## Policy Summary: Modified Interest Subvention Scheme (MISS) Continuation
The Union Cabinet has approved the continuation of the Modified Interest Subvention Scheme (MISS) for the financial year 2025-26, maintaining the existing 1.5% interest subvention. This scheme aims to provide short-term credit to farmers at affordable rates through Kisan Credit Cards (KCC). Under the scheme, farmers can access loans up to Rs. 3 lakh at a subsidized interest rate of 7%. Farmers who repay promptly are eligible for an additional incentive of up to 3%, effectively reducing their interest rate to 4%. For loans specifically for animal husbandry or fisheries, the interest benefit applies up to Rs. 2 lakh. The structure and components of the scheme remain unchanged. The continuation of MISS is intended to sustain institutional credit flow to agriculture, enhance productivity, and promote financial inclusion for small and marginal farmers. Institutional credit disbursement through KCC has increased significantly in recent years, reaching Rs. 10.05 lakh crore by December 2024. Maintaining the 1.5% interest subvention is considered essential to support rural and cooperative banks and ensure continued access to low-cost credit, aligning with the government's commitment to doubling farmers' income and strengthening the rural credit ecosystem.
Key Entities Referenced
Cabinet: Refers to the Union Cabinet of the Government of India, chaired by the Prime Minister.
Modified Interest Subvention Scheme: A central sector scheme aimed at providing short-term credit to farmers at affordable interest rates. Abbreviated as MISS.
MISS: Abbreviation for the Modified Interest Subvention Scheme.
FY 202526: Financial year 2025-2026, the period for which the continuation of the MISS is approved.
Interest Subvention: A subsidy on the interest rate of loans, in this case, provided to farmers. Abbreviated as IS.
IS: Abbreviation for Interest Subvention.
28 MAY 2025: Date of the press release regarding the Cabinet's approval.
PIB Delhi: Press Information Bureau, Delhi, the agency that released the information.
Prime Minister Shri Narendra Modi: The Prime Minister of India, who chaired the Union Cabinet meeting.
Central Sector Scheme: A scheme funded and implemented by the central government.
Kisan Credit card: A credit card scheme for farmers to avail short-term loans. Abbreviated as KCC.
KCC: Abbreviation for Kisan Credit Card.
Rs.3 lakh: The maximum amount of short-term loan farmers can receive through KCC.
Prompt Repayment Incentive: An incentive for farmers who repay their loans promptly. Abbreviated as PRI.
PRI: Abbreviation for Prompt Repayment Incentive.
Rs.2 lakh: The maximum loan amount eligible for interest benefit for animal husbandry or fisheries.
Agriculture Credit: Refers to loans and financial assistance provided to the agricultural sector.
Rs.4.26 lakh crore: The amount of institutional credit disbursement through KCC in 2014.
December 2024: Reference date for the amount of institutional credit disbursement through KCC
Rs. 10.05 lakh crore: The amount of institutional credit disbursement through KCC by December 2024.
FY 201314: Financial year 2013-2014.
Rs.7.3 lakh crore: The overall agricultural credit flow in FY 2013-14.
FY 202324: Financial year 2023-2024.
Rs.25.49 lakh crore: The overall agricultural credit flow in FY 2023-24.
Kisan Rin Portal: A portal launched to enhance transparency and efficiency in claim processing. Abbreviated as KRP.
KRP: Abbreviation for Kisan Rin Portal.
August 2023: Date of launch of the Kisan Rin Portal.
median MCLR: Median Marginal Cost of Funds based Lending Rate.
repo rate: The rate at which the central bank lends money to commercial banks.
MJPSBM: Acronym for the source of the release, full form not specified in the text.
Release ID: 2131988: The identification number of the press release.
Cabinet
Cabinet approves continuation of Modified Interest
Subvention Scheme (MISS) for FY 2025-26 with
existing 1.5% Interest Subvention (IS)
Posted On: 28 MAY 2025 3:12PM by PIB Delhi
The Union Cabinet chaired by the Prime Minister Shri Narendra Modi today approved the continuation of
the Interest Subvention (IS) component under the Modified Interest Subvention Scheme (MISS) for the
financial year 2025-26, and approved required fund arrangements.
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 Scheme:
· Farmers received short-term loans of up to Rs.3 lakh through Kisan Credit Cards
(KCC) at a subsidized interest rate of 7%, with 1.5% interest subvention provided to
eligible lending institutions.
· Additionally, farmers repaying loans promptly are eligible for an incentive of up to
3% as Prompt Repayment Incentive (PRI) effectively reducing their interest rate on KCC
loans to 4%.
· For loans taken exclusively for animal husbandry or fisheries, the interest benefit is
applicable up to Rs.2 lakh.
No changes have been proposed in the structure or other components of the scheme.
There are more than 7.75 crores of KCC accounts in the country. The continuation of this 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.
Key highlights of Agriculture Credit:
· Institutional credit disbursement through KCC increased from Rs.4.26 lakh crore in 2014 to Rs.
10.05 lakh crore by December 2024.
· Overall agricultural credit flow also rose from Rs.7.3 lakh crore in FY 2013-14 to Rs.25.49
lakh crore in FY 2023-24.
· Digital reforms such as the launch of the Kisan Rin Portal (KRP) in August 2023 have
enhanced transparency and efficiency in claim processing.
Given the current lending cost trends, median MCLR and repo rate movements, retaining the interest
subvention rate at 1.5% remains essential to support rural and cooperative banks and ensure continued
access to low-cost credit for farmers.
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.
*****MJPS/BM
(Release ID: 2131988)