Policy Update
Tanushree Bora
Background
The Prime Minister Dhan-Dhaanya Krishi Yojana (PMDKY) was introduced in the Union Budget 2025-26 to revitalize India’s agricultural sector, particularly in 100 underdeveloped agricultural districts. These districts were selected based on low productivity, moderate crop intensity, and below-average credit flow. The policy aims to enhance agricultural yields, improve rural infrastructure, increase financial access for farmers, and promote sustainable farming practices. By integrating modern agricultural techniques with institutional credit and storage facilities, PMDKY is expected to benefit approximately 1.7 crore farmers (Press Information Bureau, 2025).
Despite being one of the largest globally, India’s agriculture sector faces several structural challenges such as fragmented land holdings, post-harvest losses, and inadequate access to credit and irrigation. Many previous policies, such as PM-KISAN, focused on direct income support, while Rashtriya Krishi Vikas Yojana (RKVY) provided states with flexible agricultural funding. PMDKY differentiates itself by taking a district-focused approach, ensuring targeted interventions where they are most needed.
Functioning and Key Components
PMDKY is designed as a multi-faceted intervention implemented through a collaborative approach between the central and state governments. It aligns with existing agricultural schemes while introducing new targeted measures. The Ministry of Agriculture and NITI Aayog will oversee implementation, ensuring periodic monitoring and evaluation based on measurable metrics.
Enhancing Agricultural Productivity
Precision farming techniques and high-yield seed varieties are being promoted under PMDKY to boost agricultural productivity. Precision farming leverages sensor-based technologies, real-time soil analysis, and data-driven irrigation to optimize resource usage and maximize crop output. Additionally, adopting high-yield and genetically improved seed varieties ensures greater resistance to pests and environmental stressors, leading to higher yields and improved farm incomes. Another critical component is the promotion of climate-resilient crops, which help mitigate the impact of erratic weather patterns caused by climate change. Farmers can sustain their livelihoods even in adverse climatic conditions by integrating drought-resistant, flood-tolerant, and saline-resistant crops.
Promoting Crop Diversification and Sustainable Practices
PMDKY encourages crop diversification to reduce over-reliance on staple grains and promote the cultivation of high-value crops such as pulses, oilseeds, and horticultural products. Diversification not only enhances soil fertility but also expands market opportunities for farmers, allowing them to benefit from higher profit margins and lower risks of market fluctuations. Furthermore, the scheme supports the integration of organic farming practices, advocating for the use of bio-fertilizers, natural pesticides, and composting techniques. By reducing dependence on synthetic chemical inputs, these sustainable methods help improve soil health, biodiversity, and long-term agricultural viability.
Improving Post-Harvest Infrastructure
Post-harvest losses remain a major concern in Indian agriculture, often leading to significant economic setbacks for farmers. PMDKY aims to address this by promoting the construction of community-level grain storage facilities, ensuring that farmers have access to safe and reliable storage options. This initiative is expected to reduce wastage, stabilize food prices, and improve food security in rural areas. Additionally, the scheme focuses on the development of cold chain logistics to support the preservation of perishable agricultural products such as fruits, vegetables, and dairy items. Investments in refrigerated transportation, modern warehouses, and agro-processing units will allow farmers to sell their produce at competitive prices without compromising quality.
Augmenting Irrigation Facilities
Water scarcity remains a major challenge for Indian farmers, particularly in drought-prone regions. To ensure year-round water availability, PMDKY prioritizes the expansion of micro-irrigation systems, including drip and sprinkler irrigation technologies. These systems enable efficient water usage, minimize wastage, and improve crop yields, especially in semi-arid and rain-fed areas. The scheme also emphasizes the implementation of water conservation projects, such as check dams, rainwater harvesting structures, and groundwater recharge programs. By promoting sustainable water management, PMDKY aims to enhance agricultural resilience and productivity across vulnerable districts.
Facilitating Credit Availability for Farmers
Financial access remains a crucial factor in agricultural development, and PMDKY seeks to bridge this gap by expanding the coverage of Kisan Credit Cards (KCCs). This initiative ensures that farmers can access low-interest agricultural loans for seeds, fertilizers, irrigation, and farm equipment, reducing their dependence on informal moneylenders. Furthermore, the introduction of special loan schemes for small and marginal farmers aims to offer customized financial solutions, including zero-collateral loans, flexible repayment structures, and subsidized credit options. By enhancing financial inclusion, PMDKY empowers farmers to invest in modern agricultural practices, ultimately improving their economic stability and productivity.
Performance Evaluation and Financial Allocations
The Prime Minister Dhan-Dhaanya Krishi Yojana (PMDKY), announced in the Union Budget for 2025-26, aims to enhance agricultural productivity, improve irrigation facilities, and facilitate both short-term and long-term credit access across 100 districts identified by their low productivity, moderate crop intensity, and below-average credit parameters.
Notably, no separate budget allocation has been announced for PMDKY; instead, it plans to pool funds from existing schemes under the Ministries of Agriculture, Fisheries, Animal Husbandry, and Dairying. The scheme is expected to benefit approximately 1.7 crore farmers, contributing to agricultural sustainability and rural development. Performance evaluations will focus on yield improvements, credit flow, and irrigation expansion within the targeted districts.
Among the top recipient states are:
- Maharashtra: ₹3,500 crore
- Uttar Pradesh: ₹2,900 crore
- Madhya Pradesh: ₹2,600 crore
While the government has made firm financial commitments to the PMDKY, reports from previous agricultural schemes indicate that fund utilization often faces bureaucratic delays and administrative inefficiencies. Similar initiatives, such as the Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), have encountered challenges in fund disbursement, with some states utilizing less than 80% of allocated funds in past phases (NITI Aayog, 2015-16). Ensuring timely execution and efficient resource allocation remains critical to the success of PMDKY.
Emerging Issues
Delayed Implementation and Fund Utilization: While the scheme has strong financial backing, on-ground execution has been slow, particularly in states where bureaucratic inefficiencies cause delays in fund allocation.
Low Awareness Among Farmers: Many small and marginal farmers are unaware of the scheme’s benefits or how to access credit and infrastructure facilities under PMDKY.
Lack of Private Sector Participation: Private agribusiness firms and startups could play a crucial role in areas like technology adoption, farm mechanization, and market linkages. However, the scheme currently lacks a structured mechanism for private-sector involvement.
Climate Adaptability Challenges: Given the impact of climate change on Indian agriculture, PMDKY needs to further integrate climate-resilient farming strategies.
Recommendations
Introduce a real-time fund tracking system and establish quarterly performance reviews to monitor financial disbursement and project completion.
To increase participation, launch awareness campaigns via regional radio, TV, social media, and farmer cooperatives.
Develop public-private partnerships (PPPs) for cold storage, logistics, and digital farming solutions to maximize efficiency.
Expand investment in AI-driven weather forecasting, drought-resistant crops, and precision irrigation.
Way Forward
The Prime Minister Dhan-Dhaanya Krishi Yojana (PMDKY) is a major step forward in revitalizing India’s agricultural sector, focusing on districts that have historically lagged in productivity and credit access. If effectively implemented, PMDKY can:
- Ensure food security for millions (aligning with UN Sustainable Development Goal 2: Zero Hunger).
- Boost farmer incomes and reduce rural poverty.
- Make India self-sufficient in key agricultural commodities.
However, for PMDKY to achieve its full potential, the government must improve fund utilization, enhance farmer outreach, and strengthen industry collaborations. By adopting technology-driven solutions and expanding private sector participation, PMDKY could serve as a model for agricultural transformation across developing economies.
Contributor
Tanushree Bora is a Research Intern at IMPRI and a student from Lady Shri Ram College, University of Delhi. She is passionate about International Relations, Conflict Transformation, and Gender Studies. She aims to contribute to meaningful dialogue and policy frameworks that promote sustainable and inclusive peace.
Acknowledgment
The author extends sincere gratitude to Dr. Arjun Kumar and Aasthaba Jadeja for their invaluable guidance and support.
References
Read more at IMPRI:
National Supercomputing Mission-2015
National Urban Livelihoods Mission 2013: Creating a safe haven for the urban poor
