New Delhi: The government on Wednesday approved continuation of Modified Interest Subvention Scheme (MISS) for 2025-26 under which farmers get short-term credit at affordable rate through Kisan Credit card (KCC).
The decision regarding continuation of MISS for fiscal year 2025-26 with existing 1.5 per cent interest subvention was taken by the Union Cabinet, informed Information and Broadcasting Minister Ashwini Vaishnaw.
The continuation of the scheme will cost exchequer Rs 15,640 crore.
MISS is a Central Sector Scheme aimed at ensuring the availability of short-term credit to farmers at an affordable interest rate through KCC.
Under MISS, farmers get short-term loans of up to Rs 3 lakh through KCC at a subsidized interest rate of 7 per cent, with 1.5 per cent interest subvention provided to eligible lending institutions.
Additionally, farmers repaying loans promptly are eligible for an incentive of up to 3 per cent as Prompt Repayment Incentive (PRI), effectively reducing their interest rate on KCC loans to 4 per cent.
For loans taken exclusively for animal husbandry or fisheries, the interest benefit is applicable up to Rs 2 lakh.
An official release said that no changes have been proposed in the structure or other components of the scheme.
There are more than 7.75 crore of KCC accounts in the country.
The continuation of the support is critical to sustaining the flow of institutional credit to agriculture, which is vital for enhancing productivity and ensuring financial inclusion for small and marginal farmers, the release said.
Institutional credit disbursement through KCC increased from Rs 4.26 lakh crore in 2014 to Rs 10.05 lakh crore by December 2024.
Overall agricultural credit flow also rose from Rs 7.3 lakh crore in 2013-14 to Rs 25.49 lakh crore in 2023-24.
“Given the current lending cost trends, median MCLR (Marginal Cost of Funds-based Lending Rate) and repo rate movements, retaining the interest subvention rate at 1.5 per cent remains essential to support rural and cooperative banks and ensure continued access to low-cost credit for farmers,” the release said.
It further said the Cabinet’s decision reinforces the government’s unwavering commitment to doubling farmers’ income, strengthening the rural credit ecosystem, and boosting agricultural growth through timely and affordable credit access.
