Kisan Credit Card– Modified Interest Subvention Scheme (KCC-MISS) Assessment

Why in News?
A third-party assessment of the Kisan Credit Card–Modified Interest Subvention Scheme (KCC–MISS) by the Institute for Social and Economic Change (ISEC), Bengaluru has highlighted the scheme’s positive impact on agricultural credit and farmer welfare across India’s agro-climatic regions.

About KCC–MISS

• KCC–MISS is a Central Sector Scheme of the Government of India.
• It aims to ensure the availability of affordable short-term institutional credit to farmers through the Kisan Credit Card (KCC).
• Under the scheme:
  • Farmers can avail short-term crop loans up to ₹3 lakh at a 7% annual interest rate.
  • The Government provides 1.5% Interest Subvention to eligible lending institutions.
  • Farmers who repay loans on time receive a Prompt Repayment Incentive (PRI) of up to 3%, reducing the effective interest rate to 4%.
• For loans taken exclusively for Animal Husbandry and Fisheries, the interest subvention benefit is available up to ₹2 lakh.

Key Findings of the ISEC Assessment

• Every ₹1 invested under the scheme generates approximately ₹2.30 of net value addition in the agriculture and allied sectors.
• Since its inception up to 2024–25, the scheme has provided an estimated ₹1.87 lakh crore as interest subsidy, significantly reducing the interest burden on farmers.

Recent Government Initiatives

• Annual fixation of Agriculture Credit Targets and Priority Sector Lending (PSL) targets for banks.
• Increase in the collateral-free loan limit under KCC from ₹1.6 lakh to ₹2 lakh, effective 1 January 2025.
• Introduction of digital initiatives to improve credit delivery, including:
  • Kisan Rin Portal
  • Jan Samarth Portal
  • e-KCC
  • KRISHIKA
• Simplification of KCC application procedures and expansion of coverage, particularly for small and marginal farmers.

Source: PIB

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