KCC Loans: Information and Broadcasting Minister Ashwini Vaishnav informed that the Cabinet has decided to continue MISS with the existing 1.5% interest subsidy for the financial year 2025-26. Continuation of this scheme will put a burden of ₹15,640 crore on the government treasury.

This shows how seriously the government is taking the welfare and financial stability of farmers, even if it requires a significant financial commitment. This is indeed a “right step of subsidy” which will provide a strong foundation for the agriculture sector.

What is MISS

MISS is a central government scheme aimed at ensuring that farmers have access to short-term loans at affordable interest rates through KCC. Under MISS, farmers get short-term loans up to ₹3 lakh through KCC at a concessional interest rate of 7%, with an interest subsidy of 1.5% to eligible lending institutions. This scheme enables farmers to continue their agricultural activities without any major financial burden.

‘Bumper’ incentives to farmers who repay loans on time

The advantage of taking loans through KCC is that farmers who repay loans on time are eligible for incentives of up to 3% in the form of a Prompt Repayment Incentive (PRI). This effectively reduces their interest rate on KCC loans to 4%.

The interest benefit alone on animal husbandry or fisheries loans can be up to ₹2 lakh. According to an official statement, no changes have been proposed in the structure or other parts of the scheme. This is a unique incentive that motivates farmers to maintain financial discipline.

More than 7.75 crore KCC accounts in India

There are more than 7.75 crore KCC accounts in India. Institutional loan distribution through KCC has increased from ₹4.26 lakh crore in 2014 to ₹10.05 lakh crore by December 2024. The overall agriculture loan flow has also increased from ₹7.3 lakh crore in 2013-14 to ₹25.49 lakh crore in 2023-24. These figures reflect the unprecedented growth of financial inclusion in the agriculture sector in India and significant improvement in access to credit for farmers.