This article examines the priority accorded to agriculture and allied sectors in India’s public expenditure over the last two decades, with specific attention to budgetary spending by the eastern region states. It observes that one of the important reasons for the slowdown of growth in Indian agriculture seems to have been the stagnation in public expenditure on the overall rural economy (i.e. Agriculture and Allied Activities, Irrigation and Flood Control, Village and Small Industries, Rural Development and Special Area Programmes) since the early 1990s. The falling priority given to the rural economy in the last three Five Year Plans of the country would have affected the eastern region states more adversely due to their weaker fiscal health and less developed agricultural sectors. The article also argues that there is a need to redesign the policy framework and provide adequate budgetary support for agricultural activities in dryland/rainfed areas in the eastern region states.