In a significant decision to support farmers across the country, the Union Cabinet has approved the continuation of the Modified Interest Subvention Scheme (MISS) for the financial year 2025–26. Under this scheme, 1.5% interest subvention will continue to be provided to banks for short-term crop loans up to ₹3 lakh issued through the Kisan Credit Card (KCC) platform.

This decision ensures that farmers will continue to get short-term agricultural loans at an effective interest rate of just 4%, provided they repay on time and avail the 3% Prompt Repayment Incentive (PRI).

What This Means for Farmers:

• Affordable Loans: Farmers can access working capital at just 4% interest, among the lowest rates globally.
• Flexible Credit Access: KCC offers revolving credit for up to five years, letting farmers withdraw funds as needed.
• Disaster Support: In case of natural calamities, interest relief continues for up to one year, and up to five years in severe disasters.
• Support for Small and Marginal Farmers: With 76% of agri-credit accounts now held by small farmers, the scheme continues to empower the backbone of Indian agriculture.
• No Collateral Needed: Farmers can avail loans up to ₹2 lakh without collateral.
• Boost in Farming Productivity: Easy credit allows use of better seeds, fertilizers, and tools, helping farmers improve yields and incomes.

Credit Growth Reflects Success:

• Credit flow through KCC has more than doubled from ₹4.26 lakh crore (2014) to ₹9.81 lakh crore (2024).
• Overall agricultural credit flow has risen from ₹7.3 lakh crore to ₹25.49 lakh crore during the same period.
• The share of institutional credit has grown to over 75%, reducing dependence on informal moneylenders.
• Non-Performing Assets (NPAs) in the agriculture sector improved from 8.9% in 2019 to 7.2% in 2023, while KCC NPAs declined from 12.66% in 2021–22 to 11.5% in 2023–24, indicating better credit performance and recovery.

Digital Reform for Transparency – Kisan Rin Portal (KRP):

The government has also launched the Kisan Rin Portal (KRP) to track interest subvention claims digitally. This portal ensures faster disbursement, greater transparency, and accountability, benefiting both farmers and banks.

Looking Ahead:

The government remains committed to enhancing the KCC limit to ₹5 lakh, as announced in the Union Budget 2025. While this proposal is under active consideration, today's Cabinet decision ensures seamless continuation of support to farmers under existing provisions.

***

PSF/KSR/AR

(Release ID: 2132139)