In a move to continue providing affordable credit to farmers, the Union Cabinet on Wednesday approved the extension of the Modified Interest Subvention Scheme (MISS) for the financial year 2025-26. The decision aims to ensure the availability of short-term credit at subsidized rates through the Kisan Credit Card (KCC) platform.
Addressing the media, Information and Broadcasting Minister Ashwini Vaishnaw announced that the scheme will continue with the existing 1.5% interest subvention to lending institutions, at a fiscal cost of ₹15,640 crore to the exchequer.
Key Features of MISS 2025-26:
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Interest Rate: Farmers will continue to receive short-term loans up to ₹3 lakh at a subsidized interest rate of 7%.
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An additional Prompt Repayment Incentive (PRI) of 3% is available for timely repayment, effectively reducing the interest to 4%.
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For activities such as animal husbandry and fisheries, the scheme offers interest subvention on loans up to ₹2 lakh.
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The scheme will maintain the existing structure and components, with no new changes proposed.
Why It Matters:
MISS is a Central Sector Scheme designed to ensure institutional credit flow to the agricultural sector, especially for small and marginal farmers. The government emphasized that the continuation of the scheme is vital for enhancing agricultural productivity, promoting financial inclusion, and sustaining rural credit systems.
With over 7.75 crore KCC accounts in India, the scheme has significantly boosted institutional credit disbursal, rising from ₹4.26 lakh crore in 2014 to ₹10.05 lakh crore by December 2024. Overall agricultural credit flow surged from ₹7.3 lakh crore in 2013-14 to ₹25.49 lakh crore in 2023-24.
Government’s Commitment
“The Cabinet’s decision underscores our commitment to doubling farmers’ income and strengthening the rural economy,” the official release stated. Given current trends in MCLR and repo rates, maintaining the 1.5% subvention is essential to support rural and cooperative banks and to keep credit affordable for the farming community.
