Kisan Credit Card Modified Interest Subsidy Scheme: Third-Party Evaluation Findings
UPSC / SSC current affairs note · Economy
Why in news
A third-party evaluation of the Kisan Credit Card – Modified Interest Subsidy Scheme reveals that every rupee invested yields ₹2.30 in net value addition to agriculture. The findings were shared in the Lok Sabha by Minister of State for Finance, Shri Pankaj Chaudhary, highlighting the scheme's positive impact on crop intensity and multi-season farming.
Background
The Kisan Credit Card (KCC) scheme was introduced in 1998 to provide timely and affordable credit to farmers. The Modified Interest Subsidy Scheme (MISS) provides interest subvention on short-term crop loans, reducing the effective interest rate for farmers. The government has been expanding KCC coverage and integrating digital initiatives to streamline agricultural credit.
Key facts
Third-party evaluation conducted by Institute for Social and Economic Change (ISEC), Bengaluru.
Every ₹1 invested under KCC-MISS contributes ₹2.30 to net value addition in agriculture and allied sectors.
Estimated subsidy amount from inception to 2024-25 is ₹1.87 lakh crore.
Scheme has positively impacted crop intensity and multi-season farming, with farmers cultivating larger areas and adopting diverse crop portfolios.
Beneficiaries receiving Prompt Repayment Incentive (PRI) show better credit discipline, enhancing banks' confidence in lending.
Scheme has boosted dairy production and animal husbandry, and supported income diversification by integrating livestock and fisheries with crop production.
It has helped meet working capital requirements for inland fisheries, crucial for diversification in the North-Eastern region.
Collateral-free loan limit under KCC increased from ₹1.6 lakh to ₹2 lakh, effective from 01.01.2025.
Government has launched digital initiatives: Kisan Rin Portal, Jan Samarth Portal, e-KCC, and Krishika.
Awareness programs and KCC saturation campaigns are conducted by central/state governments, RBI, NABARD, and State Level Bankers' Committees (SLBCs).
Prelims pointers
- Kisan Credit Card (KCC) scheme
- Modified Interest Subsidy Scheme (MISS)
- Institute for Social and Economic Change (ISEC)
- Prompt Repayment Incentive (PRI)
- Kisan Rin Portal
- Jan Samarth Portal
- e-KCC
- Krishika
- Priority Sector Lending (PSL)
- NABARD
Mains angles
- Evaluate the impact of KCC-MISS on agricultural productivity and farmer income.
- Discuss the role of technology in streamlining agricultural credit delivery in India.
- Analyze the effectiveness of interest subvention schemes in reducing farmer indebtedness.
- Examine the challenges in implementing agricultural credit schemes and suggest measures for improvement.