Union Budget 2026: Higher allocations for Livelihood Missions, focus on farm incomes -- Agriculture sector's to-do list for February 1

Finance Minister Nirmala Sitharaman is set to present the Union Budget 2026-27 on February 1, a key event for markets, businesses, and households for tracking tax changes, spending plans, and economic signals. The Union Budget sets the government’s economic direction for the year ahead as it focuses on the government's plants to grow the economy, support citizens, and manage public finances.

India is gearing up for the Union Budget 2026-27, the agriculture sector is seeking more than incremental support. It wants a transformative push that blends technology, climate resilience, and rural livelihoods. With almost 45 per cent of the Indian workforce dependent on agriculture yet contributing less than a fifth to GDP, this year's budget can truly reposition farming. 

"Agriculture is increasingly being recognised not merely as a welfare sector, but as a credible engine of economic growth -- one that can drive productivity, employment, rural demand and resilience," said Amit Vatsyayan, Leader, GPS-Agriculture, Livelihood, Social and Skills at EY India.

"From a growth lens, these interventions also act as strong multipliers -- stimulating rural demand, stabilising farm incomes and strengthening food security," he added.

The Climate finance sector argues that Budget 2026 should focus on sustainable, community-driven development, rather than traditional subsidies.

“We anticipate an increased allocation for Livelihood Missions that strategically integrate SHGs into formal value chains, with a specific focus on Green Jobs such as solar infrastructure maintenance and circular waste management,” says Ayushi Mishra, Climate Finance Expert, MicroSave Consulting (MSC).

“Better product design and financial de-risking mechanisms for climate-resilient agriculture can empower farmers to adopt practices that are commercially viable and scalable," she adds.

"Agri-drones, IoT sensors, and AI-driven analytics hold transformative potential to elevate yields, optimise water and fertilizer use, and fortify climate resilience for 140 million farm holdings," EY India's Amit Vatsyayan said.

He emphasised the effective roll-out of AGRISTACK as a digital public good that could serve as the backbone of this transformation. AGRISTACK is a national digital public infrastructure (DPI) initiative by the Union Government for modernising the agricultural sector.

"By integrating farmer data, land records, credit, insurance, extension and market platforms, AGRISTACK can enable precision targeting, reduce transaction costs and crowd in private investment," he added.