NEW DELHI: In a major step to support the farming community, the Union Cabinet, chaired by PM Narendra Modi, has approved the continuation of the Modified Interest Subvention Scheme (MISS) for the financial year 2025-26, retaining the existing 1.5% Interest Subvention (IS) for short-term agricultural loans.
The scheme ensures that farmers across the country receive short-term credit up to ₹3 lakh via Kisan Credit Cards (KCC) at a subsidized interest rate of 7%, with eligible lending institutions receiving a 1.5% subvention.
Farmers who repay their loans promptly can further benefit from an additional 3% Prompt Repayment Incentive (PRI), effectively bringing their interest rate down to 4%.
For farmers engaged exclusively in animal husbandry or fisheries, the interest benefit is available on loans up to ₹2 lakh. The structure and components of the scheme remain unchanged for FY26.
The Cabinet’s decision comes as part of the government’s ongoing efforts to enhance productivity, strengthen financial inclusion, and ensure affordable credit access for small and marginal farmers, who form the backbone of India’s agriculture sector.
Currently, there are over 7.75 crore KCC accounts in the country. The scheme plays a crucial role in sustaining institutional credit flow to agriculture, especially through rural and cooperative banks, amid current trends in lending costs and interest rate movements.
Key Highlights of Agricultural Credit Progress:
Institutional credit disbursement through KCC rose from ₹4.26 lakh crore (2014) to ₹10.05 lakh crore (December 2024).
Total agricultural credit flow increased from ₹7.3 lakh crore (FY 2013-14) to ₹25.49 lakh crore (FY 2023-24).
Digital reforms, such as the Kisan Rin Portal (KRP) launched in August 2023, have improved transparency and efficiency in claim processing.
The continuation of MISS underscores the Government’s commitment to doubling farmers’ income and boosting agricultural growth through timely and affordable credit support.
