Union Budget 2026–27 backs cooperative dairying, aligns with Viksit Bharat 2047 vision: NDDB Chairman
02 February 2026, New Delhi: The Union Budget 2026–27 places renewed emphasis on animal husbandry and cooperative dairying, aligning sectoral reforms with the long-term vision of Viksit Bharat 2047, said Dr. Meenesh Shah, Chairman of the National Dairy Development Board (NDDB).
Dr. Shah said the Budget signals a structural push to raise farm incomes, strengthen cooperatives, and promote entrepreneurship across livestock and dairy value chains—areas that underpin rural livelihoods and inclusive growth.
Higher outlay for animal husbandry
Recognised as a key growth engine within agriculture and allied activities, animal husbandry has received an allocation of ₹6,153.46 crore, marking a 16% increase over the previous year. The Budget also announces a ₹500-crore Integrated Scheme for Entrepreneurship Development, aimed at expanding employment through credit-linked subsidies, modernising livestock enterprises, building integrated dairy and poultry value chains, and promoting Livestock Farmer Producer Organisations.
Veterinary capacity and infrastructure
To address service gaps across India’s 53 crore livestock, including 30 crore dairy animals, the Budget proposes the addition of 20,000 veterinary professionals. A loan-linked subsidy scheme will support the creation of new veterinary and private colleges, hospitals, laboratories and breeding facilities. The framework also encourages global collaborations to accelerate innovation in animal health and productivity.
Tax relief for cooperatives, higher farmer pay-outs
Building on existing provisions that allow full deduction of profits for primary cooperative societies supplying milk, oilseeds, fruits or vegetables produced by members, the Budget extends the benefit to cattle feed. With primary cooperatives selling around 102 lakh metric tonnes of cattle feed annually, the move is expected to lower tax burdens and improve member returns. Dairy cooperatives already return over 75% of the consumer rupee to producers; the extension is expected to further enhance pay-outs.
The Budget also allows inter-cooperative society dividend income as a deduction under the new tax regime to the extent it is redistributed to members—supporting investments in multi-state cooperatives under Sahkar se Samriddhi. Additionally, a three-year dividend income exemption for notified national cooperative federations on investments made in companies up to 31 January 2026, provided the income is passed on to member cooperatives, is expected to strengthen institutional profitability.
Bio-CNG and circular economy
The Centralised Bio-CNG model—converting dairy waste into clean transport fuel and organic fertiliser—receives a boost with the Budget’s decision to exclude the entire value of biogas while calculating central excise duty on biogas-blended CNG. The measure is expected to support large-scale Bio-CNG projects nationwide, advance circular economy objectives, and promote natural farming through organic fertiliser by-products.
Overall assessment
Dr. Shah said the Union Budget 2026–27 addresses multiple structural constraints across agriculture, dairy and allied sectors—improving capital efficiency, easing tax distortions for cooperatives, and strengthening income and employment prospects for farmers—while remaining aligned with the longer-term development roadmap for 2047.
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