Explained : A focus on transformation of Indian agriculture for farmers’ prosperity – Part I and Its Impact

Introduction

Agriculture is the backbone of India’s economy ensuring food security, employment, and rural prosperity. More than half the population of India relies on agriculture and the government has consistently prioritized this sector through progressive policies and record budgetary allocations translating into higher productivity, improved farmer incomes, and enhanced rural infrastructure. The sector has been undergoing comprehensive transformations since Independence driven by:

1. Sustained public investment;
2. Policy reforms, and;
3. A strong emphasis on income security for farmers, sustainability, and technology adoption.

The present Prime Minister Narendra Modi’s continued emphasis on empowering farmers and strengthening agricultural infrastructure speaks volumes about his vision for a Viksit Bharat, a Developed country, a vision rooted in his belief that the strength of a Nation lies in the strength of its farmers. He believes, by nurturing this backbone, India will continue its remarkable journey of progress and prosperity.

As per the information presented by the Ministry of Agriculture & Farmers Welfare in Parliament, a wide range of Central Sector and Centrally Sponsored Schemes during the last 11 years have been shaping the future of farming across India.

The Government of India’s role

Although agriculture is constitutionally a State subject, the Government of India continues to play a pivotal role by:

1. Designing National frameworks;
2. Funding Large-scale Programmes, and;

Supporting the States through:

1. Budgetary allocations;
2. Technical guidance, and;
3. Institutional reforms.

These interventions span the entire agricultural ecosystem covering:

1. Production;
2. Risk management;
3. Post-harvest infrastructure;
4. Marketing;
5. Exports;
6. Natural farming, and;
7. Digital services.

Increased Budget allocation for Agriculture

Underlining the government’s commitment to agriculture, the budgetary allocation to the Department of Agriculture & Farmers Welfare (DA & FW) has increased nearly 6-fold from Rs. 21,933.50 crore in 2013–14 to Rs.1,27,290.16 crore in the Budget Estimates for 2025–26, amounting to 480 % increase, reflecting a strategic shift from short-term support to long-term structural strengthening of agriculture, with the enhanced budget support providing for:

1. Income transfers;
2. Crop insurance;
3. Credit availability;
4. Creation of Infrastructure,
5. Mechanization;
6. Extension services, and;
7. Climate-resilient farming practices.

Findings of a National sample Survey (NSS)

The Situation Assessment Survey of Agricultural Households conducted by NSSO providing measurable evidence of income growth among agricultural households shows that, the average monthly income per agricultural household rose from Rs. 6,426 in 2012–13 to Rs.10,218 in 2018–19 amounting to 59 % increase, the increase having been driven by multiple factors, including:

1. Diversification into allied activities such as livestock and fisheries;
2. Improved access to institutional credit;
3. Income support through PM-KISAN Scheme (Pradhan Mantri Kisan Samman Nidhi);
4. Reduced production risks through Crop insurance, and;
5. Better price discovery mechanisms.

Reinforcing this trend, the success stories compiled by the Indian Council of Agricultural Research (ICAR) indicate that, over 75,000 farmers have more than doubled their income through convergence of schemes implemented by the Department of Agriculture & Farmers Welfare (DA & FW) and allied ministries, demonstrating the impact of these integrated interventions.

Other Indicators

Rising Rural Consumption

The Household Consumption Expenditure Survey (HCES) 2023–24 conducted by the Ministry of Statistics and Programme Implementation (MOSPI) points to the improving Rural Purchasing Power indicating increase in the Average Monthly Per Capita Consumption Expenditure (MPCE) in Rural India increasing from Rs.1,430 in 2011–12 to Rs.4,122 in 2023–24, while Urban Monthly Per Capita Consumption Expenditure (MPCE) rising from Rs. 2,630 to Rs. 6,996. This amounts to an increase in Rural & Urban Average MPCE by 188% and 166% respectively during the period.

It is Important to note that the gap between Rural and Urban Consumption has narrowed, suggesting gradual improvement in:

1. Rural living standards;
2. Access to services, and;
3. Economic resilience.

Income Security and Risk Management

Ensuring income stability remains Central to India’s agricultural strategy. To this effect:

1. The Pradhan Mantri Kisan Samman Nidhi Scheme (PM-KISAN Scheme) has been providing direct income support of Rs.6,000 per year to eligible cultivable landholding farmers, offering predictable cash flow support.
2. Risk mitigation is being addressed through the Pradhan Mantri Fasal Bima Yojana (PMFBY) and the Restructured Weather Based Crop Insurance Scheme (WBCIS), which together insure more than 4 crore farmers annually across 24 States and Union Territories, with an aim to reduce vulnerability to:
3. Climate shocks;
4. Pest attacks, and;
5. Yield losses.

Progress under Pradhan Mantri Fasal Bima Yojana (PMFBY)

1. As of now 63.23 crore farmer applications have been enrolled under the scheme.
2. Over 19.91 crore farmers (provisional) have received insurance claims.
3. Rs. 1.75 lakh crore(provisional) have been paid out in claims to farmers.

Provision of Affordable credit

The Kisan Credit Card (KCC) Scheme ensures hassle-free and affordable credit to farmers for short- and long-term cultivation, post-harvest expenses, and consumption needs. It provides easy access to credit for agriculture and allied sectors, supporting farmers’ financial stability.

Affordable credit is facilitated through the Modified Interest Subvention Scheme (MISS), under which, farmers can access short-term crop loans up to Rs. 3 lakh at  Subsidised interest rate of 7 % per annum, including, support for allied activities such as, animal husbandry and fisheries.

Credit provided through Kisan Credit Card (KCC)

1. As of now ₹10 lakh crore credit has been provided to 7.71 crore farmers;
2. Loan limit under KCC has been enhanced from Rs. 3 lakh to Rs. 5 lakh for 2025–26.

The Food Processing Sector: A Key Driver of Farmers’ Income Growth

Over the past 11 years, the food processing sector has emerged as a powerful enabler of farmers’ income enhancement. By creating robust farm-to-market linkages, reducing post-harvest losses and expanding value addition through modern processing infrastructure, the sector has increased the profitability of agricultural produce.

Government initiatives, particularly under the Pradhan Mantri Kisan Sampada Yojana, have driven exponential growth in processing capacity and exports, also generating substantial off-farm employment, further supporting rural livelihoods.

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