Modified Interest Subvention Scheme (MISS) – FY 2025–26

  • 29 May 2025

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In News:

The Union Cabinet has approved the continuation of the Interest Subvention (IS) component under the Modified Interest Subvention Scheme (MISS) for the financial year 2025–26, retaining the existing structure and interest rates.

About the Scheme:

  • Type: Central Sector Scheme
  • Objective: To provide short-term agricultural credit to farmers at affordable interest rates through Kisan Credit Cards (KCC).

Key Features:

  • Loan Coverage:
    • Short-term crop loans up to ?3 lakh per farmer through KCC.
    • For loans exclusively for animal husbandry or fisheries, the benefit applies up to ?2 lakh.
  • Interest Rates:
    • Base interest rate: 7%
    • 1.5% interest subvention to lending institutions
    • 3% Prompt Repayment Incentive (PRI) for timely repayment
    • Effective interest rate for prompt payers: 4%
  • Implementing & Monitoring Agencies:
    • Reserve Bank of India (RBI)
    • National Bank for Agriculture and Rural Development (NABARD)
    • Operated via Public Sector Banks, Regional Rural Banks, Cooperative Banks, and Private Banks in rural/semi-urban areas.

Recent Updates and Rationale:

  • No structural changes have been introduced in the scheme for FY 2025–26.
  • The scheme continues amidst rising lending costs, with stable repo rates and MCLR trends.
  • It ensures credit access for small and marginal farmers, critical for financial inclusion and agricultural productivity.

Impact on Agricultural Credit:

  • KCC Accounts: Over 7.75 crore active accounts across India.
  • Institutional Credit Growth:
    • Disbursement via KCC increased from ?4.26 lakh crore (2014) to ?10.05 lakh crore (Dec 2024).
    • Total agricultural credit rose from ?7.3 lakh crore (FY 2013–14) to ?25.49 lakh crore (FY 2023–24).
  • Digital Reform: Kisan Rin Portal (KRP) launched in August 2023 has improved transparency and efficiency in claim processing.

Significance:

  • Helps ensure timely and affordable institutional credit to the farming sector.
  • Supports the government's goal of doubling farmers’ income.
  • Strengthens the rural credit delivery system and promotes inclusive growth in agriculture.