Modified Interest Subvention Scheme (MISS)
Kartavya Desk Staff
Source: PIB
Context: The Union Cabinet has approved the continuation of the Modified Interest Subvention Scheme (MISS) for FY 2025–26, maintaining a 1.5% interest subvention on short-term Agri loans to promote affordable credit access for farmers.
About Modified Interest Subvention Scheme (MISS):
• What is MISS? MISS is a central sector scheme that offers concessional short-term crop loans to farmers via the Kisan Credit Card (KCC) at reduced interest rates, incentivizing timely repayment.
• MISS is a central sector scheme that offers concessional short-term crop loans to farmers via the Kisan Credit Card (KCC) at reduced interest rates, incentivizing timely repayment.
• Launched In: Originally introduced in 2006–07 to improve credit availability and reduce rural indebtedness.
• Implementing Agencies: Jointly implemented by the Reserve Bank of India (RBI) and NABARD through Public Sector Banks, RRBs, Cooperative Banks, and Private Sector Banks.
• Nodal Ministry: Ministry of Agriculture and Farmers’ Welfare
• Objectives of MISS:
• Enhance credit flow to agriculture and allied sectors. Provide short-term working capital for farming, dairy, animal husbandry, and fisheries. Reduce borrowing costs for small and marginal farmers. Encourage prompt repayment through interest incentives. Offer financial relief during natural calamities.
• Enhance credit flow to agriculture and allied sectors.
• Provide short-term working capital for farming, dairy, animal husbandry, and fisheries.
• Reduce borrowing costs for small and marginal farmers.
• Encourage prompt repayment through interest incentives.
• Offer financial relief during natural calamities.
• Key Features of MISS (2025–26):
• Subsidised Interest Rate: Farmers get loans up to ₹3 lakh at 7% interest. An interest subvention of 1.5% is given to lending institutions. Prompt repayment incentive (PRI) of 3% lowers the effective rate to 4%. Sectoral Coverage: Applicable to crop loans, animal husbandry, and fisheries (up to ₹2 lakh). Loan Limit Enhancement: Under Budget 2025–26, limit proposed to be raised to ₹5 lakh for expanding agri-needs. Calamity Support: 2% subvention on restructured loans in the event of natural disasters. Massive Outreach: Covers over 7.75 crore KCC accounts nationwide, fostering rural credit inclusion. Digital Reforms: Kisan Rin Portal (KRP) launched in 2023 for fast and transparent claim processing.
• Subsidised Interest Rate: Farmers get loans up to ₹3 lakh at 7% interest. An interest subvention of 1.5% is given to lending institutions. Prompt repayment incentive (PRI) of 3% lowers the effective rate to 4%.
• Farmers get loans up to ₹3 lakh at 7% interest.
• An interest subvention of 1.5% is given to lending institutions.
• Prompt repayment incentive (PRI) of 3% lowers the effective rate to 4%.
• Sectoral Coverage: Applicable to crop loans, animal husbandry, and fisheries (up to ₹2 lakh).
• Loan Limit Enhancement: Under Budget 2025–26, limit proposed to be raised to ₹5 lakh for expanding agri-needs.
• Calamity Support: 2% subvention on restructured loans in the event of natural disasters.
• Massive Outreach: Covers over 7.75 crore KCC accounts nationwide, fostering rural credit inclusion.
• Digital Reforms: Kisan Rin Portal (KRP) launched in 2023 for fast and transparent claim processing.