In a significant boost for India's farmers, the Union Cabinet on Wednesday, May 28, 2025, approved the extension of the Modified Interest Subvention Scheme (MISS) for the financial year 2025-26. This scheme is crucial for providing affordable short-term loans to farmers through the popular Kisan Credit Card (KCC).
The government has set aside ₹15,640 crore to continue this scheme, which is expected to help millions of farmers across the country. Information and Broadcasting Minister Ashwini Vaishnaw confirmed this decision after a meeting of the Cabinet Committee on Economic Affairs, led by the Prime Minister.
The MISS programme makes it easier for farmers to get loans at a very low interest rate. Farmers can get credit at a subsidised interest rate of 7%. Of this, the government pays 1.5% as a subsidy to the banks and other lending institutions.
Even better, if farmers repay their loans on time, they receive an additional 3% "Prompt Repayment Incentive". This means that farmers who are punctual with their payments effectively borrow money at an incredibly low rate of just 4%.
The structure of the scheme remains the same. It continues to cover short-term loans up to ₹3 lakh for general agriculture activities. For allied activities like animal husbandry and fisheries, farmers can get loans up to ₹2 lakh at these subsidised rates.
The Kisan Credit Card (KCC) was first introduced in 1998. Its main goal is to give farmers timely access to credit for their farming needs. This includes buying seeds, fertilisers, and even machinery, helping them avoid falling into debt traps. The KCC also works like a debit card, allowing farmers to withdraw cash when needed.
Government data shows that India currently has over 7.75 crore active KCC accounts. The amount of credit flowing through KCCs has grown significantly, from ₹4.26 lakh crore in 2014 to a massive ₹10.05 lakh crore by December 2024.
Officials have stated that extending the MISS is vital to ensure that low-cost credit continues to reach farmers through official banking channels. This support is particularly important for small and marginal farmers and helps to strengthen the overall rural credit system.
The official statement also highlighted that having a stable interest subsidy rate is essential, especially considering current lending trends and changes in interest rates set by the Reserve Bank of India. The total flow of agricultural credit has also seen a huge increase, rising from ₹7.3 lakh crore in 2013-14 to ₹25.49 lakh crore in 2023-24.
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The extension of the Modified Interest Subvention Scheme is a crucial move by the government to ensure that Indian farmers continue to have access to affordable loans. This ongoing support through the KCC and MISS will help farmers manage their finances better, invest in their farms, and contribute to the growth of India's agricultural sector.
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Published on: May 28, 2025, 5:19 PM IST
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