India Unveils New Initiative to Boost Agricultural Productivity in 100 Districts
The Indian government is set to launch an ambitious program to enhance farm productivity in 100 districts, as announced by Finance Minister Nirmala Sitharaman during the budget presentation for 2025-26. This initiative comes alongside plans to improve irrigation facilities and increase the credit limit available to farmers.
The agricultural sector plays a crucial role in India’s economy, providing jobs for nearly half the population and contributing about 16% to the country’s GDP. Despite challenges like the COVID-19 pandemic, this sector has shown resilience, achieving a compounded annual growth rate (CAGR) of 5.4% since the 2019-20 fiscal year.
Sitharaman emphasized the importance of agriculture as a key driver of growth and announced the PM Dhan Dhanya Krishi Yojana, which aims to support areas with lower productivity and crop intensity. This program is expected to benefit around 10.7 million farmers and will focus on creating sustainable job opportunities in rural areas, making migration to cities more of a choice rather than a necessity.
The government is also introducing a six-year mission to enhance pulses production for self-sufficiency and a five-year program aimed at increasing cotton production. The budget for agriculture and related activities has seen a significant increase of 22% from the previous fiscal year, amounting to ₹1.71 lakh crore.
While agricultural funding had experienced a slight decrease of 3.5% in the 2024-25 budget, the allocation for the Ministry of Agriculture has been reduced by 2.5% to ₹1.38 lakh crore for the upcoming fiscal year. Notably, the capital expenditure budgeted has decreased to ₹92.2 crore.
Reflecting on the success of previous initiatives like the Aspirational Districts Programme, Sitharaman stated that the new agricultural program will work closely with state governments. The initiative will focus on regions known for low productivity and insufficient access to credit.
Historically, the government made significant strides toward self-sufficiency in pulses by encouraging farmers to expand cultivation by 50%. However, increased consumption has led to higher demand over time. As part of this new initiative, the limit for subsidized loans for farmers will rise from ₹3 lakh to ₹5 lakh.
According to V Anantha Nageswaran, the Chief Economic Adviser, the Indian economy is expected to expand at a rate below 7% in the next fiscal year. He advised implementing more reforms in agriculture and labor sectors to facilitate stronger growth.
Within agriculture, high-value sectors like horticulture, livestock, and fisheries have emerged as key contributors. The fisheries sector, in particular, has experienced impressive growth, with a CAGR of 13.67% from 2013-14 to 2022-23.
Other significant announcements in the budget include the establishment of a new fertilizer plant in Assam to enhance urea production, and a program aimed at boosting horticulture. In Bihar, a board dedicated to makhana (fox nuts) will be created to improve production and marketing.
Additionally, the government previously introduced the Digital Agriculture Mission to promote innovative technologies in the agricultural sector. The Economic Survey has indicated that investments in agricultural research have a substantial return on investment, contributing significantly to food security.
Despite positive trends, the agricultural sector remains vulnerable to climate-related challenges, with only about 55% of the cultivable area equipped with irrigation.
The Economic Survey highlighted the need for better market access for farmers, mechanisms to hedge against price risks, and policies that encourage sustainable farming practices. Experts believe that the upcoming initiative could pave the way for creating more productive agricultural regions, particularly in underserved areas, but it will require adequate funding and support.
With a growth rate of 3.5% recorded in the latter half of 2024-25, the agricultural sector’s Gross Value Added (GVA) has increased significantly, indicating a positive trajectory for future growth.
