“Rural investment is the story of hope, growth, and resilience,” wrote the late Dr. APJ Abdul Kalam. In India, today that test is ultimately about livelihoods, and this Union Budget has the opportunity to widen the circle of stable, dignified work for rural households.
India enters this Budget cycle with rural livelihoods under pressure from multiple directions - climate change disrupting crops and wages, uneven market access, and the reality that over four-fifths of our workforce remains in informal, often low-paying work. Yet programs like the Deendayal Antyodaya Yojana, NABARD's support for women's SHGs, and farmer collectives show what targeted interventions can achieve — more diversified, resilient incomes for families on the margins.
While indications point to continuing fertiliser subsidies to cushion farmers against global price volatility, support for natural farming and domestic bio-fertiliser production, as also renewed emphasis on skilling youth, these by themselves may not be sufficient to address the deeper vulnerabilities facing small producers and informal workers. This Budget has an opportunity to make conscious choices that back crop diversification, strengthen local institutions, expand allied and diversified rural livelihoods and align climate resilience with nutrition such that growth translates into stable and dignified work with increased income resilience.
A good starting point is strengthening the foundations of how and what we produce, and who our food systems serve. Marginal farmers, who account for 68.5% of farm holdings, remain tied to a narrow basket of crops. The Economic Survey 2024-2025 underlined the need for crop diversification and sustainable practices. This Budget can convert that intent into livelihoods at scale by setting aside greater resources for nutrition-rich, climate-resilient crops like millets, pulses, and oilseeds in climate-vulnerable blocks.
Farmers need to be incentivised to move away from water-intensive crops towards varieties that combine market demand, nutrition and resilience. Farmers in eastern UP who turned fallow summers into profitable groundnut seasons under the Sujalam Sufalam program, or ragi farmers in Odisha now growing millets for both family nutrition and sale, demonstrate how net incomes and confidence are impacted positively when crop diversification is planned and executed properly.
A step in the right direction is government's decision to extend the Central Scheme for Farmer Producer Organisations for another five years. It unambiguously signals that these institutions matter given that FPOs help producers aggregate, access inputs and credit, negotiate better prices and move up the value chain.
This Budget can further strengthen these institutions by providing multi-year support to FPOs and SHG clusters in climate-vulnerable and low-income districts. Such support would enable investments in storage, processing, quality improvement and marketing – capabilities that determine whether producer collectives survive beyond project cycles. Equally important is improving convergence between agriculture, rural development and MSME allocations to enable collectives to access a coherent package of support rather than navigating fragmented schemes.
Expanding targeted support for small livestock, backyard poultry, fisheries and agro-forestry in districts facing climate and market stress can provide additional income streams that smoothen earnings across seasons. There is also a growing need to back rural non-farm enterprises - community-led tourism, food processing, crafts and digital-enabled micro-businesses.
With better rural connectivity, skilling programs and credit access already on the policy agenda, this Budget can explicitly set targets and funding windows for non-farm jobs so that migration becomes an option, not a necessity.
Livelihoods, climate resilience, and nutrition are deeply intertwined. Recent policy directions on natural farming, nutrient-based fertiliser subsidies and biofertiliser production reflect a growing recognition that today's input choices shape tomorrow's soil, water, and emissions. The Budget has an opportunity to build on this momentum by ring-fencing funds for climate adaptation in rural areas, ensuring such funds link to livelihood outcomes.
Public distribution and safety nets should also act as levers for better nutrition and local economies. Gradually increasing the share of pulses, millets, eggs, milk, fruits, and vegetables in relevant programs, alongside staples, boosts demand for diversified crops and livestock while improving diets. When farmers grow a wider range of crops, when local institutions help them reach markets and when public programs reward diversity and nutrition, the same rupee stretches longer to support incomes and community wellbeing.
Similarly, when livelihoods are secure, families can ensure the continuity of their children’s education, access healthcare on time and withstand uncertainty without slipping into distress. Migration then becomes a choice shaped by opportunity rather than compulsion. With climate stress and informal work testing household resilience amid strong growth, India cannot afford to treat livelihoods as a secondary outcome of development.
This Budget will set the tone for India's next growth phase. With limited fiscal space and rising climate risks, the most effective spending strengthens people's capacity to adapt and participate – in their farms, enterprises and communities. By aligning incentives with resilience and wellbeing, it can help shift the needle from managing vulnerability to building enduring prosperity in India's movement towards ‘Viksit Bharat’.
— Siddharth Sharma is the CEO of Tata Trusts
This article was published on The Economic Times on 30 January, 2026.
