Ahead of India’s Union Budget 2025-26, Finance Minister Nirmala Sitharaman met with farmer representatives and agricultural stakeholders on Saturday to discuss key challenges and opportunities in the agricultural sector. The two-hour meeting focused on financial relief for farmers, tax reforms, and strategic investments to enhance farm productivity and welfare.
Key demands from the farming community included a call for reduced interest rates on agricultural loans, with a target rate as low as 1 per cent , and an increase in the annual PM-KISAN income support from Rs 6,000 to Rs 12,000. Stakeholders also pushed for zero-premium crop insurance for small farmers under the Pradhan Mantri Fasal Bima Yojana.
Bharat Krishak Samaj Chairman Ajay Vir Jakhar emphasized the need for a targeted investment strategy, proposing an annual allocation of Rs 1,000 crore for eight years to enhance the productivity of key crops such as chickpeas, soybean, and mustard. This proposal aims to reduce import dependence and improve national nutritional security.
“The government must adopt a comprehensive strategy to strengthen the sector and reduce reliance on imports,” Jakhar told reporters after the meeting.
Taxation reforms also featured prominently in the discussion. PHD Chambers of Commerce and Industry called for a reduction in the Goods and Services Tax (GST) on pesticides from 18 per cent to 5 per cent , citing the need to curb the sale of counterfeit products and protect intellectual property related to new agricultural technologies.
Bhartiya Kisan Union (BKU) Speaker Dharmendra Malik advocated for a thorough review of the Minimum Support Price (MSP) system, urging the inclusion of land rent, farm wages, and post-harvest expenses in MSP calculations. He also called for expanding MSP coverage beyond the 23 commodities currently included.
The meeting takes place against the backdrop of ongoing farmer protests at Delhi's borders, where demonstrators are demanding legal guarantees for MSP and debt waivers. Protesters are also seeking a 50 per cent profit margin on production costs and a commitment to doubling their incomes.
The agriculture sector, which grew by 3.5 per cent in the July-September quarter of 2024, showed resilience amid India’s broader economic slowdown. To support small farmers, the Reserve Bank of India recently increased the collateral-free agricultural loan limit from Rs 1.6 lakh to Rs 2 lakh per borrower.
The Finance Ministry has begun stakeholder consultations, meeting with economists, industry leaders, and state officials to craft an inclusive budget. Earlier, Sitharaman sought inputs from leading economists, who recommended an industrial policy to boost manufacturing and a flexible fiscal roadmap to manage inflation and climate concerns.
"The focus must be on increasing investment and addressing food inflation while preparing for long-term challenges like climate change," said Ashwani Mahajan, National Co-convenor of Swadeshi Jagran Manch, after the meeting.
The 2025-26 Union Budget is expected to be tabled on February 1, continuing the government’s tradition of presenting annual fiscal plans at the start of the year. As agriculture remains a cornerstone of India’s economy, its role in the upcoming budget is anticipated to take centre stage amidst rising demands for systemic reforms.
