- The Centre is considering increasing the upper limit of short-term crop loans under the Modified Interest Subvention Scheme (MISS) from Rs 3 lakh to Rs 5 lakh.
- The current ceiling allows farmers to avail Kisan Credit Card loans at a concessional annual rate of 7%, which can be further reduced to 4% with prompt repayment.
- State governments, including Uttar Pradesh, have been advocating for this increase. Under the existing MISS, farmers engaged in agriculture and allied activities can acquire Kisan Credit Card loans up to Rs 3 lakh at a benchmark rate of 9%.
- The benefit of the interest subvention scheme extends to post-harvest loans for small and marginal farmers with Kisan Credit Cards, aimed at preventing distress sales of produce.
- The Rs 3-lakh upper limit has remained unchanged since 2006-07, when the original Interest Subvention Scheme was introduced by then Finance Minister P Chidambaram.
- In the financial year 2023-24, the Centre set the agriculture credit target at Rs 20 lakh crore, focusing on animal husbandry, dairy, and fisheries. Initially, Rs 23,000 crore was allocated for interest subvention under MISS, which was later revised to Rs 18,500 crore.
| Modified Interest Subvention Scheme (MISS) • The MISS allows farmers to acquire Kisan Credit Card loans up to Rs 3 lakh at a benchmark interest rate of 9%. The Centre offers a 2% interest subvention on this rate, reducing it to 7%. • For farmers who repay promptly, an additional 3% concession is provided, bringing the effective rate down to 4% per annum. • MISS covers activities like Animal Husbandry, Dairy, and Fisheries. KCC eligibility includes owner cultivators, tenant farmers, oral lessees, sharecroppers, and SHGs/JLGs. • Credit limits are calculated based on cropping patterns and purpose. Short-term limit includes scale of finance, cultivated area, and expenses. |
Dig Deeper: Learn about Kisan Credit Card and other such initiatives
