The Union Cabinet gave its approval for the continued implementation of the Modified Interest Subvention Scheme (MISS) for 2025–26 so that farmers across India can continue to access cheap term loans through the Kisan Credit Card (KCC) system.

The Government's steadfast commitment to tripling farmers' income, bolstering the rural credit ecosystem, and accelerating agricultural expansion through prompt and reasonably priced credit availability is reaffirmed by the Cabinet's decision.

Through Kisan Credit Cards (KCC), farmers can obtain short-term loans up to Rs 3 lakh under MISS at a 7% subsidized interest rate, with qualified lending institutions receiving a 1.5% interest subvention. Furthermore, farmers who make timely loan repayments can receive a Prompt Repayment Incentive (PRI) of up to 3%, which effectively lowers their interest rate on KCC loans to 4%.

Critical aspects: 

Interest Subsidy Maintained: Eligible lenders will continue to receive an interest subvention of 1.5%, allowing them to offer short-term agricultural loans of up to ₹3 lakh to farmers at a subsidized interest rate of 7%. 

On-time Repayment Incentive: Farmers repaying their loan on time will be granted an extra 3% incentive, making the effective interest rate just 4%. 

Support for Allied Activities: The interest benefit is applicable for loans taken exclusively for animal husbandry or fisheries up to ₹2 lakh. 

No Structural Changes: There has been no change in the structure of this scheme, which ensures continuity and stability for farmers and lending agencies.Impact on Farmers: 

With more than 7.75 crore KCC accounts in the country, the continuance of the MISS is important to keep the flow of institutional credit to agriculture. This is expected to increase productivity and provide financial inclusion to small and marginal farmers. 

Government's Commitment:

This decision of the Cabinet strongly underscores the government's commitment to supporting the agricultural sector through the timely and affordable credit mechanism. It will thereby support the larger goal of doubling farmers' income and strengthening the rural credit ecosystem.