The Budget for the agriculture sector is a balance of tactical measures aimed towards improving access to finance, liquidity in the sector, and levels of processing and logistics while continuing with the structural reforms that are expected to address the long-term challenges which the sector is grappling with.

In the face of stagnant growth in the rural economy, enhancing the credit limit to ₹5 lakh under Kisan Credit Card Scheme, and that for small and micro entrepreneurs who comprise a whopping majority of the MSME segment, is expected to give a significant boost to the farmers and food processing units in the country.

Announcement in repositioning the India Post Offices and Payment banks as logistics and financing enablers, by leveraging the existing network of 1.5 lakh rural post offices and around 2.4 lakh dak sevaks, is expected to establish better linkage and reduce post-harvest losses, which in turn will enable the overall output of the sector and enhance producer incomes. Modifications of the Udan Scheme (Krishi Udan) along with addition of new destinations is expected to drive better connectivity and faster movement of goods in a cost-effective manner.

Support to NCDC

The Budget has proposed tangible measures to boost exports and trade promotion through focus on creation of Bharat Trade Net, a digital public infrastructure, which is expected to streamline trade documentation and financing solutions. This will facilitate exports and boost farm incomes. Support to National Cooperative Development Corporation (NCDC) for promoting cooperative sectors is expected to address issues related to building scale, aggregation, processing and marketing, which the sector faces.

While these measures are expected to give a boost to the sector in the short run, the Budget has recognised the changing trends in consumption and has been pragmatic in allocating funds for building self-resilience in pulses . Focus on promotion of high value fruits and vegetables through cluster led approach has continued to remain one of the bulwarks in the Budget 2025. While India ranks 2nd largest globally in fish production and aquaculture, India’s share in seafood exports can significantly go up. To unlock the untapped potential of the marine sector, the Budget 2025 has rightfully focused on creating an enabling framework for harnessing the potential of the sector from the Indian inclusive economic zone and high seas with a special focus on the Andaman and Nicobar and Lakshadweep islands

PM- Dhana Dhanya Krishi Yojana is another new announcement in the Budget, which is expected to build on the developments in the Aspirational Districts Programme by enabling improved productivity of farmers, crop diversification, optimising post-harvest losses, access to better irrigation, and both long-term and short-term credit, benefitting around 1.7 crore framers.

Rural broadband efforts

Focus on innovation and adoption of technology has continued to remain as focus areas, as announced in the Budget, through measures such as creating a ₹10,000 crore Fund of Funds for promoting and encouraging startups. The growing necessities of addressing climate change, which affects productivity, and the requirement of R&D in the sector, are reflected in announcements related to creation of resources of startups, gene bank for encouraging research in high yielding, stress tolerant, climate resilient variants and institutes for promoting technology related to optimisation of post-harvest losses and food processing. Significant reduction in customs duty is expected to boost the telecom operators which in turn can potentially benefit BharatNet’s rural broadband efforts, making last mile connectivity more affordable and benefitting a large section of the farmers by enabling them to adopt digital technology.

Last but not the least, the Budget has taken cognisance of the fact that the contribution of the agriculture sector, which employs close to half of the country’s workforce, and has around 16 per cent share in the GDP, cannot be improved without creating rural enterprises.

Measures to boost the rural economy and announcements to build rural resilience programmes with support from Multilateral Funding Agencies is expected to address underemployment, averting forced migration from rural areas. This will also help in skilling rural youth and women, and play a catalytic role in uplifting the rural livelihoods and economy, ushering in Viksit Bharat.

The author is Partner, Food and Agribusiness, Management Consulting, BDO India. Views are personal.

Published on February 8, 2025