Context: The Cabinet Committee on Economic Affairs (CCEA) approved continuation of the Modified Interest Subvention Scheme (MISS) for 2025-26. The government will allow 7.7 crore farmers to get short-term credit at a subsidised rate of interest through the Kisan Credit Card.
Relevance of the Topic: Prelims: Modified Interest Subvention Scheme; Kisan Credit Card.
Modified Interest Subvention Scheme
- MISS is a Central sector scheme, under which farmers get short-term loans of up to ₹3 lakh through Kisan Credit Card at a subsidised interest rate of 7%, as the government covers 1.5% interest subvention to eligible lending institutions.
- Additionally, farmers repaying loans in time are eligible for an additional 3% interest subsidy as prompt repayment incentive (PRI), effectively reducing their interest rate on KCC loans to 4%.
- It also includes post-harvest loans against Negotiable Warehouse Receipts (NWRs) for small farmers with KCCs.
- In the Budget 2025-26, the government announced to increase the loan limit under the MISS from Rs 3 lakh to Rs 5 lakh.
- Implementation and Monitoring by the Reserve Bank of India (RBI) and National Bank for Agriculture and Rural Development (NABARD).
The continuation of the support is critical in sustaining the flow of institutional credit to agriculture, which is vital for enhancing productivity and ensuring financial inclusion of small and marginal farmers.
Also Read: Kisan Credit Card bad loans rise by 42% in four years: RBI