Big news for the common people of India. In recent years, the Narendra Modi government has taken various steps to enhance the situation for farmers. One of the key initiatives is the Pradhan Mantri Kisan Samman Nidhi Yojana. Recently, they’ve also updated the Kisan Credit Card limits, allowing farmers to access credit cards with a limit of Rs 5 lakh at lower interest rates.
So, what’s the deal with the Kisan Credit Card? It’s a banking tool designed to assist farmers in purchasing essential agricultural items like seeds, fertilizers, and pesticides, as well as covering cash needs for crop production and related tasks. Farmers can use this credit card to make payments with interest. In 2019, the program was broadened to include funding for activities related to animal husbandry, dairy, and fisheries.
As for the impact, the Finance Ministry reports that the total amount under active Kisan Credit Card accounts surpassed Rs 10 lakh crore by December 31, 2024, benefiting around 7.72 crore farmers. Back in March 2014, the active KCC amount was just Rs 4.26 lakh crore.
Regarding loans and interest rates, under the Modified Interest Subsidy Scheme (MISS), banks receive a 1.5% interest subsidy for offering short-term agricultural loans up to Rs 3 lakh through the Kisan Credit Card at a reduced interest rate of 7% per year. Plus, there’s an extra 3% incentive for farmers who repay their loans on time, bringing their effective interest rate down to just 4%.
Loans of up to Rs 2 lakh are available without the need for collateral, making it easier for small and marginal farmers to access credit. In her Budget Speech for 2025-26, Finance Minister Nirmala Sitharaman announced an increase in the loan limit from Rs 3 lakh to Rs 5 lakh under the updated interest waiver scheme, providing even more support to farmers.