Budget 2026: The exercise has increasingly become a ritual rather than a remedy

For Indian farmers, the Budget has increasingly become a ritual rather than a remedy. Either the ministry of finance does not heed the ministry of agriculture, or the ministry of agriculture fails to marshal a convincing case. Sometimes, budget announcements can remain statements of intent. Last year’s promised increase in the Kisan Credit Card limit from ₹3 lakh to ₹5 lakh is yet to be notified.

This is not to suggest a lack of boldness at the top. New ideas have been tried. Naturally, sometimes programs underperform, or over time, circumstances change. But political exigency to continue with failing programs narrows the political headroom for reforms, and the system enters a vicious loop: weak outcomes feed electoral anxiety, which in turn fuels populism. Finally, populism and fiscal problems feed on each other, making it harder to govern.

The politics of populism is stronger in places with larger inequality. Bihar elections validated this. Also, while political parties differ ideologically, their populist tendencies are eerily alike. Governments alleviate the debt problem by throwing more debt at it. Shockingly, the borrowing costs of many private businesses are lower than those of many states, whose debts are backed by sovereign guarantees.

Take fertilizer subsidy. Food security is no longer the justification it once was. Agriculture grows at roughly 3%; population growth is closer to 0.5%. The arithmetic has changed. It’s politically doable to raise urea prices by 25% and repurpose the savings to directly benefit farmers.

On the consumption side, India has made great strides in reducing extreme poverty numbers to 7.5 crore, or as per Niti Aayog, 15 crore face multidimensional poverty. But 80 crore Indians receive free cereals. Logically, this cannot go on.

Then there is crop insurance. The Pradhan Mantri Fasal Bima Yojana (PMFBY) has the Centre and states together pitching in 90% of the premium. Yet dissatisfaction is widespread among farmers and states alike on claim settlement and transparency. It is time to replace PMFBY with a straightforward crop compensation fund. It will help regain farmers' trust.

Urban policy offers another misstep. The ‘Smart Cities" idea was a dead duck even when conceptualized 10 years ago. It pulls people from villages into already-strained cities and ignores India’s settlement patterns. The correction is obvious: instead, revitalise over 5,000 census towns—for inclusive growth.

None of this is easy. The backlog of grievances is long; the problems have been compounding for decades. Evaluation must precede expansion. But governments are poor judges of their own performance. A statutory farmers’ commission should be constituted with a mandate to audit existing interventions, recommend improvements, propose new initiatives and a farmers’ policy.

Some policies, it must be said, work remarkably well—though not for reasons openly acknowledged. Artificial suppression of farm-gate prices remains India’s most effective inflation-control tool. Whatever the Reserve Bank of India may argue, ‘repo rates’ come second. This suppression is visible in the data: ahrar, cotton, gram, groundnut, maize, masur, moong, ragi, soybean and urad have traded below MSP.

Even common vegetables—onion, potato, tomato, carrot—have seen prices fall by about a third, despite a 4% increase in fruit and vegetable output. This is not a paradox. It is the difference between production and productivity. The writing on the wall is clear: the government’s welfare/populist measures restrain the depression from turning into open dissent.

Trade policy compounds the squeeze. Import tariffs on palm, soybean and sunflower oils were cut by 40% last year. India now imports 57% of its edible oil needs. Imports are high as the crop yield gap persists because agricultural R&D has been starved for decades. Anything short of doubling R&D allocation betrays the ambition of Viksit Bharat.

Ironically, the one relief farmers have received is unintended: currency depreciation. A weaker rupee—from ₹60 per dollar in 2014 to near ₹90—acts as a natural barrier against the import of cheap farm produce and boosts export competitiveness. In the absence of tariff protection, depreciation has done the job that policy would not.

India has risen to be the world’s fourth-largest economy by GDP. Yet among roughly 200 countries, it ranks about 142nd in GDP per capita. Farmers will receive higher farm-gate prices only when purchasing power rises, consumption expands, and the economy grows more evenly. Governance is key.

To improve the quality of governance and the commons (air, water, soil, etc.) and practically everything else, if there is one reform that is undertaken this year, it is this: civil service recruitment through the Union Public Service Commission should reduce the upper age limit to 26 and cap attempts at two, irrespective of caste. Begin at the top to lift the bottom.

I have faith in the Prime Minister’s intent and capacity; I wish I were more confident that the government would listen to us farmers.

Ajay Vir Jakhar is chairperson, Bharat Krishak Samaj.