Centre Approves Continuation of Interest Subvention Scheme

The government on Wednesday approved continuation of Modified Interest Subvention Scheme (MISS) for 2025-26 under which farmers get short-term credit at affordable rates through Kisan credit card (KCC).

- Press Trust of India

NEW DELHI:

The decision regarding continuation of MISS for fiscal year 2025-26 with existing 1.5 per cent interest subvention was taken by the Union cabinet, informed information and broadcasting minister Ashwini Vaishnaw.

The continuation of the scheme will cost exchequer ₹15,640 crore.

MISS is a Central Sector Scheme aimed at ensuring the availability of short-term credit to farmers at an affordable interest rate through KCC.

Under MISS, farmers get short-term loans of up to ₹3 lakh through KCC at a subsidized interest rate of 7 per cent, with 1.5 per cent interest subvention provided to eligible lending institutions.

Additionally, farmers repaying loans promptly are eligible for an incentive of up to 3 per cent as Prompt Repayment Incentive (PRI), effectively reducing their interest rate on KCC loans to 4 per cent.

For loans taken exclusively for animal husbandry or fisheries, the interest benefit is applicable up to ₹2 lakh.

An official release said that no changes have been proposed in the structure or other components of the scheme.

There are more than 7.75 crore of KCC accounts in the country.

The continuation of the 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, the release said.

Institutional credit disbursement through KCC increased from ₹4.26 lakh crore in 2014 to ₹10.05 lakh crore by December 2024.