Nirmala Sitharaman Budget 2025: Transformative Measures to Empower Indian Farmers

Nirmala Sitharaman Budget 2025: This year’s budget is poised to significantly impact the lives of farmers, potentially transforming their fortunes. Agriculture contributes over 15% to India’s GDP and provides employment to more than 45% of the population. Over the past five years, India’s agricultural sector has achieved an average annual growth rate of 4.18%. The upcoming budget, set to be presented on February 1st, is highly anticipated by all sections of society, with many expecting it to be farmer-friendly.

Agriculture’s Critical Role in India’s Economy

Agriculture plays a pivotal role in India’s economy, contributing over 15% to the country’s GDP and providing employment to more than 45% of Indians. The sector has shown resilience, achieving an average annual growth rate of 4.18% over the last five years. Despite these positive indicators, the sector continues to face significant challenges that the new budget aims to address.

Addressing Ongoing Challenges in the Agricultural Sector

The agricultural sector in India has been grappling with continuous crises. Between 2020 and 2022, the number of farmers increased by 56 million. However, despite this growth, farmers have had limited opportunities to transition into other production fields. This situation underscores the urgent need for the government to implement robust measures to enhance production and development in the agricultural sector.

Key Demands from Farmers to Finance Minister Nirmala Sitharaman

Farmers have presented several critical demands to Finance Minister Nirmala Sitharaman, aiming to alleviate their financial burdens and improve their livelihoods. These demands include:

Reduction in Agricultural Loan Interest Rates: Farmers are requesting a 1% reduction in interest rates on agricultural loans.
Increase in PM-KISAN Annual Installments: They seek an increase in the annual installment of the PM-KISAN scheme from ₹6,000 to ₹12,000.
Zero Premium on Crop Insurance for Small Farmers: Farmers demand zero premium under the Prime Minister’s Crop Insurance Scheme for smallholders.
Lower GST on Seeds, Machinery, and Fertilizers: A reduction in GST on seeds, agricultural machinery, and fertilizers is being sought.
Reduction in GST on Pesticides: The PHD Chamber of Commerce has recommended lowering GST on pesticides from 18% to 5%.

Potential Economic Impact if Farmers’ Issues Remain Unresolved

Failure to address farmers’ concerns promptly could have long-term detrimental effects on India’s economy. Prolonged neglect may hinder the government’s vision of transforming India into a developed nation by 2047. In response to these challenges, the government announced a special package for Di-ammonium Phosphate (DAP) in January 2025. This package aims to stabilize DAP prices and provide a subsidy of ₹3,500 per ton in the global market, reflecting the government’s commitment to incorporating these issues into the upcoming budget.

Government’s Initiatives to Support the Agricultural Sector

To support the agricultural sector, the government has introduced several initiatives:

DAP Price Stabilization: A special package to stabilize DAP prices and offer subsidies in the global market.
Focus on Production and Development: Concrete steps to enhance production and development within the agricultural sector.
Inclusion of Farmers’ Demands in the Budget: Efforts to incorporate farmers’ key demands into the budget to ensure their welfare and economic stability.

A Farmer-Friendly Budget on the Horizon

The upcoming budget by Finance Minister Nirmala Sitharaman holds the promise of being a turning point for India’s farmers. By addressing critical issues such as loan interest rates, crop insurance, and GST reductions, the budget aims to enhance the economic well-being of farmers and contribute to the overall growth of the agricultural sector. These measures are expected to not only improve farmers’ livelihoods but also bolster India’s economy, aligning with the government’s long-term development goals.