Investment in India’s infrastructure continues to be high priority for the government. An outlay of ₹12.2 trillion is proposed for capital expenditure. This is a 9 per cent increase from the previous year. Despite corporate profitability, private corporate investment as a share of GDP has been hovering in recent years at around 11.5-12.5 per cent.
During 2004-2008, corporate investment reached a peak of 16 per cent of GDP. So, the government’s continued support to infrastructure is well thought of. But investment in agriculture and allied sector does not come mainly from the Budget allocations. Instead, the Union government provides interest subvention on loans for agriculture infrastructure.
In her speech the Finance Minister highlighted the opportunity presented by allied sectors like animal husbandry, dairy, fisheries, coconut, sandalwood, walnuts, almonds etc. But there is hardly any mention of crop sector in her speech and even horticulture was not highlighted.
The overall allocation of Department of Agriculture has increased from ₹1.23 trillion to ₹1.30 trillion. Out of this, ₹600 billion is budgeted for PM Kisan and ₹635 billion is for PM Kisan Maandhan Yojana.
The actual expenditure on interest subvention for infrastructure projects funded by banks under Agriculture Infrastructure and Development Fund is not reported separately in the expenditure budget. In any case, agriculture infrastructure needs direct funding.
For example, there is no APMC in India which meets global standards while there are several airports and roads which are of highest standards. At least in the Union Territory of Delhi, the government must provide direct support from the Budget for modernisation of Azadpur APMC.
Dip in research funds
Sadly, the allocation for department of Agricultural Research and Education has been decreased from ₹102.8 billion to ₹99.67 billion. There is a consensus that for higher productivity and climate resistant agriculture, much higher level of investment is needed in research.
In her Budget speech of 2024-25, the FM had mentioned that the government will conduct a detailed review of the agriculture research set-up. It was promised that funding will be provided in challenge mode by giving an opportunity to private sector also. It must be noted that private companies have contributed enormously to high yielding seeds to horticulture crops and even maize etc. It is not clearly known if the proposal has been taken forward.
It is good that the allocation for Pradhan Mantri Matsya Sampada Yojana (PMMSY) has been increased from ₹15 billion to ₹25 billion. It is in consonance with the Finance Minister’s speech regarding marine goods.
Unlike in the Budgets of the previous years, no major announcement has been made regarding rural development. There is a passing mention of setting up of Self-Help Entrepreneur (SHE) Marts as community-owned retail outlets to provide marketing support to the enterprises promoted under the National Rural Livelihood Mission (NRLM). The overall allocation for rural development has been enhanced only marginally (by 2.63 per cent) from ₹2.66 trillion to ₹2.73 trillion.
G Ram G allocation
₹956.92 billion has been allocated for newly announced the G Ram G. In addition, ₹30,000 crore has been provided under MGNREGA — presumably to square off the spill-over liabilities.
Outlays for the three other flagship schemes of rural development, namely, the Pradhan Mantri Gramin Sadak Yojana (PMGSY), NRLM, and Pradhan Mantri Awas Yojana (PMAY) have been retained almost at the same level as last year.
Rules for inter-state allocation of G RAM G scheme are yet to be framed. Hence, as of now, we do not know whether the allocation of the Central share of this this scheme would be fully spent since it is anticipated that a larger share might go to the States whose institutional capacity for spending under MGNREGA has been demonstrably poor.
All in all, the Budget gives an impression that agriculture and rural sectors have to wait for another day.
Hussain and Mohapatra were former Union Secretaries in the Ministries of Agriculture and Rural Development
Published on February 1, 2026
