The Union Cabinet recently approved the extension of the Modified Interest Subvention Scheme (MISS) for the fiscal year 2025-26, which is crucial for supporting farmers in accessing affordable credit through the Kisan Credit Card (KCC) system.
- Continuation of Interest Subvention: The scheme will continue to provide a 1.5% interest subvention to make short-term loans affordable for farmers. Under this scheme, farmers can avail loans at a subsidized interest rate of 7%, leading to an effective borrowing rate of just 4% for those who repay on time, thanks to an additional 3% Prompt Repayment Incentive (PRI) .
- Financial Commitment: The government has allocated ₹15,640 crore to sustain the MISS for FY 2025-26. This funding will ensure the flow of institutional credit to over 7.75 crore KCC accounts across India, which is vital for enhancing agricultural productivity and supporting small and marginal farmers .
- No Structural Changes: There will be no changes to the existing structure or components of the scheme. It will continue to cover short-term loans for agriculture up to ₹3 lakh, and loans for allied activities like animal husbandry and fisheries up to ₹2 lakh, maintaining the focus on making lending viable for farmers .
- Impact on Agricultural Credit: The MISS aims to reinforce the rural credit ecosystem, as agricultural credit through KCC has significantly increased in recent years, growing from ₹4.26 lakh crore in 2014 to ₹10.05 lakh crore by December 2024. This extension is aligned with the government’s broader objective of doubling farmers’ income and strengthening their financial inclusion .
In summary, the extension of the Modified Interest Subvention Scheme is part of the government’s ongoing commitment to provide affordable financing to farmers, thereby enhancing food security and promoting agricultural growth in India.for govt scheme click www.eminentnews.com
