Kisan Credit Card: Finance Minister Nirmala Sitharaman revealed in the Union Budget 2025 that the loan limit for the Kisan Credit Card (KCC) has been raised from Rs 3 lakh to Rs 5 lakh. This initiative aims to address the financial requirements of farmers, enhance financial inclusion in agriculture, and foster rural development.
What is the Kisan Credit Card Scheme?
Launched in 1998, the Kisan Credit Card (KCC) scheme is designed to offer short-term loans to farmers at low-interest rates, enabling them to easily obtain funds for seeds, fertilizers, agricultural tools, and other necessities.
As of March-April 2024, there were 7.75 crore active accounts under this scheme, with a total loan amount of Rs 9.81 lakh crore approved. This highlights the significance of the scheme for farmers.
What changes were introduced in the KCC scheme in Budget 2025?
This year’s budget saw an increase in the KCC loan limit from Rs 3 lakh to Rs 5 lakh. This adjustment will provide enhanced financial support to farmers and encourage digital financial inclusion.
How does the Kisan Credit Card function?
The Kisan Credit Card is equipped with a Personal Identification Number (PIN) and an International Identification Number (IIN), operating as a magnetic stripe card. Farmers can now conveniently withdraw cash from ATMs using this card, ensuring that credit is readily available when needed. Under the updated interest subsidy program, farmers can access loans up to Rs 5 lakh.
Expansion of the KCC scheme in Budget 2025
In this budget, the government announced the extension of the KCC scheme to 7.7 crore farmers. This expansion will particularly benefit small and marginal farmers, as well as those involved in animal husbandry and fish farming.
New advantages related to the Kisan Credit Card Scheme
According to Budget 2025, the government plans to include an additional 1 crore farmers in this scheme, which will also assist those who have previously been excluded from loans and financial support.
Subsidy offered on Kisan Credit Card
The KCC scheme provides a subsidized interest rate of 7% on loans up to Rs 3 lakh. If farmers repay their loans promptly, they can benefit from a 3% interest subsidy, bringing the effective interest rate down to just 4%.
