The Union Cabinet on Wednesday extended the interest subvention scheme for farmers by one year, which will enable them to get loans at cheaper interest rates through Kisan Credit Card. Under this scheme, farmers who repay loans on time will get benefit at 4 percent interest rate. This decision is an important step towards promoting agricultural development and financial inclusion.
The Union Cabinet prolonged the Interest Subvention Scheme under the Modified Interest Scheme (MISS) for farmers by an additional year, covering the financial year 2025-26. This is a central sector initiative designed to offer farmers short-term loans at a reasonable interest rate via the Kisan Credit Card (KCC).
Through this program, farmers can obtain loans up to Rs 3 lakh at a 7 percent interest rate via the Kisan Credit Card (KCC), which reduces to 4 percent if repaid on time. This initiative has significantly accelerated the distribution of agricultural loans.
More than 7.75 crore KCC accounts
According to a government statement, there are over 77.5 million KCC accounts nationwide. Continuing this support is essential for sustaining the availability of institutional credit in agriculture. This is vital for boosting productivity and ensuring financial inclusion for small and marginal farmers. Loan disbursement through KCC rose from Rs 4.26 lakh crore in 2014 to Rs 10.05 lakh crore by December 2024.
The overall agricultural loan disbursement rose from Rs 7.3 lakh crore in 2013-14 to Rs 25.49 lakh crore in 2023-24. According to a statement, the Cabinet's decision underscores the government's dedication to doubling farmers' income, enhancing the rural credit framework, and fostering agricultural development through timely and cost-effective credit.