In a bold move to revitalise India’s struggling agricultural sector, the government has unveiled the PM Dhan-Dhanya Krishi Yojana, a sweeping initiative aimed at boosting productivity and rural prosperity in 100 underperforming districts. Announced by Finance Minister Nirmala Sitharaman during the Union Budget 2025-26, the scheme seeks to address long-standing challenges such as inadequate irrigation, limited access to credit, and stagnating crop yields. But can this ambitious plan deliver on its promise to transform India’s rural economy?
Agriculture: The Backbone of India’s Economy
Agriculture remains the lifeblood of India’s economy, employing nearly half of the country’s workforce and contributing around 16% to its GDP. Despite its critical role, the sector has been plagued by persistent issues, including unpredictable weather, market volatility, and outdated farming practices. While the sector has shown resilience—growing at a compounded annual growth rate (CAGR) of 5.4% since 2019-20, according to the Economic Survey 2024-25—progress has been uneven, with many regions lagging behind.
The PM Dhan-Dhanya Krishi Yojana aims to bridge these gaps by targeting districts with low crop intensity and limited credit availability. The government estimates that the scheme will directly benefit 10.7 million farmers, reducing their reliance on migration to cities for livelihood. As Sitharaman stated, “We want migration to cities to be an option, not a necessity.” This vision underscores the scheme’s broader goal of fostering rural prosperity through sustainable agricultural practices.
Key Features of the Scheme
The initiative adopts a multi-pronged approach, integrating modern techniques, financial support, and infrastructural development. Key components include:
1. Expanding Irrigation Coverage: Only 55% of India’s net-sown area is currently irrigated, leaving farmers at the mercy of erratic monsoons. The scheme aims to address this by expanding irrigation infrastructure, ensuring more reliable water access for crops.
2. Increasing Credit Access: Small and marginal farmers often struggle to secure loans for high-yield seeds, fertilisers, and machinery. The initiative will enhance credit availability, enabling farmers to invest in modern technologies and improve productivity.
3. Promoting Scientific Farming: The scheme will encourage the adoption of scientific techniques to improve soil fertility, conserve water, and boost yields. This includes training farmers in sustainable practices to ensure long-term agricultural viability.
Budgetary Allocations and Sector-Wide Growth
To support these efforts, the government has allocated ₹21.71 lakh crore to agriculture and allied activities in the 2025-26 budget—a 22% increase from the revised estimates of 2024-25. However, the allocation for the agriculture ministry itself has been reduced by 2.5% to ₹1.38 lakh crore, signalling a shift towards targeted spending rather than broad-based funding. Capital investment in agriculture has also seen a significant boost, rising to ₹292.2 crore for 2025-26, compared to ₹122.5 crore in the previous year.
In addition to the PM Dhan-Dhanya Krishi Yojana, the government has launched a six-year pulses production mission and a five-year cotton production plan. These initiatives aim to achieve self-sufficiency in critical commodities, reducing India’s reliance on imports. For instance, the cultivated area for pulses has already increased by 50% since 2014-15, reflecting sustained efforts to boost domestic production.
Challenges and the Need for Diversification
Despite these policy advancements, the agricultural sector remains vulnerable to climate change, with unseasonal rains and droughts wreaking havoc on crop yields. The Economic Survey 2024-25 highlights the growing importance of high-value subsectors like horticulture, livestock, and fisheries, which are driving overall agricultural growth. The fisheries sector, for example, has shown a remarkable CAGR of 13.67%, followed by livestock at 12.99%.
Experts argue that diversification beyond traditional crop farming is essential to mitigate risks and enhance rural incomes. The survey also emphasises the need for market-driven reforms, stating that “farmers must be allowed to receive price signals from the markets unimpeded.” This suggests a move towards minimising government intervention in pricing while ensuring mechanisms to protect vulnerable farmers from extreme market fluctuations.
Expert Reactions: A Game-Changer or a Missed Opportunity?
Agricultural experts have largely welcomed the initiative, viewing it as a potential game-changer for underperforming regions. K. Mani, a former faculty member at Tamil Nadu Agricultural University, remarked, “The scheme to enhance productivity and crop production in 100 districts appears to be the first major initiative in decades to create new food-bowl states.” However, he cautioned that adequate funding and timely execution would be critical to achieving tangible results.
Chief Economic Adviser V. Anantha Nageswaran echoed this sentiment, noting that “India’s economy is expected to grow at a sub-7% rate in 2025-26, and further agricultural, land, and labor reforms will be crucial for sustaining higher growth.” Given that agricultural productivity directly influences rural demand, any improvement in the sector is likely to have ripple effects across the broader economy.
The Road Ahead: Implementation is Key
While the PM Dhan-Dhanya Krishi Yojana represents a significant step forward, its success will hinge on effective implementation, collaboration with state governments, and timely funding. The scheme offers a unique opportunity to transform historically underperforming districts into thriving agricultural hubs, ensuring food security and rural prosperity. However, as with all ambitious policies, continuous monitoring and adaptability will be essential to overcoming unforeseen challenges.
By focusing on productivity enhancement, financial empowerment, and market accessibility, this initiative has the potential to create a more self-reliant and prosperous agricultural landscape in India. If executed effectively, it could redefine the rural economy, making farming a sustainable and profitable venture rather than a sector of distress. The challenge now lies in ensuring that these policy promises translate into measurable improvements on the ground, securing a future where Indian agriculture is not just resilient, but truly thriving.