The Union Cabinet on Wednesday approved the 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). After the Union Cabinet meeting, Information and Broadcasting Minister Ashwini Vaishnaw informed that the decision to continue MISS for fiscal year 2025-26 with existing 1.5 percent interest subvention had been taken by the Cabinet.
The continuation of the scheme will cost exchequer Rs 15,640 crore.
Apart from approving the continuation of MISS for FY 2025-26, the Cabinet also approved required fund arrangements.
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What is Modified Interest Subvention Scheme (MISS)?
MISS 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 MISS Scheme:
· Farmers received short-term loans of up to Rs 3 lakh through Kisan Credit Cards (KCC) at a subsidized interest rate of 7 percent, with 1.5 percent interest subvention provided to eligible lending institutions.
· Additionally, farmers repaying loans promptly are eligible for an incentive of up to 3 percent as Prompt Repayment Incentive (PRI) effectively reducing their interest rate on KCC loans to 4 percent.
· 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 Kisan Credit Cards in the country.
The release stated that 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.
Institutional credit disbursement through KCC increased from Rs 4.26 lakh crore in 2014 to Rs 10.05 lakh crore by December 2024.
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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 release said, "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 percent remains essential to support rural and cooperative banks and ensure continued access to low-cost credit for farmers."
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.
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