Morcha staged a protest — again.