Union Cabinet, chaired by Prime Minister Narendra Modi on May 28, 2025, has approved the continuation of the Modified Interest Subvention Scheme (MISS) for the financial year 2025-26. Under this move, the existing interest subvention of 1.5% will remain in place, providing continued relief to farmers by making short-term credit affordable through Kisan Credit Cards (KCC).
MISS is a Central Sector Scheme designed to support farmers with short-term loans of up to Rs 3 lakh at a subsidized interest rate of 7%. With the 1.5% subvention provided to lending institutions, the scheme helps ease the credit burden on farmers.
Moreover, those who repay their loans on time can avail an additional 3% benefit under the Prompt Repayment Incentive, effectively bringing down the interest rate to just 4%. For farmers engaged in animal husbandry and fisheries, the benefit is available for loans up to Rs 2 lakh.
With more than 7.75 crore KCC accounts across the country, the scheme plays a vital role in sustaining the flow of affordable institutional credit to the agriculture sector. It is especially crucial for supporting small and marginal farmers and ensuring financial inclusion in rural India.
Importantly, no changes have been proposed to the structure or components of the scheme, maintaining its consistent support for the farming community.
The government highlighted significant growth in agricultural credit over the years. Institutional credit through KCC has increased from Rs 4.26 lakh crore in 2014 to Rs 10.05 lakh crore by December 2024.
Overall agricultural credit flow increased from Rs 7.3 lakh crore in 2013-14 to Rs 25.49 lakh crore in 2023-24. The introduction of digital tools like the Kisan Rin Portal (KRP) in 2023 has further improved transparency and streamlined the process of interest subvention claims.
Given the current lending trends and fluctuations in benchmark rates such as MCLR and the repo rate, maintaining the 1.5% interest subvention is crucial for supporting rural and cooperative banks. This measure ensures that farmers can access low-cost loans continuously.
