Emphasizing which idea was the Union Budget 2026-27 presented? three duties, One of which focuses on fulfilling the aspirations of the citizens. However, a close reading of the budget documents raises an important question: does Budget 2026-27 actually reflect those commitments, especially towards India’s agriculture and allied sectors?
An examination of the budget data reveals a mixed and somewhat worrying picture. Expenditure on agriculture and allied activities decreased by ₹6,985 crore compared to the Budget Estimate (BE) as compared to the Revised Estimates for 2025-26. Allocation reduced from ₹1,58,838 crore (BE 2025-26) to ₹1,51,853 crore (RE 2025-26). Although BE for 2026-27 has seen an increase of ₹1,62,671 crore, the pattern of decline during the financial year (2025-26) indicates financial stress.
A similar trend is seen in several key schemes of agriculture, such as two major schemes: RKVY and KrishiOnati Yojana, experienced cuts of about ₹1,500 crore and ₹1,200 crore, respectively. Similar trends are also being seen in the Pradhan Mantri Krishi Sinchai Yojana (PMKSY), especially its watershed development component.
revenue constraints
One possible explanation for the decline in spending lies in revenue constraints. Government income (gross tax revenue) declined from ₹42,70,233 crore in BE 2025-26 to ₹40,77,772 crore in RE 2025-26. This decline appears to be linked to the policy choices made in the last budget cycle. The government introduced a tax exemption targeting the so-called “middle class”, exempting individuals earning up to ₹12 lakh annually from income tax liability. Although the move was intended to encourage consumption and provide relief to the middle class, the move is likely to reduce income tax collections in the short term (RE).
At the same time, the GST rate cut announced during the 56th GST Council meeting was designed to stimulate spending and support demand. Policy makers argued that higher consumption would ultimately boost overall revenue collection. Yet the RE for 2025-26 paints a different picture as income tax receipts have reportedly declined by Rs 11.26 lakh crore, while GST collections have also seen a decline. Lower than expected revenue collections inevitably hit government spending across several sectors, including health, education and rural development.
Fiscal discipline requirements further constrain spending decisions. The government tries to maintain fiscal deficit (under FRBM Act 2003); The deficit has been set at 4.3 percent in the budget estimate for 2026-27. Fiscal deficit reduction targets leave limited fiscal space, forcing policymakers to rationalize spending and delay or reduce allocations to many programs.
failing to reflect structural changes
Despite these fiscal constraints, the relative importance of agriculture within the Indian economy remains significant. According to the Economic Survey 2025-26, about 46.1 percent of the workforce depends on agriculture for livelihood. Over the past decade, the sector has recorded an average growth of about 4.45 per cent (2015-16 to 2024-25). Much of this expansion was driven by allied activities such as livestock, which grew at about 7.1 percent annually, and fisheries and aquaculture, which expanded at 8.8 percent.
Yet budgetary allocations do not fully reflect these structural changes. Schemes supporting livestock development, dairy infrastructure and animal health: including the Livestock Health and Disease Control Programme, have not seen a proportionate increase in funding in the Budget Estimates for 2026-27. The absence of increased financial support raises concerns, especially when policy discussions often emphasize diversification into allied sectors.
The situation presents a policy paradox. The Economic Survey highlighted the success of programs like RKVY and PMKSY in boosting agricultural productivity and resilience. However, when examined through the revised expenditure data, allocations to many of these programs have either stagnated or declined.
possibility of far reaching impact
For a country where a large section of the population still depends directly or indirectly on farming for employment and income, cuts or halts in vital agricultural programs could have far-reaching implications. Rural infrastructure, livestock health services and extension support are critical not only for productivity but also for resilience against climate vulnerabilities and market shocks.
In conclusion, while the BE for 2026-27 indicates a nominal increase in allocations for agriculture and allied activities, the pattern of lower revised estimates and stagnant plan funding indicates deeper structural challenges. Fiscal constraints, decline in revenue collections and deficit management priorities have shaped expenditure decisions. Nevertheless, given agriculture’s continued role as a major source of employment and a vital component of food security, stronger and more consistent public investment is essential. If the stated goal of the government is to meet the aspirations of citizens under the framework of the Three Duties, a more balanced approach towards agricultural financing is necessary.
The author is Chairman of Punjab State Farmers and Agricultural Workers Commission
Published on February 14, 2026
