What is Kisan Credit Card and how much loan limit raised by Sitharaman in Budget 2025-26?

Finance Minister Nirmala Sitharaman on Saturday announced an increase in the loan limit under the interest subvention scheme for Kisan Credit Cards (KCC) from Rs 3 lakh to Rs 5 lakh.

“The low limit under the modified interest subvention scheme will be enhanced from three lakh rupees to five lakh rupees for loans taken through the KCC,” she said.

The Kisan Credit Card is a savings-cum-loan product designed to provide farmers with easy access to institutional credit. Introduced to meet short-term agricultural credit needs, the KCC scheme was extended in 2019 to include working capital requirements for animal husbandry, dairying, and fisheries.

Under the current scheme, banks can provide collateral-free loans of up to ₹1.60 lakh under the scheme. The government offers an interest subvention of 1.5% to banks and a Prompt Repayment Incentive (PRI) of 3% to farmers on loans up to ₹2 lakh for animal husbandry, dairying, and fisheries activities under the Modified Interest Subvention Scheme (MISS).

The loan operates as a revolving cash credit facility, allowing farmers to withdraw and repay funds as per their needs. It also offers benefits such as livestock insurance, personal insurance, asset insurance, and health insurance wherever available.

According to the Economic Survey, as of March 2024, India had 7.75 crore operational KCC accounts with an outstanding loan amount of ₹9.81 lakh crore. Additionally, 1.24 lakh KCCs have been issued for fisheries and 44.40 lakh for animal husbandry activities.

The government has digitized claim processing under MISS through the Kisan Rin Portal (KRP). By December 31, 2024, over Rs 1 lakh crore in claims had been processed, benefiting approximately 5.9 crore farmers.