As India approaches Union Budget 2026, agriculture stands at a crucial crossroads. The sector contributes approximately (17.8 per cent) to the national GDP and provides livelihood to more than (46.1 per cent) of the workforce, yet it faces deep-rooted structural inefficiencies. Persistent challenges such as low agricultural productivity, inefficient water use, fragmented land holdings and limited market integration have hindered development despite decades of policy interventions.
Incremental plans and short-term relief measures have reached their limits. Indian agriculture now needs architecture-level reforms, an integrated, outcome-driven framework that aligns productivity, sustainability, farmer income and global competitiveness. Budget 2026 presents an important opportunity to begin this transformation.
Redesigning subsidies: from consumption to outcomes
India’s agricultural subsidy system, long designed to promote access, has inadvertently begun to reward excess. Subsidies on fertilizers, electricity and irrigation have led to input-intensive agricultural practices that stress soils, deplete groundwater, reduce produce quality and increase costs, often without providing proportionate gains in productivity or farmer income. What started as support has, in many cases, become structural disability.
Budget 2026 provides a timely opportunity to correct this course by moving from consumption-based subsidies to efficiency-driven incentives. A phased transition to support linked to Packages of Practice (POPs) can realign public spending with measurable outcomes such as higher yields, improved soil health and optimal water use. Performance linked incentives encourage farmers to adopt scientifically sound practices rather than maximizing input use.
Performance-based support has the dual benefit of directly improving agricultural profitability as well as conserving critical resources. Mechanization subsidies, in particular, should be given through Direct Benefit Transfer (DBT) and limited to FMTTI or BIS-approved equipment, do away with state-wise, department-wise, scheme-wise product approval processes, but retain the role of the state government in selection of beneficiaries, ensuring that public funds translate into reliable, high-impact technology on the ground. Such targeting not only improves outcomes but also reduces leakages and increases accountability in the subsidy ecosystem.
Integrated Water-Soil-Climate Management
The future of Indian agriculture will be decided not by how much it produces, but by how wisely it manages its natural resources. Water, soil, seeds and climate resilience are deeply interconnected, yet policy interventions in these areas have traditionally been designed and implemented separately. This fragmented approach has limited impact at a time when resource strains and climate uncertainty are intensifying.
Budget 2026 should break down these silos by adopting a mission-mode, systems-based approach to water-soil-climate management. At the core of this transformation must be accelerated investment in next generation seeds, varieties designed to produce higher yields with less water consumption, less nutrient dependence and minimal chemical inputs. Equally important is the promotion of scientific package of practices and diverse crop rotations, which play an important role in restoring soil organic matter, improving nutrient balance and reducing the risks associated with monocropping. Additionally, the government should allow agri-businesses to set up model farms to show and prove to farmers the effectiveness of new seed, machinery and packages of practices.
When aligned under a single framework, these interventions can deliver mixed benefits: healthier soils, sustained groundwater levels, better quality yields, and farms better equipped to withstand climate volatility. An integrated resource strategy is not just an environmental imperative, it is also necessary to secure long-term productivity and livelihoods of farmers in a climate-disrupted future.
Digitized Land Records: A Fundamental Reform
No agricultural transformation can be successful without attention to land ownership clarity. Universal, digitized land records with legally enforceable titles are essential to unlock the sector’s potential.
Clear land ownership enables farmers to access affordable institutional credit, make long-term investments, and participate more effectively in modern value chains. They also enable data-driven policymaking, precise beneficiary targeting and transparent subsidy distribution.
Without widespread land digitization, farmers remain dependent on informal finance, land values remain depressed, and the impact of other budgetary interventions is significantly reduced. Budget 2026 should set out clear timelines and accountability mechanisms for nationwide land records reform.
The result of this digitalization is data collection for each stage of the crop from land preparation, sowing, pest and disease management to harvesting; And then sharing this data with appropriate details with stakeholders to plan their support or intervention. This will also help farmers in choosing the crop or variety; To harvest and sell your produce.
Technology-enabled supply chain and market access
Post-harvest losses remain the biggest constraint on farmers’ income and national food security. A significant portion of agricultural produce is lost every year due to inadequate storage, inefficient logistics and lack of standardized grading. The farmer or the country cannot afford these losses and it can be corrected by policy changes.
Budget 2026 should accelerate investment in technology-enabled supply chains, including purity of seeds and then on-farm production, standardized grading, packaging, modern storage, traceability systems and integrated logistics. These interventions can rapidly reduce wastage, improve farmgate price realization and unlock higher value for farmers. Strong supply chains will also enhance India’s export readiness by ensuring consistent quality and compliance with global standards.
Policy sustainability for global competitiveness
In global markets, consistency is as important as quality. Frequent changes in policies, whether residue standards, exports, or certification, undermine credibility and discourage long-term investment. Budget 2026 should signal a clear commitment to a stable, multi-year policy framework, enabling producers, supply chain intermediaries and exporters to confidently plan, adopt technology and integrate seamlessly into global value chains.
Towards an integrated improvement architecture
The true measure of Budget 2026 will lie in its coherence. Subsidy reforms, natural resource management, land digitalization, supply chain modernization and global market alignment should work as interconnected levers, not standalone initiatives. If implemented cohesively, these reforms can stabilize farm incomes, bring stability to everyday farming practices and position India as a globally competitive food producer. Indian agriculture no longer needs incremental course correction; It requires a decisive structural reset. Budget 2026 has the potential to deliver exactly that.
The author is Chairman of Kisancraft Limited
Published on January 25, 2026
