The Union Budget 2025-26, presented by Finance Minister NirmalaSitharaman, places significant emphasis on rural development, focusing on agriculture, rural employment, infrastructure, and empowerment of rural women and youth. With a vision of Viksit Bharat, the budget aims to foster inclusive growth through targeted schemes and reforms.
This article analyzes the key rural development measures in the budget and their potential impact –
1. Strengthening Agriculture and Rural Livelihoods
Prime Minister Dhan-Dhaanya Krishi Yojana – Inspired by the Aspirational Districts Programme, this scheme targets 100 districts with low agricultural productivity. It focuses on:
- Enhancing crop productivity through modern farming techniques
- Promoting sustainable agriculture and crop diversification
- Improving irrigation and post-harvest storage facilities
- Facilitating access to institutional credit for 1.7 crore farmers
This initiative is expected to boost farm incomes and contribute to India’s food security.
Mission for Aatmanirbharta in Pulses –To reduce dependency on imports, the government has introduced a six-year mission focusing on increasing domestic production of pulses like Tur, Urad, and Masoor. The mission includes:
- Climate-resilient seed development
- Post-harvest storage and procurement assurance by NAFED and NCCF
- Remunerative pricing for farmers
This will enhance self-sufficiency in pulses, improving both farmer incomes and nutrition security.
Comprehensive Programme for Vegetables & Fruits
As consumer demand for fruits and vegetables grows, the budget proposes a structured program for production, efficient supply chains, processing, and remunerative pricing. Farmer Producer Organizations (FPOs) and cooperatives will play a key role in implementation.
Fisheries and Cotton Productivity Missions
- A framework for sustainable fisheries development, particularly in Andaman & Nicobar and Lakshadweep, will expand marine exports and improve fishermen’s incomes.
- The Mission for Cotton Productivity will introduce high-yield, pest-resistant cotton varieties, ensuring better earnings for cotton farmers and supporting India’s textile sector.
Enhancing Rural Credit and Infrastructure
- Kisan Credit Card (KCC) Loan Limit: Increased from ₹3 lakh to ₹5 lakh, enabling farmers, fishers, and dairy farmers to access more credit.
- Urea Plant in Assam: A new 12.7 LMT per year capacity plant will enhance fertilizer self-sufficiency.
- India Post as a Rural Growth Engine: Leveraging 1.5 lakh post offices, India Post will provide rural financial services, logistics, and support for MSMEs and self-help groups (SHGs).
2. Rural Employment and MSME Development
Rural Prosperity and Resilience Programme –This multi-sectoral initiative focuses on:
- Skilling and technology adoption in agriculture
- Promoting rural entrepreneurship and non-farm employment
- Reducing distress migration by strengthening the rural economy
Support for MSMEs :Investment and turnover limits for MSME classification have been increased by 2.5 and 2 times, respectively, allowing enterprises to scale up while retaining MSME benefits.
- Credit Guarantee Enhancement:
- For Micro and Small Enterprises: Increased from ₹5 crore to ₹10 crore
- For Startups: Increased from ₹10 crore to ₹20 crore
- Credit Cards for Micro Enterprises: A new credit card scheme with a ₹5 lakh limit will aid small entrepreneurs in rural areas.
Promoting Rural Entrepreneurship among Women and Marginalized Groups
A new scheme will support 5 lakh first-time entrepreneurs from Scheduled Castes (SCs), Scheduled Tribes (STs), and women, offering term loans up to ₹2 crore over five years.
3. Investment in Rural Infrastructure
JalJeevan Mission Extended to 2028
With 15 crore rural households already connected to piped water, the mission’s extension will aim for 100% rural coverage. The focus will be on infrastructure quality and community-led operation and maintenance.
Urbanization and Rural-Urban Linkages
- Western Koshi Canal Project in Bihar: To benefit 50,000 hectares of farmland in the Mithilanchal region.
- Greenfield Airport in Bihar: Enhancing rural connectivity and economic opportunities.
- Revamped UDAN Scheme: Supporting air connectivity to 120 new destinations, benefiting aspirational districts.
Power and Digital Connectivity
- Rural electrification and intra-state transmission strengthening will be incentivized, with states allowed additional borrowing of 0.5% of their GSDP.
- Broadband Expansion: All government secondary schools and primary health centers in rural areas will be connected via BharatNet.
4. Technology and Innovation for Rural Growth
AI and Skill Development for Rural Youth
- National Centres of Excellence for Skilling: Five new centers will equip youth with skills for Make in India, Make for the World.
- Centre of Excellence in AI for Education: A ₹500 crore initiative will integrate AI-driven learning in rural schools.
Boosting Research for Rural Development
- Gene Bank for Crops: A second gene bank with 10 lakh germplasm lines will be established for food security and crop resilience.
- National Geospatial Mission: Modernizing land records and rural planning through advanced mapping technology.
5. Fiscal Allocations and Rural Development Impact
- The budget estimates a fiscal deficit of 4.4% of GDP, balancing rural spending with fiscal discipline.
- Revenue forgone due to tax reforms is ₹1 lakh crore (direct taxes) and ₹2,600 crore (indirect taxes)—a move that will increase disposable income in rural households.
- Capital expenditure allocation of ₹10.18 lakh crore includes significant rural infrastructure projects.
Conclusion:
The Budget 2025-26 lays a robust foundation for rural development, integrating agriculture, employment, entrepreneurship, infrastructure, and technology. With a strong emphasis on skilling, credit accessibility, and digital transformation, it aims to empower rural communities, ensuring that economic growth is inclusive and sustainable. If implemented effectively, these measures can drive rural prosperity, reduce inequalities, and propel India towards its vision of Viksit Bharat.
The Budget 2025-26 includes strong measures for credit expansion, MSME growth, and rural connectivity, but lacks major reforms in rural employment, MSP support, education, and healthcare. A more comprehensive approach is needed to ensure inclusive rural development that goes beyond agriculture and truly empowers rural communities economically and socially.
For rural India to fully benefit, the government must:
✅ Expand rural employment schemes beyond MGNREGA
✅ Strengthen rural healthcare and school infrastructure
✅ Guarantee MSP for farmers
✅ Invest in climate-resilient agriculture
✅ Enhance digital inclusion for small farmers and SHGs
Without these, rural India may continue to face economic disparities despite ambitious budgetary announcements.
Dr. Jayanta Choudhury is the Assistant Professor & Head-in-Charge, Department of Rural Studies, Tripura University (A Central University). He may be contacted at [email protected]
