The Union Budget 2025-26 continues its emphasis on consumption-led growth, with significant allocations directed toward manufacturing and middle-class benefits. While fiscal prudence has been maintained with a deficit target of 4.4%, there remains considerable fiscal space to enhance investments in rural and tribal development, particularly in natural resource conservation. Addressing climate resilience and sustainable livelihoods should be a critical priority, especially given the rising vulnerabilities posed by extreme weather events and environmental degradation.
The Economic Survey 2024-25 highlighted the increasing impact of climate variability on agriculture, citing a 15% rise in crop area damage over the past three years. Erratic weather patterns, including heatwaves and unseasonal rainfall, have driven food price inflation, with tomato prices surging by 37% and onion prices remaining 20% above their five-year average. Despite these challenges, financial allocations for natural resource conservation remain inadequate.
The National Mission on Natural Farming has received a budgetary allocation of ₹516 crore in 2025-26, a substantial increase from the ₹100 crore allocated in the Revised Estimates (RE) of 2024-25. However, past utilisation rates have remained low, indicating structural inefficiencies in implementation. Similarly, the Green India Mission (GIM), a key program under the National Action Plan on Climate Change (NAPCC), has continued to receive ₹220 crore—unchanged for the past three years—despite the growing need for afforestation and ecological restoration.
The conservation of natural resources must be recognised as central to both economic stability and food security. Increased focus is required on budget utilisation efficiency and integration of conservation efforts with other rural development initiatives.
The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) has been allocated ₹86,000 crore in the current budget—no change from last year, raising concerns about stagnating rural employment support. This is particularly critical as MGNREGA has played a key role in funding land and water conservation projects at the village level. Meanwhile, the National Rural Livelihoods Mission (NRLM) has been allocated ₹19,005 crore, 26% more than last year, aligning with broader efforts to enhance economic resilience in rural areas.
The Dharti Aaba Jal Jeevan and Urja Abhiyan (DAJGUA), which focuses on water and energy security in tribal areas, was allocated ₹3,500 crore in the interim budget. This program, aimed at improving groundwater recharge, renewable energy adoption, and decentralized water management in tribal belts, presents an opportunity for commons-based conservation action. However, ensuring effective implementation will require stronger convergence mechanisms at the block and panchayat levels.
Coordination between these schemes is necessary to ensure that MGNREGA supports local conservation efforts, DAJGUA strengthens water and energy security, and NRLM provides livelihood opportunities that align with sustainable resource management. The block-level governance framework must be strengthened to facilitate the effective implementation of these programs.
With multiple central ministries engaged in rural and tribal development programs, fragmented decision-making remains a challenge. DAJGUA alone involves coordination across 17 central ministries, raising concerns about policy alignment and effective resource allocation. Transparent, real-time data-sharing mechanisms must be institutionalised to track progress, evaluate outcomes, and ensure accountability across government agencies.
The Panchayati Raj system was envisioned to bridge the gap between local needs and budget allocations. However, state and national-level budgeting processes often do not reflect ground realities. One of the key challenges remains weak coordination at the block level, where infrastructure and data availability gaps hinder the effective deployment of financial resources.
A more decentralised approach, integrating grassroots planning into state-level budgetary processes, is necessary. Strengthening institutional mechanisms for local decision-making will ensure that financial allocations better align with the development priorities of rural and tribal communities. Effective planning and implementation require robust deliberative processes that involve local stakeholders, community-based organizations, and governance actors. Establishing programmes and plans such as Multi-Actor Processes (collaborative platforms that bring together government agencies, local communities, and civil society organisations to facilitate joint planning and decision-making) and Block Resource Centers (collaborative platforms that bring together government agencies, local communities, and civil society organisations to facilitate joint planning and decision-making) could improve evidence-based decision-making at the block level. Additionally, improved coordination mechanisms can ensure that budget priorities align with implementation frameworks, reducing inefficiencies and delays in fund utilization.
A well-integrated approach to budgetary planning and implementation is essential for sustainable rural and tribal development. While the increased allocation for DAJGUA is a positive step, its success depends on coordination with existing livelihood and employment schemes. Strengthening local governance mechanisms, improving budget execution efficiency, and ensuring inter-ministerial collaboration will be critical to translating policy commitments into tangible outcomes.
Pravas Mishra is a public finance and policy researcher, and a budget and sectoral expert
