FARM-FIRST BUDGET

With rural demand reviving but farm distress lingering, can Budget 2026-27 finally reset India's agriculture growth story?

- BY ASHISH SINHA

AGRICULTURE remains the backbone of India's economy, not just as a source of livelihood for nearly halfthe population, but as a critical stabiliser of growth, consumption and social cohesion.

While its direct contribution to GDP has gradually declined to around 15-16 per cent, the sector's indirect impact—through food security, rural demand, inflation management and employment—is far larger. A good farm season lifts consumption, supports MSMEs and eases fiscal pressure; a bad one amplifies distress, migration and political risk. As India targets a sustained 7-8 per cent growth path and a Viksit Bharat by 2047, agriculture can no longer be treated as a residual sector—it must become a productivity-led growth engine.

Yet, structural challenges persist. Fragmented landholdings, uneven irrigation coverage, rising input costs, climate volatility and weak last-mile delivery continue to cap farmer incomes. Productivity gaps across states and crops remain wide, while adoption of modern technologies is patchy. Rural employment opportunities outside farming are limited, pushing disguised unemployment back into agriculture. Despite signs of recovery in rural demand, the sector remains vulnerable to weather shocks and market inefficiencies. Against this backdrop, the Union Budget 2026-27 assumes significance—not merely as an allocator of subsidies, but as a policy signal on whether India is ready to modernise its farm economy and make agriculture a viable, aspirational livelihood again.