Budget 2025: Kisan Credit Card Loan Limit Raised To Rs 5 Lakh For Farmers

On Saturday, Finance Minister Nirmala Sitharaman 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 decision, revealed during the presentation of the Union Budget 2025-26, is expected to benefit 7.7 crore farmers across the country.

Sitharaman explained that this change would make it easier for farmers to access short-term credit at subsidised interest rates, which would support their agricultural activities. "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 that provides farmers with quick and easy access to institutional credit. Initially introduced to cater to short-term agricultural credit needs, the KCC scheme was expanded in 2019 to cover working capital needs for animal husbandry, dairying, and fisheries.

Under the current scheme, banks can offer collateral-free loans of up to Rs 1.60 lakh. The government also provides an interest subvention of 1.5 per cent to banks and a Prompt Repayment Incentive (PRI) of 3 per cent to farmers for loans up to Rs 2 lakh for animal husbandry, dairying, and fisheries under the Modified Interest Subvention Scheme (MISS).

The loan facility operates as a revolving cash credit line, allowing farmers to withdraw and repay funds as required. Additionally, it offers benefits like livestock insurance, personal insurance, asset insurance, and health insurance, where available.

According to the Economic Survey, by March 2024, India had 7.75 crore operational KCC accounts with an outstanding loan amount of Rs 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 also digitised the claim processing for MISS through the Kisan Rin Portal (KRP). By December 31, 2024, over Rs 1 lakh crore in claims had been processed, benefitting around 5.9 crore farmers.