Executive Summary:
The Government has approved the continuation of the Modified Interest Subvention Scheme (MISS) for the fiscal year 2025-26. The scheme aims to provide affordable short-term credit to farmers through Kisan Credit Cards (KCC). The scheme facilitates concessional interest rates and includes provisions for interest subvention to financial institutions and prompt repayment incentives for farmers. The agriculture credit target for the year 2025-26 has been set at Rs 32.50 lakh crore.
Key Points / Main Content:
Modified Interest Subvention Scheme (MISS) Continuation:
- The government has approved the continuation of MISS for FY 2025-26.
- The scheme aims to provide concessional interest rates on short-term agricultural loans to farmers via KCCs.
Interest Subvention and Loan Details:
- Farmers receive KCC loans at a subsidized interest rate of 7%.
- Financial institutions receive an upfront interest subvention (IS) of 1.5%.
- Farmers who promptly repay loans receive a 3% Prompt Repayment Incentive (PRI), reducing the effective interest rate to 4%.
- IS and PRI benefits are available for loan limits up to Rs. 3 lakhs.
- For short-term loans for allied activities other than crop husbandry, the loan amount is limited to Rs. 2 lakhs.
- Total interest subsidy (IS and PRI) disbursed under MISS for the year 2024-25 is Rs. 17811.72 crore.
Implementation and Credit Distribution:
- Rural Cooperative Banks (RCBs), including District Central Cooperative Banks (DCCBs) and State Cooperative Banks (StCBs), are implementing the KCC scheme.
- Operative KCC accounts in RCBs as of March 31, 2025, numbered 3,34,29,368, with credit extended amounting to Rs. 2,20,260.24 crore.
- Total operative KCC accounts across PSBs, PvBs, RRBs, and RCBs as of March 31, 2025, numbered 7,72,10,538, with credit extended amounting to Rs. 10,20,071.63 crore.
Government Initiatives to Strengthen Rural Credit:
- The government sets Ground Level Credit (GLC) targets for the agriculture sector.
- The average achievement under agriculture credit during the last 5 years (2020-21 to 2024-25) has been nearly 113% of the target.
- The agriculture credit target for 2025-26 has been set at Rs. 32.50 lakh crore, including a sub-target of Rs. 5.0 lakh crore for Animal Husbandry, Dairying, and Fisheries farmers.
- Banks are mandated to provide 18% of their total loans to the agriculture and allied sector as per Priority Sector Lending (PSL) regulations.
- A sub-limit has been fixed for small and marginal farmers, which is currently 10%.
- The government is implementing the 100% centrally funded Modified Interest Subvention Scheme (MISS) across various States and UTs.
- The number of operative KCC accounts reached 7.72 crore in 2024-25.
- Credit extended increased from Rs. 4.26 lakh crore in 2013-14 to Rs. 10.20 lakh crore in 2024-25.
- Farmers have availed Rs. 1.62 lakh crore as interest subvention on loans through KCCs over the past eleven years.
- Total credit flow to the agriculture sector has grown nearly four times, rising from Rs. 7.3 lakh crore in 2013-14 to Rs. 28.69 lakh crore in 2024-25.
- RBI has increased the collateral-free loan limit in KCC from Rs. 1.6 lakh to Rs. 2 lakh, effective January 1, 2025.
Impact Analysis:
Farmers:
Impact: Access to affordable short-term agricultural credit through KCCs at a subsidized interest rate (7%), potentially reduced to 4% with prompt repayment. Increased collateral-free loan limit up to Rs. 2 lakhs.
Action Required: Utilize KCCs for working capital requirements and ensure timely repayment to avail the 3% PRI.
Financial Institutions (Banks, Cooperatives):
Impact: Provision of 1.5% upfront interest subvention from the government. Increased lending opportunities in the agriculture sector.
Action Required: Implement the MISS scheme, provide KCC loans to farmers, and ensure proper accounting and disbursement of funds.
Government:
Impact: Achievement of agricultural credit targets and promotion of agricultural growth.
Action Required: Monitor the implementation of the MISS scheme, allocate funds for interest subvention, and conduct awareness campaigns.
RBI and NABARD:
Impact: Ensuring effective credit flow to the agriculture sector.
Action Required: Supervision of financial institutions and provision of necessary support for the successful implementation of the KCC scheme.
Key Entities Referenced
Modified Interest Subvention Scheme (MISS): A government scheme aimed at ensuring the availability of short-term credit to farmers at an affordable interest rate.
Kisan Credit Card (KCC): A credit card scheme to provide short-term agriculture operation loans to farmers.
Ministry of Agriculture and Farmers Welfare: The Indian government ministry responsible for agriculture and farmers' welfare.
Karnataka: A state in India, specifically mentioned in the context of farmers availing loans under the MISS.
Primary Agricultural Credit Societies: Cooperative institutions implementing the Modified Interest Subvention Scheme.
Rural Cooperative Banks (RCBs): Financial institutions, including District Central Cooperative Banks (DCCBs) and State Cooperative Banks (StCBs), implementing the Kisan Credit Card (KCC) Scheme.
Reserve Bank of India (RBI): India's central bank, involved in regulating and overseeing the Kisan Credit Card scheme.
National Bank for Agriculture and Rural Development (NABARD): An apex development finance institution in India, that is involved in agriculture and rural development.
GOVERNMENT OF INDIA
MINISTRY OF AGRICULTURE AND FARMERS WELFARE
DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE
LOK SABHA
UNSTARRED QUESTION No. 3857
TO BE ANSWERED ON THE 12TH AUGUST, 2025
MODIFIED INTEREST SUBVENTION SCHEME
3857. SHRI BASAVARAJ BOMMAI:
Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ(cid:874)ष एव ं (cid:873)कसान
क(cid:227)याण म(cid:287)ं ी be pleased to state:
(a) whether the Government approves continuation of Modified Interest Subvetnion
Scheme (MISS) aimed at ensuring the availability of short-term credit to farmers at
an affordable interest rate;
(b) if so, the details thereof and the number of farmers presently availing Short-Term
Agriculture Operation loans under the MISS through Kisan Credit Cards in the
country, State- wise particularly in the State of Karnataka;
(c) the latest total amount of interest subvention disbursed to financial institutions
under the scheme;
(d) whether some of the Primary Agricultural Credit Societies and other cooperative
institutions are implementing the scheme and if so, the details thereof and the
volume of credit routed through them; and
(e) the steps taken by the Government to strengthen the rural credit ecosystem and
to boost agricultural growth through timely and affordable credit access?
ANSWER
THE MINISTER OF STATE FOR AGRICULTURE AND FARMERS WELFARE
कृ(cid:874)ष एव ं (cid:873)कसान क(cid:227)याण रा(cid:207)य म(cid:287)ं ी (SHRI RAMNATH THAKUR)
(a) to (c): Yes sir. The Government has approved the continuation of the Modified
Interest Subvention Scheme (MISS) for the F.Y. 2025-26. This scheme aims to
provide concessional interest rates on short-term agricultural loans obtained by
farmers through Kisan Credit Cards (KCC) for their working capital requirements.
Under this scheme, farmers receive KCC loans at a subsidized interest rate
of 7%. To facilitate this, an up front interest subvention (IS) of 1.5% is provided to
financial institutions. Additionally, farmers who repay their loans promptly receive a
3% Prompt Repayment Incentive (PRI), effectively reducing the interest rate to 4%
per annum. The benefits of IS and PRI are available for loan limits up to Rs.3 lakhs.
However, if the short-term loan is taken for allied activities (other than crop
husbandry), the loan amount is limited to Rs.2 lakhs only.Details of State wise number of operative KCC accounts including
Karnataka, as on 31 March 2025, is at Annexure-I. The total interest subsidy (both
Interest Subvention and Prompt Repayment Incentive) disbursed under MISS for
the year 2024-25 is as under:
(Amount in Rs. Cr)
S. No. Year Disbursement of funds
1. 2024-25 17811.72
(d): Yes Sir. Rural Cooperative Banks (RCBs) viz., District Central Cooperative
Banks (DCCBs) and State Cooperative Banks (StCBs) are implementing the Kisan
Credit Card (KCC) Scheme The details of Operative KCC accounts in Rural
Cooperative Banks (RCBs) as on 31 March 2025 are as under:
(Amount in Rs. Cr)
No. of Operative Credit
Bank
KCCs Extended
Rural Cooperative Banks 3,34,29,368 2,20,260.24
Total Operative KCC (PSBs, PvBs,
7,72,10,538 10,20,071.63
RRBs and RCBs)
Source: RBI and NABARD
PSBs: Public Sector Banks; PvBs: Private Sector Banks; RRBs: Regional Rural
Banks
(e): The following steps have been taken to strengthen the rural credit ecosystem
and to boost agriculture growth through timely and affordable credit:-
i. It has been constant endeavour of the Government to boost agriculture
sector through effective and hassle-free credit, for which the Government
sets Ground Level Credit (GLC) Target for agriculture sector. The average
achievement under agriculture credit during the last 5 years (2020-21 to
2024-25) has been nearly 113% of the target. Agriculture credit target for
year 2025-26 has been set at ₹32.50 lakh crore with a sub-target of ₹ 5.0
lakh crore for Animal Husbandry, Dairying and Fisheries farmers.
ii. As per priority Sector Landing (PSL) regulation government has mandated
that banks will provide 18% of their total loans to agriculture and allied
sector. Since 2016 a sub limit has been fixed for small and marginal farmers
which at present is 10%.iii. The government is implementing a 100% centrally funded Central Sector
Scheme known as the Modified Interest Subvention Scheme (MISS) across
various States and UTs in pan India. This scheme aims to provide
concessional interest rates on short-term agricultural loans obtained by
farmers through Kisan Credit Cards (KCC) for their working capital
requirements.
iv. Due to KCC-MISS scheme access to easy and affordable credit has
increased significantly to farmers to meet their operational needs. The
number of operative KCC accounts has reached to 7.72 crore in 2024–25,
which has contributed to an increase in credit extended amount from ₹4.26
lakh crore in 2013–14 to ₹10.20 lakh crore in 2024–25.
v. Over the past eleven years, farmers has availed ₹1.62 lakh crore as interest
subvention on loans through KCCs.
vi. Similarly, the total credit flow to the agriculture sector has nearly grown four
times rising from ₹7.3 lakh crore in 2013–14 to ₹28.69 lakh crore in 2024–
25.
vii. Recently, RBI has increased collateral free loan limit in KCC for existing Rs
1.6 lakh to Rs 2 lakh w.e.f., 01.01.2025. This move enhances credit
accessibility, particularly for small and marginal farmers, who benefit from
reduced borrowing costs and the removal of collateral requirements.
viii. Government have been taking multiple initiative to make this accessible to
farmers through regular IEC campaigns organized by banks, State
Government/ Central Government, RBI, NABARD, etc, besides, technology
intervention like Kisan Rin Portal (KRP).
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