NEW DELHI: India’s Prime Minister Narendra Modi is considering three options for a relief package to help farmers suffering because of low crop prices at a cost of as much as 3 trillion rupees ($42.82 billion), according to three government sources.
The possibilities are a direct payment to all landowning farmers, compensation for those who sold produce below government prices, and a loan forgiveness program.
Modi is desperate to claw back support among India’s 263 million farmers and their many millions of dependents after his Hindu nationalist Bharatiya Janata Party (BJP) lost power earlier this month to the opposition Congress in three big heartland states. A general election has to be held by May.
The government is keen to find a way to get money to farmers as quickly and simply as possible so that they can feel the benefits before the election. That could come at a major cost to its budget, which is already strained because of lower-than-expected tax revenues, and is likely to undermine its fiscal deficit target for the year ending in March.
The BJP won much of the rural vote at the last election in 2014 but there has been increasing anger with the government in the countryside because Modi has tried to get the market to play a bigger role in setting prices and sought to reduce government intervention. Healthy crop production in the past two years and lower than expected exports have combined to drive prices down at a time when some farm costs have been surging.
The quickest option, and currently the most favored inside the government, is to directly pay landowning farmers 1,700-2,000 rupees per acre, said two of the sources, including one at the farm ministry. They spoke on condition they not be identified.
The finance ministry estimates such a scheme, which means farmers would get the money before next sowing season, could cost up to 1 trillion rupees.
The second option would be to compensate farmers for the difference they received by selling their produce in the market compared with the government price that is set for grains and some other products, one of the finance ministry officials said. That would be cheaper, costing about 500 billion rupees, the official added.
That option has some major drawbacks, though, as government support schemes have lost credibility because they don’t cover all farm produce and claiming from the government has often proven difficult. Middlemen have also taken advantage of such schemes by persuading the farmer to give them part of any subsidy or compensation.
The most expensive option — at a cost of as much as 3 trillion rupees — and the least favored inside the government, would involve writing off farm loans by up to 100,000 rupees per person. That is a policy that is being pushed hard by the opposition Congress party.
Modi in series of discussions
“Broadly speaking, the government is considering three options – writing off some farm loans, introducing a price differential plan and direct transfer of cash to farmers,” said a source at the farm ministry.
All three sources, said that the government has not yet discussed the ways in which it plans to fund any of the schemes.
In the last week Modi had a series of meetings with Finance Minister Arun Jaitley, Agriculture Ministry Radha Mohan Singh and officials from its top think tank Niti Aayog to weigh its options for a farm relief program.
BJP President Amit Shah also met Agriculture Minister Singh last night to discuss the proposals, according to a senior cabinet minister, who did not want to be named. The government is also planning to buttress any package by revising the existing crop insurance policy to facilitate easier settlement of claims and also give greater non-collateralized credit assess to farmers, the minister said.
Modi considers three options to aid Indian farmers hit by low crop prices
Modi considers three options to aid Indian farmers hit by low crop prices
- The possibilities are a direct payment to all landowning farmers, compensation for those who sold produce below government prices, and a loan forgiveness program
- Modi is desperate to claw back support among India’s 263 million farmers and their many millions of dependents
UAE’s residential real estate market to see softer home sales
- Moody’s sees mild softening of prices over the next 12 - 8 months as rising completions add supply
RIYADH: The UAE’s residential real estate market is expected to see a modest decline in developer sales and a mild softening of prices over the next 12 to 18 months as rising completions add supply, Moody’s said.
Despite near-term easing, the credit ratings agency noted that developers are supported by strong revenue backlogs and solid financial positions, while regulatory measures have reduced banks’ exposure to the construction and property sectors, helping to preserve robust solvency and liquidity buffers across the financial system.
The broader trend is reflected in the UAE’s real estate market, which recorded a strong performance during the first three quarters of 2025, according to Markaz.
In Dubai, transaction values increased 28.3 percent year on year to 554.1 billion Emirati dirhams ($150.88 billion), while Abu Dhabi recorded total sales of 58 billion dirhams, up 75.8 percent year on year. The number of transactions in Abu Dhabi rose 42.3 percent to 15,800.
The report said: “After five years of extraordinary growth in the UAE’s residential real estate market, particularly in Dubai, we expect developer sales to decline modestly and some price softening over the next 12 to 18 months as rising completions add supply.
“From 2026 to 2028, around 180,000 new units will be completed in Dubai, a significant increase from prior years that is likely to weigh on demand and slow price growth.
“However, fundamentals remain supportive, underpinned by continued population growth and an influx of high-net-worth individuals. Rated developers’ credit quality will remain resilient, supported by strong revenue backlogs, front-loaded payment plans and solid financial positions.”
Munir Al-Daraawi, founder and CEO of Dubai-based Orla Properties, told Arab News the Moody’s report underscores what the firm is seeing on the ground, namely “a market that is successfully transitioning from a period of extraordinary growth to one of sustainable stability.”
He added: “While a mild softening of prices and a modest decline in sales are anticipated over the next 12 to 18 months, these are natural adjustments for a maturing global hub like Dubai.”
Al-Daraawi believes the the projected delivery of 180,000 units between 2026 and 2028 is not a cause for concern, but “a reflection of the UAE’s long-term appeal to high-net-worth individuals and a growing population.”
The CEO added: “The report rightly points out that fundamentals remain supportive, underpinned by Dubai’s 2040 Urban Master Plan and a significant influx of global talent.”
He went on to note that the resilience of the sector is further bolstered by the solid financial positions of developers and the strong regulatory measures that have shielded the banking sector from excessive exposure.
“This creates a robust ecosystem where credit quality remains high, even as we navigate a more competitive landscape. For boutique and luxury-focused developers, the current environment emphasizes the importance of quality, execution, and strategic capital allocation — factors that will continue to define the UAE’s real estate success story,” said Al-Daraawi.
The current environment emphasizes the importance of quality, execution, and strategic capital allocation.
Munir Al-Daraawi, Founder and CEO of Orla Properties
Riad Gohar, co-founder and CEO of BlackOak Real Estate, told Arab News that while Moody’s is correct to say that supply is rising, the conclusion of a broad slowdown ignores the structure of this current economic cycle.
He added: “First, this is not a debt-fueled market. Around 83 percent of Dubai residential transactions in 2024 and 2025 were non-mortgaged. That means the market is equity-driven, not credit-driven. When cycles are not built on leverage, corrections are typically shallow and segmented, not systemic. “
He added that the macroeconomic backdrop is stronger than in past cycles, driven by sustained non-oil gross domestic product increase, structural reforms, population growth, and capital inflows aligned with long-term national plans.
“Demand is not purely speculative; it is driven by migration, business formation, and wealth relocation,” the CEO said.
“Third, prime vs. non-prime must be separated. Any pressure from increased completions is more likely to affect marginal locations, not established prime areas supported by global HNWI inflows. Historically, prime assets in Dubai have shown resilience even during broader market pauses,” Gohar added.
He continued to clarify that for smaller developers, some may feel margin compression if sales moderate, but this becomes a consolidation phase, not a systemic risk.
“Banks’ real estate exposure has already declined to around 12 percent of total loans — from 19 percent in 2021 — and NPLs (non-performing loans) are low at 2.9 percent, meaning financial contagion risk is limited. Regulatory escrow structures and stricter oversight further reduce spillover,” the CEO said.
“We are in a capital-rich, cash-driven cycle, regulated market with strong GDP and population growth. If anything, weaker fringe players exiting would strengthen the core not destabilize it,” he said.
The Moody’s report highlighted that while most developers it rates will generate “substantial excess cash” over the next two to three years, there will be fewer opportunities to make significant investments, especially within the Dubai real estate market.
As well as prompting a shift toward corporate governance and, in particular, how developers deploy their rising liquidity, some firms are looking to diversify beyond their core business models.
“For instance, Binghatti has recently launched its first master-planned villa community, marking a departure from its historical focus on single-plot high-rise developments, as demand for villas continues to outperform that for apartments,” said the report.
It continued: “Others are looking beyond Dubai and the UAE for growth, whether through geographic diversification or expansion into unrelated sectors.
“For example, Damac’s owner, Hussain Sajwani, has announced significant planned investments in data center development across the US and Europe.
“Emaar continues to develop actively in Egypt and India and is evaluating potential entry into China and the US. Aldar has started development projects in the UK and Egypt, while Arada has begun building in Australia and the UK and Sobha is expanding into the US.”
