Centre extends interest subvention scheme for farmers by another year

New Delhi [India], May 28 (ANI): The Union Cabinet on Wednesday approved the continuation of the interest subvention component under the Modified Interest Subvention Scheme (MISS) for farmers for the financial year 2025-26, and approved required fund arrangements.

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It is a Central Sector Scheme aimed at ensuring the availability of short-term credit to farmers at an affordable interest rate through Kisan Credit card (KCC).

Under the Scheme: Farmers received short-term loans of up to Rs 3 lakh through Kisan Credit Cards (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.

No changes have been proposed in the structure or other components of the scheme by the Cabinet.

"There are more than 7.75 crores of KCC accounts in the country. The continuation of this 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 government said in a statement.

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.

"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," the statement added. (ANI)

(The story has come from a syndicated feed and has not been edited by the Tribune Staff.)