NEW DELHI, 29 May 2025: In a major move to support India’s farming sector, the Union Cabinet, chaired by Prime Minister Narendra Modi, has approved the continuation of the Modified Interest Subvention Scheme (MISS) for the financial year 2025–26.
The scheme retains the existing 1.5% interest subvention on short-term agricultural loans, ensuring farmers have access to affordable institutional credit.
Under the scheme, farmers can avail short-term crop loans of up to INR 3 lakh through Kisan Credit Cards (KCC) at a subsidized rate of 7%, with eligible lending institutions compensated through the 1.5% interest subvention. Those who repay promptly can avail a 3% Prompt Repayment Incentive (PRI), effectively bringing their interest burden down to 4%.
The benefits also extend to farmers engaged exclusively in animal husbandry and fisheries, who are eligible for the subvention on loans up to INR 2 lakh. The structure and implementation framework of the scheme remain unchanged from previous years.
The Cabinet’s decision comes amid the government’s continued push for financial inclusion, credit accessibility, and productivity enhancement in the agricultural sector. The scheme plays a crucial role in maintaining the flow of institutional credit via cooperative and rural banks, especially in a fluctuating interest rate environment.
There are currently over 7.75 crore KCC accounts across India. Notably, institutional credit disbursement through KCC rose from INR 4.26 lakh crore in 2014 to INR 10.05 lakh crore by December 2024. Overall agricultural credit flow increased from INR 7.3 lakh crore in FY14 to INR 25.49 lakh crore in FY24, reflecting the expanding scope of credit access under structured policy frameworks.
Digital initiatives such as the Kisan Rin Portal (KRP), launched in August 2023, have further enhanced transparency and claim efficiency. The extension of MISS highlights the government’s commitment to doubling farmers’ income and accelerating rural economic development through affordable and timely credit mechanisms.