Modified Interest Subvention Scheme for Farmers
The Government of India has approved the continuation of the Modified Interest Subvention Scheme (MISS) for the fiscal year 2025-26. This scheme aims to provide affordable short-term credit to farmers through Kisan Credit Cards (KCC). The Union Cabinet’s decision comes in response to the need for sustained financial support for the agricultural sector. The scheme will cost the exchequer ₹15,640 crore.
Overview of the Modified Interest Subvention Scheme
MISS is a Central Sector Scheme designed to facilitate access to short-term loans for farmers. Under this scheme, farmers can secure loans up to ₹3 lakh at a subsidised interest rate of 7%. The government provides a 1.5% interest subvention to lending institutions. This effectively lowers the interest rate for farmers to 4% if they repay their loans promptly. For loans specifically for animal husbandry or fisheries, the interest benefit applies up to ₹2 lakh.
Impact on Agricultural Credit
The scheme has increased institutional credit disbursement through KCC. From ₹4.26 lakh crore in 2014, it surged to ₹10.05 lakh crore by December 2024. Overall agricultural credit flow rose from ₹7.3 lakh crore in 2013-14 to ₹25.49 lakh crore by 2023-24. This growth indicates a positive trend in financial inclusion for small and marginal farmers.
Government’s Commitment to Farmers
The Cabinet’s decision to continue MISS reflects the government’s commitment to doubling farmers’ income. It aims to strengthen the rural credit ecosystem and boost agricultural productivity. The scheme is crucial for ensuring farmers have access to low-cost credit, especially in the current economic climate with rising lending costs.
Minimum Support Price Adjustments
In addition to MISS, the government has also approved higher minimum support prices (MSP) for 14 kharif crops. The MSP for pigeon pea, or tur, increased by ₹450 to ₹8,000 per quintal. Other staples like paddy and moong also received MSP hikes. These decisions are politically , especially ahead of upcoming elections in agrarian states.
Challenges and Criticism
Despite the positive aspects of the MSP increases, some experts argue that these adjustments may not adequately address the rising input costs and inflation. The increase in MSP for paddy, for instance, is only 3%, which is lower than the current inflation rate. Critics suggest that these measures might be more symbolic than substantive without a robust procurement mechanism.
Infrastructure Development Initiatives
The government has also approved several infrastructure projects, including a four-lane rail corridor in Andhra Pradesh. This project aims to enhance connectivity and support economic growth in the region. The approval of these projects is part of a broader strategy to improve transport efficiency and reduce logistics costs across the country.
| Related | |
|---|---|
