The Indian government has allocated ₹1,62,671 crore to agriculture and allied activities in its Union Budget for 2026-27, marking a strategic shift toward high-value crops, technological modernization, and enhanced farmer income through cooperative reforms.
Technological Transformation and “AgriStack” At the heart of the sector’s modernization is the Bharat-VISTAAR initiative. This program seeks to integrate AgriStack portals and the Indian Council of Agricultural Research (ICAR) packages on agricultural practices with Artificial Intelligence (AI) systems. The government identifies cutting-edge technologies as “force multipliers” for better governance and productivity as part of its broader “India’s Reform Express”.
Focused Productivity in High-Value Sectors
The budget introduces dedicated programs to rejuvenate low-yielding segments and promote high-density cultivation:
- Horticulture: A specialized program will focus on expanding high-density cultivation for walnuts, almonds, and pine nuts, while rejuvenating older orchards.
- Animal Husbandry: To facilitate rural job creation, the government announced a loan-linked capital subsidy support scheme for establishing private veterinary and para-vet colleges, hospitals, and breeding facilities.
- Fisheries: The budget plans the integrated development of 500 reservoirs and Amrit Sarovars. It aims to strengthen coastal value chains and enable market linkages for start-ups and women-led groups through Fish Farmer Producer Organizations (FPOs).
- Specialty Crops: Dedicated initiatives were launched for Sandalwood, Cashew, Cocoa, and Coconut to enhance productivity and facilitate post-harvest processing.
Tax Incentives & Cooperative Support
To enhance farmer income and reduce costs, the government proposed several tax-driven measures:
- Fisheries: Fish catches by Indian vessels in the Exclusive Economic Zone (EEZ) or high seas will be duty-free.
- Cooperatives: Primary cooperative societies engaged in producing cattle feed and cotton seed will now be eligible for specific deductions.
- Dividends: The budget allows inter-cooperative society dividend income as a deduction under the new tax regime to the extent it is distributed to members.
- Furthermore, notified national co-operative federations will receive tax exemptions on dividend income from specific investments through early 2026.
Strategic Outlook
- The agricultural highlights are a component of the government’s “Viksit Bharat” vision, which targets a sustained economic growth rate of approximately 7%. The budget emphasizes “Action Over Ambivalence” and “People Over Populism,” focusing on enhancing productivity and building resilience to volatile global dynamics.
Fiscal Context & Future Targets
While increasing sector-specific outlays, the government maintained a path of fiscal prudence, estimating the fiscal deficit at 4.3% of GDP for 2026-27. The long-term objective remains reaching a debt-to-GDP ratio of 50±1 percent by 2030. By prioritizing public investment and structural reforms, the government aims to transform the agricultural potential into performance, ensuring every rural community has access to resources for meaningful participation in India’s path to prosperity.
The budget also underscored the importance of allied activities such as livestock and fisheries to supplement crop incomes, signaling a long-term strategy aimed at building resilient, diversified and sustainable farming livelihoods amid climate and market volatility.