Farmers who repay their loans on time are eligible for an additional 3 per cent interest subsidy under the Prompt Repayment Incentive (PRI), effectively lowering the interest rate on Kisan Credit Card (KCC) loans to 4.5 per cent
The Cabinet Committee on Economic Affairs (CCEA) has approved the continuation of the Modified Interest Subvention Scheme (MISS) for the 2025–26 fiscal year. Under this scheme, approximately 7.71 crore farmers will continue to receive short-term credit at subsidized interest rates via the Kisan Credit Card (KCC).
Information and Broadcasting Minister Ashwini Vaishnaw highlighted that the government will maintain the 1.5 per cent interest subvention, enabling farmers to access loans at a subsidized rate of 7 per cent. The estimated cost of this extension is Rs15,640 crore.
Farmers who repay their loans promptly are eligible for an additional 3 per cent subsidy under the Prompt Repayment Incentive (PRI), effectively lowering their interest rate on KCC loans to 4 per cent. Certain states further add 2–3 per cent, bringing credit costs down to as low as 1–2 per cent for some farmers.
Loans taken specifically for animal husbandry and fisheries qualify for interest benefits up to Rs 2 lakh. Out of the total KCC accounts, 47 lakh are linked to animal husbandry and dairy, while about 4.7 lakh are in the fisheries sector.
Since 2014, institutional credit through KCC has surged from Rs 4.26 lakh crore to Rs 10.05 lakh crore (as of December 2024). Overall agricultural credit has grown from Rs 7.3 lakh crore in 2013–14 to Rs 25.49 lakh crore in 2023–24.
The government emphasized that continuing the 1.5 per cent interest subvention is crucial amidst current lending rates to support rural and cooperative banks and ensure farmers’ access to affordable credit. This move aligns with the government’s goal of doubling farmers’ income and strengthening rural credit infrastructure.
