New Delhi, March 16 A parliamentary panel has recommended that the budget allocation for the agriculture department needs to be increased to deal with challenges such as climate change and market volatility.
A Standing Committee on Agriculture, Animal Husbandry and Food Processing presented a report on the agriculture department and farmers' welfare demands for grants (2026-27) in the Lok Sabha on Monday. It also advocated for subsidies on electric tractors and educational support for the children of small and marginal farmers.
The panel suggested integrating Artificial Intelligence (AI) with precision farming to optimize the use of inputs, such as water and fertilizers.
In its report, the panel emphasized the need for enhancing the budgetary allocation to the agriculture department.
"The Committee observed that the proportion of budgetary allocation made in favour of the Department in terms of the percentage of the total Central outlay for the years 2022-23, 2023-24, 2024-25, 2025-26 and 2026-27 stood at 3.14 per cent, 2.57 per cent, 2.54 per cent, 2.51 per cent and 2.44 per cent, respectively.
"This shows a continuous decline in the allocations to the Department as a proportion of Central Plan outlay," the report said.
The Department of Agriculture has been allocated Rs 1,30,561.39 crore for 2026-27 at the BE (budget estimate) stage, whereas the actual expenditure in 2024-25 was Rs 1,29,933.47 crore. This means an increase of only around Rs 627.91 crore, or simply put, a 0.5 per cent nominal growth, over a period of two years, and that too without factoring in the rate of inflation, the report mentioned.
The actual utilization of funds for 2025-26 as of January 31, 2026, is Rs 79,233.42 crore, with respect to RE (revised estimates), which stands at 64.37 per cent.
This clearly indicates that the department needs to strive hard to fully utilize the funds in the remaining two months of the current fiscal year.
The RE of the department for 2025-26 is Rs 1,23,089.30 crore, which is Rs 4200.86 crore less than its BE of Rs 127,290.16 crore.
The panel asked the department to use funds in an equitable, time-bound manner.
The committee noted that agriculture and allied activities account for 46.1 per cent of the country’s workforce, but contribute only one-fifth of India’s national income at current prices.
"This disparity highlights the Agriculture sector's vulnerability and the urgent need for increased public investment," it added.
The panel mentioned that investment in agriculture has a higher multiplier effect on poverty reduction than investment in many other sectors.
"Strengthening agricultural performance is therefore important for inclusive growth, economic stability and ensuring food security," the report said.
Hence, the panel recommended that the budgetary allocation to the Department of Agriculture is a strategic investment in the nation's economic sovereignty and not just a welfare measure.
"Enhanced budgetary allocation will enable the Department to effectively counter the challenges of Climate Change, fragmented landholdings, increasing disruptions in global supply chains, market volatility and so on, as these require a swift and robust financial response," the panel said, adding that this would facilitate the transition from subsistence farming to sustainable agri-business.
From 2022-23 to 2026-27, the report mentioned that there is an increase of Rs 6,561.38 crore in budgetary allocation for agriculture, whereas the total budget outlay of the Union Government increased by Rs 14,02,406.34 crore during the same period.
The panel also mentioned that the majority of the expenditure of the total scheme budget of agriculture goes on payments being made to farmers and insurance companies, leaving less for investment in capital assets and modernisation of agriculture, including creating resilience against climate change.
Hence, it recommended the Centre to enhance investments significantly in capital, human and institutional assets in agriculture to ensure that the rate of Capital Formation in agriculture and the allied sector does not come below 15 per cent.
