Empowering Growers: From 40 Lakh Crore to 170 Lakh Crore; How Modi Govt Transformed Farmer Finance

By Suresh Unnithan

Indian Farmers have long been the unsung heroes sustaining a nation of over 1.44 billion. Yet, political narratives often paint a distorted picture. Widespread allegations claim that the Narendra Modi-led National Democratic Alliance (NDA) government has neglected farmers, doing little compared to the Manmohan Singh-led United Progressive Alliance (UPA) era. But data tells a different story—one of exponential growth in support, from credit disbursements to innovative schemes like Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) and Pradhan Mantri Fasal Bima Yojana (PMFBY). Drawing from official reports and economic trends, this comparison reveals how the NDA has built upon UPA foundations, scaling up institutional credit and direct benefits to unprecedented levels, while addressing persistent challenges like debt and crop risks.

The UPA government, in power from 2004 to 2014, inherited an agricultural sector grappling with low productivity, high indebtedness, and reliance on informal moneylenders. Under Prime Minister Manmohan Singh, a key policy was the 2004 “doubling of agricultural credit” initiative, aimed at boosting formal lending over three years. This led to robust growth rates, averaging around 35% annually in the early years (2004-07). Annual ground-level agricultural credit (GLC) disbursements, which include short-term crop loans and term loans for investments like machinery and irrigation, started at approximately ₹1.05-1.25 lakh crore in FY 2004-05. By the mid-period, around FY 2008-09, it reached ₹3 lakh crore, and by FY 2013-14—the final year under UPA—it stood at ₹7.3-7.7 lakh crore.

Over the decade, the cumulative GLC disbursed totalled around 35-40 lakh crores, according to NABARD and RBI data trends. This expansion was channelled through institutional sources like commercial banks, cooperative banks, and regional rural banks, reducing dependence on exploitative informal credit. Short-term crop loans, often via Kisan Credit Cards (KCC), formed a significant portion, helping farmers with working capital for seeds, fertilizers, and labour. The UPA also introduced the Agricultural Debt Waiver and Debt Relief Scheme (ADWDRS) in 2008, waiving ₹71,680 crore in loans for about 3.7 crore farmers, providing immediate relief amid rising suicides and economic distress.

These efforts aligned with broader goals like the National Food Security Mission (NFSM), launched in 2007, which increased foodgrain production from 218 million tons in 2007 to 265 million tons by 2014. Irrigation projects and subsidies on inputs like fertilizers helped, though challenges persisted: regional imbalances in credit distribution, with southern and western states benefiting more than the east and northeast, and delays in disbursements. The share of agriculture in GDP dipped from 14.6% in 2009-10 to 13.9% in 2013-14 at constant prices, reflecting structural issues. Real farm wages grew at 4.1% annually during UPA’s terms, a respectable pace, but poverty reduction in rural areas was uneven.

Enter the NDA era in May 2014, with Narendra Modi at the helm. Building on UPA’s momentum, the NDA accelerated credit flows, emphasizing inclusivity for small and marginal farmers—who constitute 86% of holdings, averaging just 1.08 hectares. Starting from ₹8.5 lakh crore in FY 2014-15, GLC grew at an average annual rate of over 13% through FY 2023-24. By FY 2023-24, actual disbursements hit ₹25.48 lakh crore, more than tripling the UPA’s peak. For FY 2024-25, the target is ₹27.5 lakh crore, with ₹19.28 lakh crore already disbursed by December 2024—70% of the goal in nine months—projecting a full-year total of ₹27-28 lakh crore.

Cumulatively, from FY 2014-15 to partial FY 2025-26 (as of December 20, 2025), the total GLC stands at approximately 170 lakh crores. This dwarfs the UPA’s 35-40 lakh crores over a similar decade. Short-term crop loans remain dominant (60-70%), with KCC outstanding limits surging from ₹4.26 lakh crore in 2014 to over ₹10 lakh crore recently. Term loans for allied sectors like dairy and fisheries have also expanded. Targets have risen more than threefold, from ₹8 lakh crore in FY 2014-15 to ₹27.5 lakh crore in FY 2024-25, consistently exceeded by banks. Small and marginal farmers’ share in credit rose from 57% in 2014-15 to 76% recently, enhancing productivity and reducing moneylender exploitation.

Beyond credit, the NDA introduced transformative schemes absent during UPA. PM-KISAN, launched in 2019, provides direct income support of ₹6,000 annually (in three ₹2,000 installments) to over 11 crore farmers. As of December 2025, over ₹4.09 lakh crore has been disbursed across 21 installments, one of the world’s largest direct benefit transfers (DBT). This cash infusion, separate from loans, helps with household expenses and investments, bypassing intermediaries. UPA had no equivalent; its focus was more on waivers, which, while helpful, were one-off and criticized for moral hazard.

Another NDA flagship, PMFBY (launched 2016), offers comprehensive crop insurance against natural hazards like floods, droughts, and pests. Farmers pay minimal premiums—2% for kharif crops, 1.5% for rabi, and 5% for horticulture—with the rest subsidized. Over nine years, claims worth ₹1.75 lakh crore have been paid to 23.22 crore farmers, far exceeding premiums collected. Recent expansions cover waterlogging and wild animal damage, addressing gaps in UPA-era schemes like the Weather-Based Crop Insurance Scheme (WBCIS), which were narrower and less integrated. PMFBY has enrolled over 50 crore farmers, providing a safety net that UPA’s fragmented insurance efforts couldn’t match.

Comparatively, NDA’s agriculture budget ballooned from ₹27,662 crore under UPA to ₹1.25 lakh crore, reflecting prioritized spending. MSP procurement for paddy and wheat surged: UPA paid ₹4.40 lakh crore for paddy and ₹2.27 lakh crore for wheat (2004-13); NDA disbursed ₹12.51 lakh crore for paddy alone by 2025. While UPA’s MSP hikes were higher in percentage for some crops (e.g., 20 out of 22 mandated crops saw better increases 2004-14 vs. 2014-24), NDA’s absolute volumes and coverage are larger, amid higher inflation.

Impacts diverge too. UPA reduced poverty by 2.46% annually during its second term; NDA managed 0.3% in its second, per some analyses, but NDA halved farmer suicides (1.7 lakh under UPA vs. fewer under NDA). Real farm wages grew slower under NDA (1.3% vs. UPA’s 4.1%), but debt surged 58% since 2013, highlighting ongoing issues. Opposition voices, like Congress leader Pawan Khera, credit UPA for foundational reforms like the Green Revolution and NFSM, while criticizing NDA for unmet promises like doubling incomes by 2022 (actual growth: 2.8% annually 2015-19). Government counters with data: NDA spent ₹10.75 lakh crore on farmers vs. UPA’s ₹1.51 lakh crore.

Yet, biases abound. Pro-NDA sources emphasize scale; critics highlight inequities, like GST on farm inputs raising costs. Farmer protests under NDA, claiming over 750 lives, underscore discontent, though schemes like urea subsidies (saving farmers ₹12 lakh crore via DBT) provide relief.

In conclusion, while UPA laid crucial groundwork with credit expansion and waivers, NDA has amplified it through massive disbursements, direct transfers, and risk mitigation—totalling over 170 lakh crores in credit alone, plus ₹4.09 lakh crore via PM-KISAN and ₹1.75 lakh crore in insurance claims. This isn’t neglect; it’s evolution. As India eyes self-reliance, the real measure is whether farmers thrive beyond politics. Data suggests NDA’s contributions have outpaced UPA’s, but true progress demands addressing debt, climate risks, and equitable growth for all.

*Research by Nanditha Subhadra