The Union Cabinet has taken a significant step to support farmers nationwide by approving the continuation of the Modified Interest Subvention Scheme (MISS) for the financial year 2025–26. This scheme allows banks to offer short-term crop loans up to ₹3 lakh through the Kisan Credit Card (KCC) platform with a 1.5% interest subvention, enabling farmers to avail loans at an effective interest rate of just 4%, provided timely repayment is made along with the 3% Prompt Repayment Incentive (PRI).
This continuation provides much-needed relief to farmers by ensuring affordable access to credit, which is vital for purchasing seeds, fertilizers, and modern agricultural tools. The KCC scheme, which allows flexible revolving credit for up to five years, has become an indispensable financial lifeline for farmers, especially small and marginal cultivators who hold 76% of the agricultural credit accounts. Furthermore, loans up to ₹2 lakh can be availed without collateral, easing barriers for many.
The government also recognizes the challenges faced by farmers during natural calamities by offering interest relief for up to one year, extendable to five years in severe disaster cases. This safety net is crucial for the resilience of agricultural communities who often face unpredictable weather and environmental risks.
The impact of these efforts is evident in the doubling of credit flow through KCC from ₹4.26 lakh crore in 2014 to ₹9.81 lakh crore in 2024. Agricultural credit overall has seen remarkable growth from ₹7.3 lakh crore to ₹25.49 lakh crore in the same period, with institutional credit now covering over 75% of the sector, thereby reducing dependence on informal and often exploitative moneylenders. Encouragingly, the sector has also shown improvement in loan recovery, with Non-Performing Assets (NPAs) dropping from 8.9% in 2019 to 7.2% in 2023, and KCC NPAs decreasing from 12.66% in 2021–22 to 11.5% in 2023–24.
To enhance transparency and efficiency, the government has introduced the Kisan Rin Portal (KRP), a digital platform that monitors interest subvention claims and ensures quicker disbursements. This move aims to build greater trust between farmers, banks, and the government by making the system more accountable and farmer-friendly.
Looking ahead, the government’s commitment to increasing the KCC limit to ₹5 lakh, as proposed in the 2025 Union Budget, promises even greater support to the farming community. While this enhancement is under consideration, the Cabinet’s approval today guarantees uninterrupted access to affordable credit, helping Indian farmers sustain and grow their livelihoods with dignity and hope.
