The Union Cabinet, chaired by Prime Minister Narendra Modi, approved:
- Continuation of the Interest Subvention (IS) component under the Modified Interest Subvention Scheme (MISS) for FY 2025–26.
- Associated fund arrangements to ensure uninterrupted implementation.
About the Scheme
- MISS is a Central Sector Scheme aimed at:
- Providing short-term crop credit to farmers at affordable interest rates.
- Promoting financial inclusion and productivity in agriculture.
Key Features of MISS
- Loan Coverage:
- Short-term loans up to ₹3 lakh through Kisan Credit Cards (KCC).
- Loans for animal husbandry and fisheries up to ₹2 lakh also covered.
- Interest Rates:
- Base interest rate: 7%
- 1.5% interest subvention to banks → net interest rate: 5.5%
- 3% Prompt Repayment Incentive (PRI) for timely repayment → effective interest rate: 4%
- Loan Tenure & Flexibility:
- Revolving credit for up to 5 years.
- Flexible withdrawals as per cropping cycle needs.
- Collateral-Free Loans:
- Loans up to ₹2 lakh require no collateral.
- Disaster Support:
- Interest relief for up to 1 year in case of natural calamities.
- Extended relief of up to 5 years in case of severe disasters.
- No Change in Scheme Structure:
- Existing structure and benefits to continue unchanged.
Why Continuation is Important
- Ensures the continued flow of institutional credit to farmers.
- Supports small and marginal farmers (who hold 76% of KCC accounts).
- Helps in doubling farmers’ income, in line with the Government’s long-term objective.
Credit Growth under KCC and Agriculture Sector
- KCC Credit Flow:
- ₹4.26 lakh crore in 2014 → ₹10.05 lakh crore by Dec 2024
- Total Agricultural Credit Flow:
- ₹7.3 lakh crore (2013–14) → ₹25.49 lakh crore (2023–24)
- Institutional Credit Share:
- Now over 75%, reducing reliance on informal lenders.
Improvement in NPAs (Non-Performing Assets)
- Overall agriculture NPAs improved:
- From 9% (2019) → 7.2% (2023)
- KCC NPAs reduced:
- From 66% (2021–22) → 11.5% (2023–24)
Digital Reforms for Transparency
- Launch of the Kisan Rin Portal (KRP) in August 2023:
- Tracks interest subvention claims digitally.
- Promotes transparency, faster disbursal, and better monitoring.
- Benefits both banks and farmers.
