Cabinet gives nod to extend Modified Interest Subvention Scheme at 1.5% rate for FY26

The government on Wednesday approved continuation of Modified Interest Subvention Scheme (MISS) for 2025-26 under which farmers get short-term credit at affordable rate through Kisan Credit card (KCC). The decision regarding continuation of MISS for fiscal year 2025-26 with existing 1.5 per cent interest subvention was taken by the Union Cabinet, informed Information and Broadcasting Minister Ashwini Vaishnaw.

The continuation of the scheme will cost exchequer Rs 15,640 crore.

The Centre has retained the interest subvention rate at 1.5% on the basis of current lending cost trends, median MCLR and repo rate movements.


The Cabinet’s decision reinforces the Government’s unwavering commitment to doubling farmers’ income, strengthening the rural credit ecosystem, and boosting agricultural growth through timely and affordable credit access.

Under MISS, farmers receive short-term loans of up to Rs 3 lakh through Kisan Credit Cards (KCC) at a subsidized interest rate of 7%, with 1.5% interest subvention provided to eligible lending institutions. Additionally, farmers repaying loans promptly are eligible for an incentive of up to 3% as Prompt Repayment Incentive (PRI) effectively reducing their interest rate on KCC loans to 4%.


For loans taken exclusively for animal husbandry or fisheries, the interest benefit is applicable up to Rs 2 lakh, said government's press statement.

No changes have been proposed in the structure or other components of the scheme.

There are more than 7.75 crores of KCC accounts in the country. The continuation of this support is critical to sustaining the flow of institutional credit to agriculture, which is vital for enhancing productivity and ensuring financial inclusion for small and marginal farmers.